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`Simon Franzini (Cal. Bar No. 287631)
`simon@dovel.com
`Gregory S. Dovel (Cal. Bar No. 135387)
`greg@dovel.com
`DOVEL & LUNER, LLP
`201 Santa Monica Blvd., Suite 600
`Santa Monica, California 90401
`Telephone: (310) 656-7066
`Facsimile: (310) 656-7069
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`Attorneys for Plaintiff Michael Owens and the putative Class
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN FRANCISCO DIVISION
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`Case No. 3:21-cv-1427
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`CLASS ACTION COMPLAINT
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`DEMAND FOR JURY TRIAL
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`MICHAEL OWENS, individually and on
`behalf of all others similarly situated,
` Plaintiff,
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`v.
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`ZYNGA INC., a Delaware Corporation,
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` Defendant.
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 2 of 67
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`Table of Contents
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`B.
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`C.
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`D.
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`Introduction ..................................................................................................................................... 1
`Parties ............................................................................................................................................. 2
`Jurisdiction and Venue .................................................................................................................... 2
`Common Allegations ...................................................................................................................... 2
`A.
`Zynga unlawfully develops, owns, and operates the Zynga Social Slots
`Games in violation of California Penal Code Section 330b. .................................. 3
`Zynga makes hundreds of millions of dollars by developing, owning, and
`operating the Zynga Social Slots Games. ............................................................. 11
`Zynga’s developing, owning, operating, marketing, and profiting from the
`Zynga Social Slots Games constitute unlawful, unfair and fraudulent
`business acts and practices that violate California’s Unfair Competition
`Law. ...................................................................................................................... 19
`1.
`Zynga intentionally and unfairly gets users hooked the Zynga
`Social Slots Games by marketing them as “free to play” and by
`giving initial allotments of “free” coins. ................................................... 19
`Zynga intentionally and unfairly profits by offering slot machine
`games, which are the most addictive form of casino gambling. ............... 20
`Zynga intentionally and unfairly uses the virtual platform of its
`social slots games to maximize the time its users spend playing the
`Zynga Social Slots Games. ....................................................................... 29
`Zynga intentionally and unfairly targets individuals with addictive
`tendencies. ................................................................................................. 36
`Zynga intentionally and unfairly uses microtransactions and virtual
`coins to mask the fact that the user is paying money to play. ................... 43
`Zynga fraudulently markets the Zynga Social Slots Games as legal
`video games and does not disclose that they are in fact illegal slot
`machines. .................................................................................................. 46
`Zynga’s business acts in developing, owning, operating, marketing, and
`profiting from the Zynga Social Slots Games violate California’s Unfair
`Competition Law regardless of where the users are located. ................................ 52
`Plaintiff’s Allegations ................................................................................................................... 53
`Class Action Allegations............................................................................................................... 55
`A.
`The proposed class. ............................................................................................... 55
`B.
`The proposed class satisfies the numerosity requirement. .................................... 55
`C.
`The proposed class satisfies the commonality requirement. ................................. 56
`D.
`Plaintiff’s claims are typical of those of the proposed class. ................................ 56
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`2.
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`3.
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`4.
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`5.
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`6.
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`Class Action Complaint
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`E.
`F.
`G.
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`Plaintiff is an adequate class representative. ......................................................... 57
`Final injunctive relief is appropriate respecting the class as a whole. .................. 57
`Common questions of law and fact predominate, and a class action is a
`superior method for the adjudication of this litigation. ......................................... 57
`The proposed class is ascertainable. ..................................................................... 58
`H.
`Claims ........................................................................................................................................... 58
`Prayer for Relief ............................................................................................................................ 63
`Jury Demand ................................................................................................................................. 63
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`Class Action Complaint
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`Introduction
`Defendant Zynga Inc. is a California-based company that develops video games
`1.
`that can be played online or on apps downloaded on mobile platforms. In the early 2010s, Zynga
`was under a great deal of financial stress. As of October 2012, Zynga had lost more than three-
`quarters of its market value in that year alone. 1 As one analyst put it, “while Zynga [had] added
`more and more overall users, it [was] struggling to make money off of them.” 2
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`2.
