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Fake Gambling


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#1 Punk Designer   Members   -  Reputation: 137

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Posted 08 July 2011 - 09:58 AM

Hello,

I was wondering if anyone knew, or could point me to the law(s) on gambling that doesn't involve money.

I am making a game where players can place bets using in-game money on live (computer controlled) events. Players can use said in-game money to buy prizes, these prizes are not material things but virtual prizes like profile pictures, art, music etc.

I am assuming that because there is no real world money involved that it should be fine, though I know the rules on gambling and prizes for that matter are very strict. I am also a little weary of which prizes I can offer, the game would be casual and any prizes wouldn't have much or any real world value.

Any help would be appreciated, Thank you.

Sponsor:

#2 Tom Sloper   Moderators   -  Reputation: 10062

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Posted 08 July 2011 - 10:33 AM

1. I was wondering if anyone knew, or could point me to the law(s) on gambling that doesn't involve money.
I am making a game where players can place bets using in-game money on live (computer controlled) events. Players can use said in-game money to buy prizes, these prizes are not material things but virtual prizes like profile pictures, art, music etc.
I am assuming that because there is no real world money involved that it should be fine, though I know the rules on gambling and prizes for that matter are very strict.
2. I am also a little weary

1. Very tricky. Highly advisable that you check with an attorney. There have been cases where even in-game goods are considered to have real world value.
2. "Leary" or maybe "wary," but not "weary" (tired).
-- Tom Sloper
Sloperama Productions
Making games fun and getting them done.
www.sloperama.com

Please do not PM me. My email address is easy to find, but note that I do not give private advice.

#3 Songbird   Members   -  Reputation: 131

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Posted 08 July 2011 - 11:15 AM

You may wish to check you specific state's/coutry's laws, but a quick internet search found me this (from Nevada, since they are the world center of gambling).

NRS 463.0152 “Game” and “gambling game” defined.

“Game” or “gambling game” means any game played with cards, dice, equipment or any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value, including, without limiting the generality of the foregoing, faro, monte, roulette, keno, bingo, fan-tan, twenty-one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck, Chinese chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, any banking or percentage game or any other game or device approved by the commission, but does not include games played with cards in private homes or residences in which no person makes money for operating the game, except as a player, or games operated by charitable or educational organizations which are approved by the board pursuant to the provisions of NRS 463.409.


and


NRS 463.01862 “Representative of value” defined.

“Representative of value” means any instrumentality used by a patron in a game whether or not the instrumentality may be redeemed for cash.


So, according to NV law, as long as the instrument can not be redeemed for cash it should be fine. Which I suppose is how Chuck-E-Cheese gets away with it. You can only exchange your tokens for items and not cash. Ultimately, due to the incredibly large amount of gambling simulations out there, I would expect you to be fine. Just do a check and see if Zynga's Texas Hold'em Poker has ever been litigated against due to breaking gambling laws.


But, if Mr. Sloper has some actual links to such cases instead of anecdotal evidence I would be interested as well. I know that in this article at Cracked.com, a guy stole almost 150,000 USD in in-game goods which can be exchanged for cash and hasn't had any criminal charges brought up against him.

Edit: Here is a link to the UIGEA, the US Law that governs Online gambling.

#4 frob   Moderators   -  Reputation: 22218

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Posted 09 July 2011 - 11:12 PM

But, if Mr. Sloper has some actual links to such cases instead of anecdotal evidence I would be interested as well. I know that in this article at Cracked.com, a guy stole almost 150,000 USD in in-game goods which can be exchanged for cash and hasn't had any criminal charges brought up against him.


Digital goods absolutely have value. This has been both assumed and stated in the courts many, many, many times. I remember hearing cases about it back in the mid 80's. Today just look at the number of DMCA lawsuits out there. A thing can exist only in digital form and yet be the subject of multi-billion dollar legal penalties.

A thing does not need to be tangible to have value.

As for the Cracked.com article, that is certainly one author's take on it, but I find it very misleading. The person involved actually did take efforts to stay within the law, since he was operating a virtual bank. He worked with the organization to prevent money laundering and other problems, and collected a small portion of the transactions as his own profit. It took him effort to cultivate a community, which quickly accelerated and gave him a significant amount of digital goods.

Check out my book, Game Development with Unity, aimed at beginners who want to build fun games fast.

Also check out my personal website at bryanwagstaff.com, where I write about assorted stuff.


#5 frob   Moderators   -  Reputation: 22218

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Posted 09 July 2011 - 11:18 PM

As the instrument can not be redeemed for cash it should be fine. Which I suppose is how Chuck-E-Cheese gets away with it. You can only exchange your tokens for items and not cash. Ultimately, due to the incredibly large amount of gambling simulations out there, I would expect you to be fine. Just do a check and see if Zynga's Texas Hold'em Poker has ever been litigated against due to breaking gambling laws.


No, the companies "get away with it" because they follow the law.

The companies pay attorneys. The attorneys know and understand the laws. The attorneys write and review the contracts and ask questions about the details of the business to ensure that they stay within the law.


If you are opening your own business that has legal risk, such as electronic gambling elements, then you really need to discuss it with an attorney yourself. They can probe the depths of what you are doing and make sure your plans will comply with the law. Or they can warn you that you are probably within the law and at high risk of lawsuit. Or they can tell you that you are outside the law, and help you make the necessary changes to your plan.

Going into business without discussing your plans with relevant business lawyers is a very foolish thing to do.

Check out my book, Game Development with Unity, aimed at beginners who want to build fun games fast.

Also check out my personal website at bryanwagstaff.com, where I write about assorted stuff.


