AviaGames’ legal troubles grew as players filed a class-action lawsuit against the company for allegedly using bots in what are supposed to be human-to-human skill-based games.
The class-action lawsuit represents players of games made by AviaGames, and it stems from copyright/patent litigation by Skillz against AviaGames. Skillz accused AviaGames of copying its skill-based games, where human players wager money against each other. This is not considered gambling because it does not involve games of change; rather, it’s human skill that wins the day.
During the course of that litigation, Skillz said it uncovered evidence that Mountain View, California-based AviaGames, which raised $40 million in venture capital, deceived players by pitting humans against unbeatable bots instead of against real humans. Skillz said this constituted illegal gambling, and now the class-action suit alleges both fraud and racketeering. A federal grand jury is also investigating AviaGames.
“The entire premise of Avia’s platform is false: instead of competing against real people, Avia’s computers populate and/or control the games with computer ‘bots’ that can impact or control the outcome of the games,” the class-action lawsuit said. “Instead of being games of skill as advertised, Avia’s games are manipulated games of chance that amount to an unapproved gambling enterprise. This action seeks to hold defendants responsible for their deceptive practices and, separately, their racketeering gambling enterprise.”
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AviaGames did not respond to a request for comment. The class-action lawsuit was filed in Texas by plaintiffs Andrew Pandolfi (from Texas) and Mandi Shawcroft (from Idaho). It accuses AviaGames of racketeering and fraud. The lawsuit also names AviaGames cofounders Vickie Chen, Ping Wang and investors including Galaxy Digital Capital Management and Acme Capital.
The class-action lawsuit said “Avia sells itself as a company that creates tournaments of real users who risk their own money in games of skill” through the company’s Pocket7Games mobile apps or through a mobile browser. Those games include traditional card games like solitaire or blackjack, bingo games, pool games, Tetris/block puzzle games, or bubble popping games. It says the competitions are fair.
But the lawsuit said recently uncovered evidence indicates that “Avia has perpetuated a lie on its customers and that players are actually playing against computer bots in a stacked game of chance.
Litigation involving a competitor has revealed evidence regarding AviaGames’ alleged use of bots to purportedly cheat the public. Namely, a slew of documents shows that AviaGames is matching gamers with robots to rig the games.”
Citing evidence found by Skillz, the class-action lawsuit said that internal Avia internal documents show “every cash game offered by AviaGames in the U.S. has a guide with a robot that guarantees the winning rate in favor of AviaGames against its customers.”
In another development in Skillz’s civil lawsuit against AviaGames, U.S. District Court judge Beth Labson Freeman granted an important request. Skillz wanted to get access to communications between Avia and its attorneys. Normally, such communications are not available because of the attorney-client privilege.
But there’s an exception called the “crime-fraud” exception, if the communications involved doing something to further a crime or a fraud. The judge ruled that the exception applied and Skillz can get the documents.
“It is very significant that two federal judges reviewed the evidence and found Avia committed fraud against financial institutions and customers,” said Lazar Raynal, an outside attorney at King & Spalding for Skillz.
In a recent hearing, Chen, AviaGames CEO and founder, asserted the Fifth Amendment (which allows witnesses to opt out against self-incrimination) a few times during her recent deposition.
The court date for Skillz vs. AviaGames trial is now set for February 2, 2024.
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