`In a move to turn the company’s financials around, Zynga’s leadership decided
`that the company should move in the direction of online gambling. For example, in October of
`2012, Zynga announced a partnership with a British company that would allow Zynga to operate
`real-money online gambling through online poker, slots, and roulette games in the UK. 3
`Zynga’s then-CFO Dave Whener stated on behalf of the company: “We view this as a first step
`into real money gaming. … We believe it's a good first step, but only a first step towards what
`we think is a big opportunity for Zynga.” 4
`
`3.
`After Zynga recognized the profitability of modeling its online games after the
`gambling industry, Zynga began developing and offering “social slots” games. Zynga
`intentionally modeled its “social slots” games precisely after Vegas-style slot machines. Users
`make “bets” on “spins” using in-game currency. Users are given an initial allotment of free in-
`game currency. But when users exhaust their supplies of free in-game currency, they must
`purchase more to keep playing—and must do so with real money.
`4.
`Zynga’s “social slots” games are unlawful slot machines under California law.
`Moreover, these games utilize the same psychological tricks that casinos and physical slot
`machines use to cause users to become addicted. This keeps users playing—and spending. And
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`1 Laurie Segall, Zynga Surges on Higher Sales, Casino Gaming Plans, CNN Business
`(Oct. 25, 2012), https://money.cnn.com/2012/10/24/technology/zynga-earnings/.
`2 Cyrus Farivar, Zynga’s Financial Troubles Worsen, Company Falling Faster than
`Before, Ars Technica (Oct. 4, 2012), https://arstechnica.com/information-
`technology/2012/10/zyngas-financial-troubles-worsen-company-falling-faster-than-before/.
`3 Segall, supra.
`4 Id.
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`Class Action Complaint
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`the virtual platform only increases the opportunities to capitalize on the addictive tendencies of
`users.
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`Zynga has unlawfully, unfairly, and fraudulently made hundreds of millions of
`5.
`dollars from its “social slots” games. Plaintiff brings this case on behalf of himself and other
`users, seeking to end Zynga’s unlawful, unfair, and fraudulent practices in relation to its “social
`slots” games.
`
`Parties
`Plaintiff Michael Owens is a citizen of Florida (domiciled in Lantana, Florida).
`6.
`Plaintiff has lost over $8,000 playing Defendant’s “social slots” games.
`7.
`Defendant Zynga Inc. is a Delaware Corporation with its principal place of
`business in California. Zynga’s headquarters are located at 699 Eighth Street, San Francisco, CA
`94103. Zynga develops, owns, markets, and operates games that are played on mobile platforms,
`such as Apple’s iOS and Google’s Android, and social networking platforms, such as Facebook
`and Snapchat.
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`Jurisdiction and Venue
`The Court has subject matter jurisdiction under 28 U.S.C. § 1332(d)(2). The
`8.
`matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs,
`and is a class action in which one or more members of the proposed class are citizens of a state
`different from any one of the Defendants.
`9.
`Venue is proper under 28 U.S.C. § 1391(b)(1) & (2), because Defendant resides
`in this district. In addition, a substantial part of the Defendant’s conduct giving rise to the claims
`occurred in this district.
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`Common Allegations
`Zynga develops and operates “social slots” games. “Social slots” games are
`10.
`virtual slot machines that allow users to make bets using virtual “coins.” Zynga’s current social
`slots games include:
`• Hit it Rich!
`• Black Diamond Casino
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`Class Action Complaint
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`• Wizard of Oz Slots
`• Willy Wonka Slots
`• Game of Thrones Slots Casino
`11.
`Zynga previously offered additional social slots games, which it has since
`discontinued. These include:
`• Spin it Rich! Free Casino Slots
`• Princess Bride Slots
`• Slots – Riches of Olympus
`This Complaint refers to Zynga’s “social slots” games—including each of the
`12.
