Posts Tagged: Illegal Gambling

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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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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Another One Bites the Dust – Daily Fantasy Sports Update

On Wednesday, the Illinois Attorney General declared daily fantasy sports illegal under Illinois gambling law.  The AG Lisa Madigan gave her opinion in response to a request from two legislators who are pushing to legalize this activity.  Interestingly, the AG believed the issue of whether it is a game of chance or a game of skill is irrelevant because any game played for money under Illinois law is illegal gambling.

The AG sent a letter to counsel for FanDuel and DraftKings expecting them to amend their Terms of Service to include Illinois as a prohibited state.

For now, Illinois joins New York, Arizona, Iowa, Louisiana, Montana, Nevada and Washington as states prohibiting daily fantasy sports. More to follow?

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Maybe it is Gambling – Fantasy Sports Leagues Under Fire

This week we wrote that fantasy sports leagues were (arguably) legal because they are games of skill under the Unlawful Internet Gambling Enforcement Act (UIGEA). Yesterday, however, the Nevada Gaming Control Board concluded – after several months of investigation – the pay-to-play daily fantasy sports leagues (DFS) were gambling under the Nevada Revised Statues and therefore, the operators must possess a gaming license from the Nevada Gaming Commission. The full Notice to Licensees of the Legality of Offering Daily Fantasy Sports in Nevada is set forth here. In response, the two largest daily fantasy sports operators, DraftKings and FanDuel, issued statements that they are, at least temporarily, suspending operation in Nevada. (more…)

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Isn’t Fantasy Football Illegal Gambling?

Everyone is familiar with the phrase “No Purchase Necessary.” That’s because promotions based on chance – sweepstakes, giveaways, or any promotion where a winner is randomly selected – cannot require a purchase (i.e., consideration) for the chance to win a prize. This is important for many businesses who use promotions to attract new customers.

So, why does it seem that fantasy football is different?

You can’t miss the ads on ESPN, CBS, Fox Sports, among many others, encouraging you to go online and win tons of money playing fantasy football, baseball, and hockey, among others. According to one commercial, one lucky player won $2 million with just a $35 investment. Does this sound like gambling? (more…)

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