Gambling, or ‘games of chance’.

Games of chance and their place in online advertising.

gambling - games of chance

Obviously, games of chance (gambling) are an incentive to increase membership activity on a site, but are they legal?

America is the largest market. Therefore, it is unlikely that your advertisement will not be seen in America. America also has incredibly powerful agencies whose sole directive is to protect the American public from anything that may cause harm.

For those reasons, I have chosen to look at American State laws relating to lotteries.

Lottery laws were designed to prevent illegal gambling.

California Penal Code 319 defines a “lottery” as:

[A]ny scheme for the disposal or distribution of property by chance,
among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property or a portion of it, or
for any share or any interest in such property, upon any agreement,
understanding, or expectation that it is to be distributed or disposed of by
lot or chance, whether called a lottery, raffle, or gift enterprise, or by
whatever name the same may be known.

Specialist MLM lawers have broken this down into a slightly easier to read statement:

Each of three elements must be present to constitute a “lottery,” namely, a prize,
distribution of the prize by chance, and consideration for the opportunity to win the
prize.

And MLMLaw also define consideration for us:

“consideration” (anything of value, frequently money or effort).

In essence:

  • If you have provided something of value (money, credits, time) and you will win a prize, you’re not gambling.
  • If you haven’t had to provide anything of value and you might win a prize, you’re not gambling.
  • If you have provided something of value and you might win a prize, you are gambling and the game is illegal.

Is there a place for games of chance in online advertising?

Emphatically (with a capital M) no! I will not promote any site that blatantly promotes/encourages gambling.

Lotteries, raffles, poker, dice, slot machines, prizebox, scratch & win, etc. Whatever they are called, if you have to put in effort for the chance of winning a prize you are gambling.

  • “everyone is doing it” does not make it right.
  • the value of the prize does not make a difference
  • being a closed membership doesn’t magically make the games legal

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