`games identified above, as well as any additional social slots games that Zynga develops or
`operates, now or in the future, as the “Zynga Social Slots Games.”
`13.
`Consumers can download and/or play Zynga’s social slots games on various
`mobile and online platforms including the Google Play Store and the Apple App Store,
`Facebook, and the Amazon Appstore.
`14.
`As shown below, the Zynga Social Slots Games are illegal slot machines that
`violate California Penal Code Section 330b. And by developing, owning, operating, marketing,
`and profiting from the Zynga Social Slots Games, Zynga violates California’s Unfair
`Competition Law, which prohibits “any unlawful, unfair or fraudulent business act.” Cal. Bus.
`& Prof. Code § 17200.
`15.
`Plaintiff brings this case on behalf of himself and a class of similarly situated
`consumers, to recover money lost as a result of Zynga’s unlawful, unfair, and fraudulent acts in
`connection with the Zynga Social Slots Games, and to enjoin Zynga from continuing to develop,
`own, operate, market, and profit from the Zynga Social Slots Games.
`A.
`Zynga unlawfully develops, owns, and operates the Zynga Social Slots Games in
`violation of California Penal Code Section 330b.
`16.
`In California, it is a criminal offense to make, own, sell, or operate a “slot
`machine.” Cal. Pen. Code § 330b(a). A “slot machine” is “a machine, apparatus, or device that
`is adapted … for use in a way that, as a result of the insertion of any piece of money or coin or
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`other object, or by any other means, the machine or device is caused to operate or may be
`operated, and by reason of any element of hazard or chance or of other outcome of operation
`unpredictable by him or her, the user may receive or become entitled to receive any piece of
`money, credit, allowance, or thing of value, or additional chance or right to use the slot machine
`or device….” Cal. Pen. Code § 330b(d).
`17.
`The Zynga Social Slots Games, and the virtual slot machines that they contain,
`are illegal slot machines.
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`Indeed, each of the Zynga Social Slots Games consists of a series of virtual slot
`18.
`machines. For example, here is the home screen for Zynga’s Hit it Rich! social slots game on
`iOS, showing some of the slot machines the user can play:
`19.
`Here is the home screen for Zynga’s Black Diamond Casino on iOS, showing
`some of the slot machines the user can play:
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`Here is the home screen for Zynga’s Wizard of Oz Slots on iOS, showing some of
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`the slot machines the user can play:
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`Each of the virtual slot machines that the user can play within the Zynga Social
`21.
`Slots Games is a “Vegas style” slot machine that is “based upon traditional casino … slots.” 5
`These virtual slot machines look, sound, and operate just like traditional, physical slot machines
`(like the ones in Las Vegas casinos). According to Zynga, its virtual slot machines include
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`5 Zynga 2019 10K, 1, 5.
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`“Vegas style slot machine game design, graphics and sounds.” 6
`22.
`Each slot machine within each of the Zynga Social Slots Games includes a series
`of “reels” with images or pictures printed on them. For example, here is a screenshot of the
`“Slingo Gold Bonus” slot machine in Zynga’s Hit it Rich! social slots game:
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`To operate a slot machine within each of the Zynga Social Slots Games, the user
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`must place a “bet” using virtual “coins” or slot machine “credits.” 7 To do so, the user must first
`select the quantity of coins he or she wants to bet (in the example above, using the pink arrows
`on the bottom left-hand corner of the screen) and then “spin” the slot machine (in the example
`above, using the green “SPIN” button in the bottom right-hand corner of the screen). Each slot
`machine has a minimum “bet” and cannot be played without placing at least that minimum bet.
`For example, the minimum bet for the Slingo Gold Bonus slot machine above is 60,000 coins.