#6 Hodgman   Moderators   -  Reputation: 30926

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Posted 09 July 2011 - 11:27 PM

Plenty of games let you wager in-game (non-redeemable) "currencies" on in-game events -- case in point: call of duty 7.
Can your virtual "currency" only be redeemed for in-game items (e.g. new pictures for your avatar), or does it unlock thing in the real world (e.g. downloadable wallpapers for your PC)?

Pretty much every video game in existence is a device for placing a virtual "value" at risk in order to possibly gain more virtual "value", within the confine of that virtual world.


If people are paying you with real money to gamble on real-world prizes though, then your game would fall under AWP or SWP regulations.

#7 frob   Moderators   -  Reputation: 22218

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Posted 10 July 2011 - 11:41 AM

Plenty of games let you wager in-game (non-redeemable) "currencies" on in-game events -- case in point: call of duty 7.

... Which is released by Activision, who has an entire legal department that verifies the legal status of the games in all territories where they are released.

Every game I've worked on has had a step where everything gets verified by the publisher's legal department. I've had two games where we needed to make some design changes to accommodate various territories for legal reasons.

Pretty much every video game in existence is a device for placing a virtual "value" at risk in order to possibly gain more virtual "value", within the confine of that virtual world. If people are paying you with real money to gamble on real-world prizes though...




The OP specifically mentioned in-game gambling with in-game bets with rewards of persistent virtual goods. He mentioned risking a thing of value (virtual goods) in a game of chance, with the hopes of another thing of greater value. Gambling laws vary widely by location and can include criminal penalties such as jail time. It is an area that should not be navigated without a lawyer's scrutiny.

Check out my book, Game Development with Unity, aimed at beginners who want to build fun games fast.

Also check out my personal website at bryanwagstaff.com, where I write about assorted stuff.


#8 Songbird   Members   -  Reputation: 131

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Posted 11 July 2011 - 02:57 AM

Digital goods absolutely have value. This has been both assumed and stated in the courts many, many, many times. I remember hearing cases about it back in the mid 80's. Today just look at the number of DMCA lawsuits out there. A thing can exist only in digital form and yet be the subject of multi-billion dollar legal penalties.


DCMA deals with copyrights and intellectual property, not gambling. And the OP clearly asked about gambling laws, not IP laws.

Ultimately it boils down to where the OP is located at and what level of risk he wishes to undertake for his project. But with no one able to cite any sort of legal precedent, the overall risk appears to be very low. Unless he engages in IP theft, which then raises the risk level to very high.

#9 Punk Designer   Members   -  Reputation: 137

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Posted 11 July 2011 - 03:20 AM

This is a very interesting conversation. Thank you for engaging in it so, passionately.

If it helps, I am based in the United Kingdom.

I am assuming that there are lawyers that deal with specific multi-media law, I should probably prepare a more detailed document, both technical and design before attempting what is probably paid legal advice.

I am to make the engine based on a set number of variables that will in hand with a random element that will give an out-come, I would hope the fact that the system is not biased and there is no human interaction with the system post-completion would make it easier for this idea to be legal.

Thank you for the examples, interesting and the names of governing bodies.

#10 Hodgman   Moderators   -  Reputation: 30926

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Posted 11 July 2011 - 03:52 AM

The OP specifically mentioned in-game gambling with in-game bets with rewards of persistent virtual goods. He mentioned risking a thing of value (virtual goods) in a game of chance, with the hopes of another thing of greater value.

That's why I asked if these goods were game-play features or actually accessible outside the game.


If the prize stays inside the game, then it's a video game and isn't regulated. If the prize is external to the game, it's an 'AWP' or class D gambling machine. If the latter, you'd need a license to operate it (in the UK).

I am to make the engine based on a set number of variables that will in hand with a random element that will give an out-come, I would hope the fact that the system is not biased and there is no human interaction with the system post-completion would make it easier for this idea to be legal.

Not really - it's the act of gambling (if it really is gambling) that causes it to be regulated, not the specific method -- the actual method just moves you under different sub-sections of the regulations.


#11 Punk Designer   Members   -  Reputation: 137

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Posted 11 July 2011 - 07:53 AM

At the start of the topic I stated that I wanted to offer things like art and music as prizes, hoping to get some free or donated prizes to offer players. This seems like it is going to be a problem, as I think that even though these prizes are pretty much worthless they still have a worth and thus like Hodgman was saying falls into a distinct legal area.

I have had a plan B though, it is not as fun but will allow for a different type of community experience. The prizes in plan B are only usable within the game and the accompanying forum, they include things like titles, profile pictures, access to sub-forums, and access to grander betting options. They would be non-tradable also, though that wouldn't stop people selling their accounts. It really limits what I was trying to do by offering indie/donated virtual goods but I am not here to discuss the design.

Plan A is to offer indie/donated things like stories, art, music and even small games in the hope that people would use in-game credits to gain access to them and that people would donate in order to get their name out there. This is, I am well aware, very difficult and probably won't work the way I envision.

Plan B is to offer social and profile customizing content like I have listed above, and also access to more in game features like extra events, extra betting options, and obviously a high score board. The idea would be to set up a community of people through forums and moderators who use the game and the social/customize prizes for social interaction. Linking this with social networking site, emails, etc.

Those are the two plans, I am not set in stone but I do want to do something with the system and offer something back to players as this will encourage them to return and enjoy. Though of course I don't want to be sued or reprimanded for breaking any laws.

#12 GoofProg.F   Members   -  Reputation: 92

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Posted 28 July 2011 - 11:30 AM

I know that if it is a casino type of game with payouts then you may want to check this out.
http://gaming.nv.gov/

If it has prize winnings...
http://www.irs.gov/govt/tribes/article/0,,id=102552,00.html zoom down to 1099-MISC
General Studies A.S - College of Southern Nevada 2003 GPA 2.3




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