Burns Charest: Mobile gaming company facing fraud claims in consumer class action alleging online ‘games of skill’ are rigged

The U.S. Supreme Court has declined to consider a petition brought by AviaGames Inc. to review the denial of the company’s motion to compel arbitration in a federal class action, which was affirmed by the Ninth Circuit.

That litigation alleges that the mobile gaming developer fraudulently represents that its games are “games of skill” against other human opponents, when in reality corporate documents show that players are actually competing against computer bots, leading to fewer cash prizes for human participants and the bulk of entry fees being funneled to Avia. The denial by the Court remands the case to federal court in the Northern District of California for further proceedings.

The plaintiffs in the putative class, which presumably contains millions of individual consumers, assert that players on Avia’s popular Pocket7Games platform and stand-alone apps such as Solitaire Clash have wagered more than $1 billion in recent years to compete in games of skill against what Avia claims are other human players.

“Avia has now lost its attempt to arbitrate these claims at every step of the judicial process, and we look forward to trying these claims before a jury,” says Matt Tripolitsiotis in the New York office of Burns Charest LLP. “The company and its investors have perpetuated a lie, manipulating the outcomes in their favor and duping players who have lost significant amounts of money due to their scam. There are many victims here with real losses.”

The AviaGames website touts that the platform features “a wide range of skill games, including Bingo Clash, Match 'n Flip, 21 Gold, Tile Blitz, 2048 Blitz, Pool Clash, Dunk Shot, Dominoes and Solitaire! Each game offers quick, competitive gameplay where your performance determines the outcome.”

The company does not publicly release annual, unique player counts, but publicly available estimates state the platform has reached more than 20 million lifetime downloads and draws an estimated 3.5 million active monthly users, hosting more than 100 million tournaments each month across its various titles. According to the information management and market analysis company Tracxn, Pocket7Games has raised $40 million in funding from investors such as Galaxy, Washington Harbour Partners and Makers Fund since the company’s founding in 2018.

The lawsuit alleges violations of the California Business & Professions Code, the California Consumer Legal Remedies Act and the federal Racketeer Influenced and Corrupt Organizations Act.

The case is Pandolfi et al. v. AviaGames, Inc. et al., No. 3:23-cv-05971-EMC, filed in U.S. District Court for the Northern District of California.

Burns Charest LLP is a thriving boutique litigation firm of experienced, respected attorneys with impressive records representing clients in important and high-profile cases across the country. This work includes serving as co-lead counsel in multidistrict litigation, antitrust and class action matters, oil and gas royalty disputes, environmental pollution cases, large-scale mass torts and complex commercial litigation. The firm has offices in Dallas, New Orleans, New York and Washington, D.C.

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Corporate documents show that players are actually competing against computer bots, leading to fewer cash prizes for human participants and the bulk of entry fees being funneled to Avia.