Posts Tagged: Illegal Gambling

Where’s the Beef? Selling Internet Time Could Get You Time (The Sweepstakes Legitimate Product Requirement)

In 1984, Clara Peller, when opening a bun and finding only a tiny burger, first asked the famous line, “Where’s the beef?” This question is still relevant today in sweepstakes world. Even if you have an AMOE, when you provide entries for purchasing a product, it better be a hamburger and not just the aroma.

This week an attorney was reinstated to the Florida Bar after four years and having been convicted (which was later overturned and remanded) of various crimes for advising a client on the legality of running a “sweepstakes” involving internet cafés selling “internet time” to its customers who then received entries which simulated popular casino-style games to reveal whether the customer won a prize.  (more…)

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2016: The Year in Review

In case you missed it, here are some notable items from 2016 concerning sweepstakes, contests, and related promotional matters:

Influencers, Native Advertising, and Endorsements

2016 kicked off with reaction to the FTC’s new Native Advertising Rules which seek more transparency in sponsored stories/advertising.

In March, in its first enforcement action, the FTC cracked down on Lord & Taylor for paying “influencers” to attract social media attention to its Paisley Asymmetrical Dress.  The FTC issued a number of directives, including making the influencers aware of their participation, and making disclosure of the relationship unavoidable.

In May, the National Advertising Division (NAD), a self-regulatory industry, issued a decision concerning native advertising appearing in People.com under the “Stuff We Love” section.  The NAD determined that disclosure of the sponsorship must be made before you get to the stuff page.

In July, the FTC charged Warner Bros. with making inadequate disclosures in videos of influencers playing a new video game.  The FTC didn’t like that the sponsorship disclosure was in a collapsed box below the video and needed to be in a place where consumers will find it.

In October, in an effort to comply with the FTC Rule, YouTube introduced a new feature allowing visible text on a video for the first few seconds with the label stating “Includes paid promotion”

The take:  Consumers and the FTC don’t particularly like “influencers” or hidden ads, so be conspicuous. (more…)

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Playing for Keeps: Daily Fantasy Football 2016

When the last online fantasy football game was played, the attorneys general of New York, Nevada and Illinois were throwing penalty flags, state legislators was huddling to set the next play, and the daily fantasy sports leagues were taking it on the chin.

Where are we now? Here’s a 50 state survey:

DFS expressly allowed: CO, IN, KS, MD, MA, MS, MO, NY, RI, TN, WV, VA

Contested: AL, DE, GA, HI, ID, IL, NV, SD, TX

Banned: AZ, IO, LA, MT, WA

Proposed legislation: CA, CT, FL, KY, MI, MN, NE, NJ, NM, OK, PA, SC, WI

No legislation: AS, AK, ME, NH, NC, ND, OH, OR, UT, WY

How about this stat: leading up to the 2015 NFL season, daily fantasy sports leagues spent over $750 million in ads – more than the entire beer industry. In 2015, the top two companies had recorded a combined $3 billion in player entry fees. (more…)

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Competitive Video Gambling: The Secret Hobby Going on in Your Basement

Competitive video gaming is a somewhat recent attraction for (mostly) young adult boys and (mostly) men who think they are young adult boys. I’ve even seen my young adult son watch YouTube videos of other people playing video games. (Don’t shame me as a parent.) Competitive video gambling is what happens when people decide to bet on the outcome of others playing video games. Class actions are what happen when the unlucky gamblers decide to sue.

Recently, one of these gamblers brought a putative class action against the publisher and developer of the video game Counter Strike: Global Offensive (or in vid game talk, CS:GO) claiming that the game allowed for illegal gambling, the “contract” he entered into with the developer was invalid, and of course, he should get restitution for his losses.

In my real simple terms, gathered from the Complaint, CS:GO matches are streamed live on websites like Twitch; user accounts can be linked to third-party (international) websites; and players can purchase “skins” which can be used like casino chips to place bets on the games. (more…)

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What’s a Prize? Illinois Federal Court Holds In-App Purchases for a Chance to Win Enhanced Game Play Is Not Illegal Gambling

Recently, the US District Court for the Northern District of Illinois dismissed a putative class action lawsuit claiming that the online game Castle Clash involved illegal gambling because players could make in-app purchases to win “Heroes”, “gems”, “shards” and “Honor Badges” to enhance their gaming experience.

I think I got this right: In Castle Clash, players amass armies of “Heroes” to do battle against one another. During play, the players collect “shards” – a type of virtual currency – in the game’s “dungeon” and can use these shards to obtain new Heroes from the “Hero Shop”. Also, when a player downloads the game, she is provided with some “gems” to use to make in-app “purchases” within the game to enhance play. Players can amass more gems by buying them, with prices ranging from $1.99 to $99.99. A player can collect Heroes without using her shards by purchasing gems to enter a “Talent Roll” where Heroes are awarded randomly (with a lesser chance of winning better Heroes). There are also in-app events where players with a lot of gems are awarded rare Heroes. The Heroes cannot be redeemed for cash.

To put it simply, you can pay for a better chance to win thingies that make your game play that much more thrilling. (more…)

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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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