TikTok Gambling Lawsuit: Coins, Plaintiffs, and Key Rulings

The TikTok gambling lawsuits are a cluster of more than two dozen state, federal, and private cases arguing that the app’s design, and especially its TikTok Coins currency, borrow from casino psychology to hook young users and, in the District of Columbia’s telling, operate as an unlicensed money-transmission scheme. The suits have already survived key motions, produced damaging internal documents in discovery, and pushed TikTok into at least two settlements without any admission of liability.

What the Lawsuits Say About Gambling-Style Design

The core allegation across the cases is that TikTok’s features are engineered to trigger the same neurological responses that keep gamblers at a machine. Hawaii’s December 2025 complaint alleged the app uses features “engineered to influence users’ neurobiology, especially dopamine production, in ways similar to tactics used in the gambling industry.”¹ The broader personal injury litigation describes the recommendation algorithm as manipulating dopamine releases in young users, causing them to behave “like a gambler at a slot machine.”²

The specific features named in the complaints are the ones behavioral scientists tie to variable-ratio reinforcement: infinite scroll, pull-to-refresh, autoplay, push notifications, and unpredictable social rewards like likes. These deliver random, intermittent payoffs of the same kind that drive slot-machine play.

Internal TikTok material unsealed in the state cases suggests the company understood this. According to NPR’s reporting on the unredacted filings, TikTok’s own research concluded that a user becomes “likely to become addicted” after viewing 260 videos, a threshold an average user can reach in under 35 minutes. One project manager wrote internally, “Our goal is not to reduce the time spent.” Another document acknowledged that “minors do not have executive function to control their screen time.”³

The same filings show TikTok’s public safety measures were internally treated as cosmetic. Its 60-minute daily screen time prompt for teens reduced average use by only 1.5 minutes in internal testing, and an executive acknowledged that in-feed “break” videos were “useful in a good talking point” for policymakers but “not altogether effective.”³ TikTok has called the documents “outdated” and the complaints “cherry-picked.”⁴

TikTok Coins as an Unlicensed Casino

The most direct gambling-law theory comes from the District of Columbia. Attorney General Brian Schwalb’s October 2024 lawsuit alleged that TikTok Coins function “similar to poker chips at a casino,” and that the platform uses “currency confusion” to obscure the real dollar cost of in-app spending.⁵

Here is how the system works, as described in the complaint. Users buy TikTok Coins with real money. They spend those coins on digital “gifts” sent to creators during livestreams. Creators convert gifts into “diamonds,” which can then be cashed out for real currency. TikTok takes a commission of up to 50% along the way. The D.C. suit alleges this coins-to-gifts-to-diamonds-to-cash pipeline is unlicensed money transmission under D.C. law, and that TikTok has never registered with the D.C. Department of Insurance, Securities, and Banking or the U.S. Treasury Department.⁶

TikTok tried to knock the money transmission claims out through an interlocutory appeal. In August 2025, the D.C. Court of Appeals refused, allowing those claims to proceed.⁷

Utah’s June 2024 lawsuit pushed the same virtual-currency theory further, alleging the coin-and-livestream system allows criminals to engage in money laundering, illegal gambling, drug sales, and terrorism financing.⁸ Former FinCEN senior adviser Eric Kringel called the activity “pretty straightforward” money transmission because TikTok diamonds convert to cash.⁹

What TikTok’s Own Investigations Found

Utah’s litigation produced two particularly damaging exhibits: internal TikTok investigations known as Project Meramec and Project Jupiter, unsealed in January 2025 after a contempt finding against TikTok for initially refusing to comply with state subpoenas.¹⁰

Project Meramec, launched in early 2022, examined the LIVE feature. It found that in January 2022 alone, approximately 112,000 children aged 13 to 15 hosted livestream sessions despite TikTok’s stated 18-and-over rule for going live.¹¹ The investigation documented adults paying these underage users in virtual currency to “strip, pose, and dance provocatively.”¹⁰ It also confirmed that TikTok’s recommendation algorithm “prefers feeds with gifts,” which “incentivizes sexual content” by pushing higher-earning streams to the top.¹²

Project Jupiter, launched in 2021, looked at whether criminal networks were using LIVE for money laundering. By 2023, TikTok’s compliance teams reported identifying “major money laundering criminal patterns” on the platform.¹¹ Utah’s complaint alleges the coin system had been used to fund terrorist groups, including the Islamic State of Iraq and the Levant, and that internal communications acknowledged TikTok lacked the money transmitter licenses required under U.S. law for its user-to-user transactions and stored value system.¹²

Who Has Sued

On October 8, 2024, a bipartisan coalition of 14 attorneys general filed individual lawsuits against TikTok. New York’s Letitia James and California’s Rob Bonta co-led, joined by Illinois, Kentucky, Louisiana, Massachusetts, Mississippi, New Jersey, North Carolina, Oregon, South Carolina, Vermont, Washington, and the District of Columbia.¹³ Nine other states had already sued before the coalition formed: Utah, Nevada, Indiana, New Hampshire, Nebraska, Arkansas, Iowa, Kansas, and Texas.¹⁴ Hawaii followed on December 3, 2025.¹⁵ At least 24 state-level enforcement actions are now on file.