`24. When the user presses the “SPIN” button, the amount the user decided to bet is
`subtracted from the user’s supply of coins. The slot machine makes noises resembling those of a
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`6 Hit it Rich! Lucky Vegas Casino Slot Machine Game, Google Play,
`https://play.google.com/store/apps/details?id=com.zynga.hititrich&hl=en_US&gl=US; see, e.g.,
`Willy Wonka Slots Free Casino, Google Play,
`https://play.google.com/store/apps/details?id=com.zynga.wonka&hl=en_US&gl=US (promising
`“authentic, casino-style slot machine games” with “Las Vegas style slot machines!”).
`7 The various games use “coins” or “credits” to refer to the tokens that the user uses to
`play the slot machines. This complaint refers to them as “coins” for consistency.
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`physical slot machine. The virtual slot machine’s reels “spin,” meaning that the images in each
`column rotate. The user can stop the spinning manually by pressing a “STOP” button or by
`pressing the “SPIN” button a second time. Alternatively, if the user does not manually stop the
`spin, the reels stop spinning after a predetermined amount of time.
`25. What happens next depends on the outcome of the spin, i.e., what images appear
`in the visible rows of the slot machine’s screen when the reels stop spinning. If, when the reels
`stop spinning, the images in the visible rows correspond to a winning combination, the user wins
`coins. Otherwise, the user receives nothing and loses his or her bet.
`26.
`The outcome of each spin is entirely dependent on chance and unpredictable to
`the user. A player’s experience or skill has no impact whatsoever on the probability of success
`or failure. For example, here is Zynga’s description of how the outcomes of each “spin” are
`determined in the Black Diamond Casino support page:
`
`All of our slot machines are programmed with a random number generator (RNG)
`that is activated with every spin. It is a hyper-fast computer program that spits out
`well over one hundred random numbers each second in a non-repetitive manner.
`The instant you press the spin button the system locks into a series of RNG
`numbers, using a mathematical equation, and with the lightning fast speed, tells
`the reels where to stop.
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`Each push of the spin button provides each player with an equal chance at hitting
`a jackpot or other winning configuration; however user experience may differ
`between players. All spins have the same probability of success or failure,
`regardless of the player, level, experience, balance, or time spent playing. 8
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`Each of the Zynga Social Slots Games determines the outcome of each spin in this
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`manner or a substantially similar way. Accordingly, the outcome of each spin within the Zynga
`Social Slots Games is determined by reason of chance, and is unpredictable to the user.
`28. Whether or not a user wins coins depends on whether a winning combination
`appears on a “pay line” of the slot machine. A pay line is a line that goes from right to left
`
`8 What Are Payouts?, Black Diamond Casino Support Page,
`https://zyngasupport.helpshift.com/a/black-diamond-casino/?s=getting-started&f=what-are-
`payouts&l=en (last visited Feb. 22, 2021).
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`across the slot machine’s reels. Pay lines can be straight or zigzag lines. If a winning
`combination of images appears on a given pay line, the user wins coins from that pay line.
`29.
`The Zynga Social Slots Games generally have multiple pay lines. If winning
`combinations appear on multiple pay lines, the user wins the total number of coins from all
`winning pay lines. The number of coins the user wins from a given pay line is determined by a
`“pay table,” which shows what combination of images are wins and the amount of the win.
`30.
`Here is an example pay table from the “Slingo Gold Bonus” slot machine in the
`Hit it Rich! social slots game:
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`
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`In the pay table above, listed below each symbol is the number of coins that the
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`user will win if that symbol appears three or more times consecutively on a pay line. For
`example, if three red 7s appear consecutively on a pay line, the user will win 60,000 coins from
`that pay line. If four red 7s appear consecutively on a pay line, the user will win 240,000 coins
`from that pay line. If five red 7s appear consecutively on a pay line, the user will win 360,000
`coins from that pay line.
`32.
`For example, in the screenshot below, three red sevens appear consecutively on
`Line 2, the pay line marked in red that goes straight across the fourth row of the slot machine.
`Therefore, the user wins 60,000 coins from Line 2.
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`The user can use any coins he or she wins from successful “bets” for additional
`33.
