Archives: January 2016

Get Yer Bets in on Iowa: Legal Political Prediction Gambling

Did you know that you can legally trade futures contracts on whether Trump tanks in Iowa or Sanders soars in New Hampshire? Two not-for-profit “stock” markets allow online trading – with real money – on a political prediction market. The Iowa Electronic Markets (IEM) and PredictIt are online not-for-profit “stock” markets run by the University of Iowa and Victoria University, Wellington in New Zealand for educational and research purposes. On these markets people can buy and trade futures contracts based upon predictions of electoral results with trading accounts of up to $500 on IEM and $850 on PredictIt.

How can this be? Both the IEM and PredictIt have received no-action letters from the U.S. Commodities Futures Trading Commission saying these markets were not regulated by the Commodity Exchange Act. (more…)

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Government to Citizens: Powerball Good/Daily Fantasy Sports Bad

What’s good for the goose isn’t always good for the gander.

44 states are selling legal lottery tickets to hopeful citizens with the 1 in 292.2 million chance of becoming a billionaire. (For those keeping score, you can’t play Powerball in AL, AS, HA, MS, NV and UT.)

At least 8 states have declared daily fantasy sports illegal gambling; all of these states, except Nevada, allow Powerball. (Again, for the score keepers, no DFS in AZ, IO, LA, MT, NV, WA, IL and NY*) *NY appellate court recently said o.k. for now.

What’s the difference? Your government said so. (more…)

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I Said Your Product was Great, Now Gimme a Prize: The FTC Enforces Its Endorsement Guidelines

Yesterday, the FTC settled a deceptive advertising lawsuit against the creators and marketers of the Lumosity “brain training” program. For those of you not smart enough to know, the “brain training” program claimed to not only boost your performance at work or school, but also slow down those pesky cognitive impairments we all seem to experience as we get older.

What was I saying? Oh, yeah. As part of its marketing campaign, Lumosity ran an “Athlete Testimonial Contest” inviting entrants to share their story of how “Lumosity has helped them take their athletic abilities to the next level for the chance to win a Lifetime Subscription, the new iPad, and more!” (NB: Apple frowns upon giving away iPads.)

With this call to action, burgeoning athletes took time away from their snatch and jerks to post their stories online to gain entry into the (sic) “contest”. (more…)

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“All Profits to Charity” – How Much is That? A Brief Commercial Co-venture Lesson

You’ve heard this sales pitch before. Its cousins are “A percentage of proceeds to charity” and “A portion of the proceeds to charity”. Do you really know how much will be donated? The short answer is no. I’ve read estimates that net profits on a pizza pie are typically 4% to 8%, on new cars around 1-2%, and in the clothing industry profit margins range from 4% to 13%.  The Wall Street Journal has reported that McDonald’s makes 6 cents on a one-dollar hamburger. So if a brand tells you it’s giving “all of its profits to charity,” you need to know where’s the beef. (more…)

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