The state suits share overlapping claims: addictive design harming teen mental health, misleading public statements about safety tools, and collection of data from children under 13 without parental consent in violation of the Children’s Online Privacy Protection Act.¹³

Federal enforcement is running on a parallel track. In August 2024, the FTC announced a lawsuit against TikTok and ByteDance alleging the company “flagrantly” violated children’s privacy law.¹⁶ The complaint, filed by the Department of Justice on the FTC’s behalf, alleged that TikTok failed to comply with a 2019 court order, knowingly permitted children under 13 to create accounts and message adults, and maintained “backdoors” allowing account creation through Google or Instagram without age verification. The FTC seeks civil penalties of up to $51,744 per violation per day, plus a permanent injunction.

Where the Private Cases Stand

Thousands of individual and school district lawsuits against TikTok and other platforms have been consolidated on two tracks. The federal cases sit in MDL 3047, In re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, before Judge Yvonne Gonzalez Rogers in the Northern District of California.¹⁷ The MDL held more than 2,500 pending cases as of early 2026. The state-level companion, JCCP 5255, is before Judge Carolyn Kuhl in Los Angeles Superior Court.

The first bellwether was K.G.M. v. Meta & YouTube, a state-court case set for January 27, 2026. The plaintiff, a 19-year-old California woman, alleged TikTok and other platforms addicted her at a young age, leading to depression and suicidal thoughts.¹⁸ TikTok settled that day on undisclosed terms and without admitting liability; Snapchat had settled five days earlier.¹⁹ The trial continued against Meta and YouTube, and on March 25, 2026, a jury found both liable for negligence and awarded $6 million.²⁰

In May 2026, TikTok joined a school district bellwether settlement. Kentucky’s Breathitt County School District reached a combined $27 million deal with Meta ($9 million), Snapchat ($8 million), TikTok ($8 million), and YouTube ($2.01 million), with no admission of liability and no platform design changes. The district, serving about 1,600 students, had originally sought over $60 million for a 15-year mental health program and mandatory platform changes. Much larger districts remain in litigation, including Tucson Unified, which is seeking over $1.1 billion.²¹

Key Rulings and What Comes Next

Courts have shut down the platforms’ main early defense. In the federal MDL, judges denied motions to dismiss that argued Section 230 of the Communications Decency Act shields platforms from design-based product liability claims.¹⁹ After the K.G.M. verdict, Judge Kuhl denied Meta and Google’s motion for a new trial, ruling that Section 230 does not cover design choices and that there was “substantial evidence that Plaintiff was harmed by the design features” regardless of user-generated content.²⁰ Both companies have said they will appeal.

Several tracks continue in parallel. The D.C. money transmission claims move forward after TikTok’s failed appeal. The state attorney general actions, now numbering at least 24, remain active. Additional state bellwether trials are expected in JCCP 5255, with a second personal injury trial (R.K.C.) no earlier than mid-2026 and a third (Moore) in the fall.²² Jury selection for the next federal bellwether is scheduled for February 2027.¹⁷

TikTok has broadly disputed the allegations, calling many “inaccurate and misleading”⁵ and describing the internal documents cited by state AGs as outdated and selectively quoted.⁴ None of its settlements so far have included an admission of liability or a commitment to change how the platform is built.

1
State of Hawaii Attorney General. Hawaii Sues TikTok for Harmful and Deceptive Practices
2
Nolo. Lawsuits for Social Media Addiction and Mental Harm
3
NPR. Redacted Documents in Teen Safety Lawsuit Revealed
4
Business Insider. TikTok Lawsuit Algorithm Children Internal Documents Revealed
5
CNBC. TikTok’s Casino-Like Virtual Currency Harms Children, DC AG Alleges
6
DC Office of the Attorney General. Attorney General Schwalb Sues TikTok for Preying on Children
7
MLex. TikTok Fails to Get US Money Transmission Violations Tossed in DC Suit
8
Utah Department of Commerce. Utah Sues TikTok for Raking in Millions From Virtual Strip Clubs Involving Minors
9
ACAMS. TikTok Lawsuit Highlights Potential Money Laundering Risks
10
Utah Department of Commerce. Release of Previously Redacted Information in TikTok Inc. Complaint Filing
11
Oregon Capital Chronicle. New Court Records Claim TikTok Knew Its Live Feature Was Used to Groom Children
12
Utah Department of Commerce. TikTok Live Unsealed Redaction Highlights
13
New York Attorney General. Attorney General James Sues TikTok for Harming Children’s Mental Health
14
California Attorney General. Attorney General Bonta and Attorney General James Lead Coalition Suing TikTok
15
Hawaii News Now. Hawaii Is Suing TikTok — Here’s Why
16
Federal Trade Commission. Kids Privacy and COPPA
17
U.S. District Court, Northern District of California. In Re Social Media Adolescent Addiction/Personal Injury Products Liability Litigation
18
Reuters. TikTok Settles Social Media Addiction Lawsuit Ahead of Trial
19
Spencer Law. Social Media Addiction Lawsuits 2026 – KGM Trial – MDL 3047
20
CNBC. Google and Meta Denied New Trial in Youth Social Media Addiction Case
21
Insurance Journal. Social Media Companies Settle School District Lawsuit for $27 Million
22
Robert King Law Firm. Social Media Addiction MDL 3047 CMC Agenda March 2026