The Game Goes On: Sheppard Mullin Obtains Dismissal With Prejudice of Class Action Alleging Social Gaming Micro-transactions Constitute Illegal Gambling

Another lawsuit alleging illegal gambling in a social game has been dismissed.  Over the last year, social gaming mobile applications have come under attack from the Plaintiffs’ bar as gambling in disguise.  Plaintiffs’ attorneys theorize that in-app micro-transactions where consumers pay cash for virtual items (i.e., gold coins or gems) designed to speed up or otherwise enhance gameplay are, in effect, wagers insofar as other in-game materials can subsequently be “won” with those items.  None of the plaintiffs have prevailed in these recent cases. Continue Reading

Sweet Home Alabama for Daily Fantasy?

Alabama Senator Sanford introduced a bill February 2 that would exempt fantasy from Alabama’s gambling law The bill also would establish the Fantasy Contests Act to regulate the operation of fantasy or simulated contests in this state. This bill would require fantasy contest operators to implement procedures for consumer protection of fantasy contest players, would  require audits of fantasy contest operators, and would provide for civil penalties for violations.

No Southern Hospitality for Daily Fantasy Sports in Mississippi

The Mississippi AG issued an opinion last week declaring: “Fantasy sports wagering is illegal in the state of Mississippi under current law both on a licensed gaming floor and outside of a licensed gaming floor. Any change to the law would be a matter within the purview of the Legislature.” With respect to the skill component of DFS, the AG said it is not relevant under Mississippi law. Continue Reading

Hawaii is No Paradise for Daily Fantasy Sports – Skill Measured by Average Players, not Experts

Hawaii AG Doug Chin is one of the latest to opine that daily fantasy sports are illegal under that state’s law. According to a press release accompanying the opinion, “Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under the person’s control,” said Chin. “The technology may have changed, but the vice has not.” The AG opined that DFS is both a game of chance and a future contingent event not under the person’s control. Continue Reading

Texas AG Hits Deep in the Heart of DFS

Today,  the Texas AG issued an opinion that paid Daily Fantasy Sports (DFS) are illegal under Texas law, but noted that “traditional” fantasy sports leagues are, as a general rule, legal under Texas law. In so opining, the AG referenced Texas gambling laws (chapter 47) which state, in part: In Texas, a person commits a criminal offense if the person “makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest.” Continue Reading

Serious Games Require Serious Attention to Marketing Statements

Lumos Labs recently paid $2 million to the FTC to settle claims that it deceived consumers about its brain training application’s ability to increase cognitive function. According to the FTC,  the company alleged that its app, called Lumosity, provided many beneficial effects including the ability to improve users’ school and work performance, delay the onset of age-related cognitive disorders and help restore brain function lost as a result of brain trauma and other health conditions. Continue Reading

Daily Fantasy Legal Score: NYAG – 1; DFS Operators 1

With the ink barely dry on this morning’ s New York State court order requiring DFS operators in New York to cease operations, an emergency appeal was granted by the New York appellate court. The legal equivalent of a “Hail Mary” pass, means the DFS operators can continue to operate in New York, at least for now. The appellate court granted a stay, at least until January 4, 2016. The Court was apparently swayed by the argument that they would suffer irreparable harm if the order were to stand. Continue Reading

New York Court Sacks Daily Fantasy Sports

This morning, a New York State court ordered a shut down of the leading daily fantasy sports sites in New York, at least for now. The Court found the NYAG has a likelihood of success in showing that the activities are illegal gambling. The Court distinguished daily fantasy from season long fantasy sports and refused to find the entries were not bets or wagers despite the ruling in the Humphrey v. Viacom case in NJ.  Continue Reading

New Fantasy Lawsuit – A Horse of Another Color?

While all eyes remain focused on the impending preliminary injunction ruling in the New York state daily fantasy sports suit, a new fantasy sports suit has been filed in California. The California suit targets DerbyWars, a fantasy site based on horseracing, for allegedly accepting wagers in violation of the Interstate Horseracing Act (“IHA”). DerbyWars awards cash prizes to players who accumulate the most points based on predicting the winners of horse races over the span of a given tournament.  Horse Racing Labs LLC (also known as Immerse, LLC), the company that operates DerbyWars, keeps a portion of each tournament pool. Continue Reading