`gameplay, i.e., to continue spinning the slot machine or other slot machines within the Zynga
`Social Slots Game he or she is playing. Accordingly, a successful spin entitles the user to
`receive a “credit,” a “thing of value,” and an “additional chance or right to use the slot machine
`or device.” In each of the Zynga Social Slots Games, each slot machine provides the user with a
`chance to win sufficient “coins” to “spin” a slot machine within that game again. In other words,
`for each slot machine, the number of coins the user has a chance to win exceeds the minimum
`bet for that slot machine.
`34.
`Just like physical slot machines, the user cannot “spin” the slot machine if the
`user does not have sufficient “coins” in his or her account. Moreover, this is the only use of
`coins. Users cannot use coins to enhance gameplay (for example, to buy new characters, etc.).
`Coins can only be used to extend gameplay, i.e., to continue to use the game. Moreover, as
`explained below, users spend real money to purchase “coins.” (Some, like Plaintiff, spend
`thousands of dollars on coins; others spend tens or even hundreds of thousands of dollars on
`coins.) Accordingly, coins are a “thing of value.” Moreover, coins represent “an additional
`chance or right to use the slot machine or device.”
`35.
`Zynga maintains records of its users’ wins and losses, so that a user can exit the
`game and return at a later time to play with the same balance of coins the user had when he or
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`she exited the game.
`36.
`In addition to coins, Zynga’s virtual slot machines allow the user to win free spins
`or bonus games. These free spins and bonus games occur automatically after the user wins them.
`For example, based on the pay table above, if a “bonus” icon appears in the first, third, and fifth
`columns, the user wins a bonus minigame. Accordingly, a successful spin entitles the user to
`receive an “additional chance or right to use the slot machine or device” for this additional
`reason.
`The outcomes of the free spins and bonus games, like the outcomes of the slot
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`machines, are entirely dependent upon luck and unpredictable to the user. For example, here is
`Zynga’s description of the bonus game in the above slot machine:
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`And below is an example of a user receiving “free spins” in the “Munchkinland”
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`slot machine in Wizard of Oz Slots. When the user wins free spins in that slot machine, the
`machine spins ten times without the user having to place a bet. In the image below, the user has
`completed three out of ten free spins, as indicated in the bottom-right corner.
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` The client source code, executable code, and/or other computer code for each of
`39.
`the Zynga Social Slots Games and the virtual slot machines contained within them meets the
`definition of a “slot machine” under California Penal Code 330b. In addition and/or in the
`alternative, the client source code, executable code, and/or other computer code for each of
`Zynga’s Social Slots Games in combination with Zynga’s server-side source code, executable
`code, and/or other computer code meets the definition of a “slot machine” under California Penal
`Code 330b. In addition, each of the foregoing alternatives in combination with either of (a)
`servers and/or other server-side components, and/or (b) client devices and/or client-side
`components (such as mobile phones or computers) meet the definition of a “slot machine” under
`California Penal Code 330b.
`40.
`Zynga develops, owns, and operates the client-side and server-side source code,
`executable code, and/or other computer code for each of the Zynga Social Slots Games and the
`virtual slot machines contained therein. Zynga owns, operates, and/or controls the servers and/or
`server-side components involved in providing and operating the Zynga Social Slots Games.
`B.
`Zynga makes hundreds of millions of dollars by developing, owning, and operating
`the Zynga Social Slots Games.
`41.
`Zynga markets the Zynga Social Slots Games as “free to play.” What Zynga
`means by this is that the user does not have to pay to download or access the games, and that the
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 15 of 67
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`user can engage in some amount of gameplay (i.e., spins) for free as a result of being awarded a
`limited number of free coins.
`42.
`Zynga, however, is not a charity. Nor does it make most of its money through
`paid advertising like other technology companies. Instead, Zynga profits from the Zynga Social
`Slots Games by selling coins to users who run out of coins but want to continue betting. 9 Zynga
`has made hundreds of millions of dollars doing this.
`43.
