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Churchill Downs, Others Settle Gaming App Suit for $155 Million

Feb. 12, 2021, 6:53 PM

Churchill Downs and gaming companies Big Fish Games Inc., Aristocrat Technologies, and Aristocrat Leisure will pay $155 million into a fund to reimburse losses incurred by class members who allege the companies’ social casino apps constitute illegal gambling, under the terms of an agreement approved by the Western District of Washington.

The money will be paid into a common fund allowing class members who lost money to get a “substantial portion of their losses back,” under the terms of the agreement approved Thursday by the U.S. District Court for the Western District of Washington.

The settlement class is defined as “all persons in the United States who played Big Fish Casino, Jackpot Magic Slots, or Epic Diamond Slots” on or before preliminary approval of the settlement on Aug. 31, 2020.

More than 50,000 class members had submitted claims as of December 14, 2020, according to court records.

The court also ordered that class counsel will receive $38.7 million in fees.

The fee award, which is 25% of the common fund, is the benchmark fee award in common fund cases, and is fair and reasonable, the court said.

The plaintiffs alleged that social casino games are a way for gambling corporations to put slot machines onto consumers’ smart phones without complying with any federal or state gambling laws, and that their revenues are disproportionately derived from gambling addicts.

Judge Robert S. Lasnik issued the order.

Edelson PC and Tousley Brain Stephens represent the plaintiffs.

Orrick Herrington & Sutcliffe LLP represents Churchill Downs.

Covington & Burling LLP represents Big Fish Games, Aristocrat Technologies and Aristocrat Leisure.

The cases are Kater v. Churchill Downs Inc., W.D. Wash., No. 15-cv-00612, 2/11/21; Thimmegowda v. Big Fish Games Inc, W.D. Wash., No. 19-cv-00199, 2/11/21.

To contact the reporter on this story: Peter Hayes in Washington at PHayes@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com