`To entice users to play the Zynga Social Slots Games, Zynga makes them free to
`download and advertises them as free to play. Zynga also grants new users an initial allotment of
`free coins in each game. Zynga offers this initial allotment to get the user spinning and hooked
`on Zynga’s addictive social slots games.
`44.
`Once the user uses his or her initial allotment of free coins, he or she is unable to
`play the slot machines within the Zynga Social Slots Games anymore. When the user does not
`have enough coins to play a slot machine, Zynga prompts the user to purchase more coins to
`continue playing. Zynga presents the user with pop-up screens that contain either options to
`purchase more coins on the screen itself or a button that takes the user to the in-game store.
`45.
`For example, when a user lacks sufficient coins to place a bet in Hit it Rich! on
`iOS, the following screen pops up:
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`9 Zynga 2019 10K 3 (“Our primary revenue source is through the sale of in-game virtual
`currency that players use to buy virtual goods or through the sale of virtual goods directly
`(together, defined as ‘virtual items’).”).
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`Similarly, when a user lacks sufficient coins to place a bet in Black Diamond
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`Casino on iOS, the following screen pops up:
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`Pressing “GET COINS!” on the Black Diamond Casino pop-up screen takes the
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`user to the in-game store:
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 17 of 67
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`Zynga also makes the store easily accessible in each of the Zynga Social Slots
`48.
`Games from the home screen and while playing the slot machines. Bright green or gold buttons
`that say “BUY” or “BUY COINS” take the user directly to the in-game store.
`49.
`For example, here is a screenshot of the in-game store in Wizard of Oz Slots on
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`iOS:
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`Additionally, Zynga frequently presents users with “deals,” “sales,” or “special
`50.
`offers” through pop-up notifications. For example, here are screenshots of some of the pop-up
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 18 of 67
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`screens that Zynga presents users with:
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 20 of 67
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`Zynga sells coins through the platform that the game is played on. Users playing
`51.
`on games downloaded from the Apple App Store make payments through the Apple App Store.
`Users playing on games downloaded from the Google Play Store make payments through
`Google Play. Users playing on games downloaded from the Amazon Appstore make payments
`through Amazon. Users playing on Facebook make payments through Facebook Pay.
`52.
`For example, here is a screenshot of a payment screen on Wizard of Oz Slots,
`downloaded from the Google Play Store and being played on an Android phone:
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 21 of 67
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`And here is an example of a payment screen for the same purchase on Wizard of
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`Oz Slots, downloaded from the Apple App Store and being played on an Apple iPhone:
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`And here is an example of a payment screen for the same purchase on Wizard of
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`Oz Slots being played on Facebook:
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`Case 3:21-cv-01427-LB Document 1 Filed 02/26/21 Page 22 of 67
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`These transactions are called “microtransactions” or “micropayments” in the
`55.
`video game industry because each individual purchase is for a relatively small amount of money.
`But in the aggregate, these microtransactions amount to enormous profits for Zynga—and
`disastrous losses for users addicted to the Zynga Social Slots Games.
`56.
`Zynga makes hundreds of millions of dollars per year selling such coins to the
`users of the Zynga Social Slots Games. Moreover, the vast majority of this revenue comes from
`a small percentage of users who become addicted to playing—just like gambling addicts become
`addicted to physical slot machines in Las Vegas and other places where gambling businesses are
`allowed. Unlike physical slot machines, which are regulated by gambling commissions designed
`to protect those suffering from gambling addiction, Zynga’s social slot machines are entirely
`unregulated. Worse, as shown below, Zynga intentionally engages in unfair business practices
`and acts designed to prey on those with addictive tendencies to increase its profits.
`C.
`Zynga’s developing, owning, operating, marketing, and profiting from the Zynga
`Social Slots Games constitute unlawful, unfair and fraudulent business acts and
`practices that violate California’s Unfair Competition Law.
`57.
`As described above, Zynga’s acts of developing, owning, and operating “slot
`machines” are illegal (in fact, they are criminal violations). Moreover, those acts are business
`acts: Zynga develops, owns, and operates the Zynga Social Slots Games as part of its game
`development business