Another Gambling Class Action Fails – Court Finds Social Casino Games Not Gambling

A Federal Court in Washington state dismissed a Plaintiff’s class action claims that social casino games using purchasable virtual casino chips  constitute gambling under Washington state law. The Court found that the virtual chips have no “value” and therefore the game did not constitute gambling because Plaintiff was not “staking or risking something of value.” Continue Reading

Court Rules Virtual Currency Casino Not Illegal Gambling Despite Secondary Market

A Maryland Court recently dismissed a case in which Plaintiff alleged that a virtual currency casino within a social game constituted illegal gambling, despite the existence of a secondary market for the player accounts. For purposes of assessing whether the game was skill or chance-based game, the Court found that the social game, as a whole, was a game of skill, and refused to adopt the Plaintiff’s approach of considering the “casino” itself a chance-based game. This ruling is significant for social game companies that use virtual currency to engage in gamblification (i.e., the use of gambling mechanics for non-gambling purposes). Continue Reading

New York Sacks Daily Fantasy Sports; Gives Pass to Traditional Fantasy Sports

The New York attorney general issued a cease and desist order to a number of daily fantasy sports (DFS) operators alleging that DFS constitutes illegal gambling under NY state law. According to the AG’s interpretation, DFS operations constitute illegal gambling under New York law, according to which, “a person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence,” because players are placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes. Continue Reading

Illinois Takes Consumer-Friendly Approach to Daily Fantasy Sports Regulation

Illinois is one of the latest states to initiate potential legislation involving daily fantasy sports (DFS).  Like a number of other states, it is not declaring DFS illegal. Rather, it is taking a very consumer protection focused approach. According to Rep.  Mike Zalewski (D, Ill.), the forthcoming legislation would create standards for auditing daily fantasy companies that do business in Illinois and prohibit fantasy sports operator employees from playing in contests on other sites, in addition to other potential restrictions. Continue Reading

Massachusetts Joins List of States Reviewing Daily Fantasy Sports

Despite Massachusetts being the home to DraftKings, Attorney General Maura Healey said it would be reviewing the legality of daily fantasy sports (DFS). This announcement comes on the heels of a request by Congressman Pallone (NJ) for Congress to hold hearings on the legality of DFS. In a September 14, 2015 letter to the Committee on Energy and Commerce, Pallone did a nice job of laying out the issues around DFS. Other states have also been interested in this topic. Recently, Michigan’s Gaming Control Board issued a statement saying it believed DFS is illegal in Michigan. Potential legislation would provide a path to legalization. Continue Reading

New Jersey Congressman Questions Legality of Daily Fantasy Sports

There is something to be said for keeping a low profile. Apparently, daily fantasy sports companies DraftKings and FanDuel are not fans of the idiom, as viewers that tuned in to week 1 action of the NFL were inundated with commercials from both companies. The volume of the ads apparently caught the attention of New Jersey Congressman Frank Pallone who, as this article notes, has called for a hearing to explore the relationship of fantasy sports and gambling. Continue Reading

Fantasy Sports Regulatory Climate — Sunny with a Chance of Clouds

The vibrant fantasy sports market appears to have a bright, sunny future. But the Michigan Gaming Control Board may have introduced a cloud to those sunny skies. According to an article by Legal Sports Report, daily fantasy sports may not be legal in Michigan.

Other states are looking at these issues as well. It is important to ensure that these innovative fantasy sports business models are carefully assessed for legal compliance.

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The Days of the Vultures (Silicon Valley – Season 2 Finale)

This season’s finale of Silicon Valley provided Richard with only the briefest moment of victory before he once again faces losing Pied Piper.  First, the arbitrator rules that because Richard used a Hooli computer while developing Pied Piper, under the invention assignment provision of Richard’s employment agreement with Hooli, Hooli would have the right to Pied Piper’s technology.  However, because the employment agreement also contained unlawful non-compete provisions, the arbitrator held that the entire employment agreement was unenforceable, including the invention assignment portion.  Therefore, Hooli had no right to Pied Piper’s technology, and Richard won!  In the meantime, the Pied Piper team triumphs by successfully livestreaming the condor cam video to 200,000 viewers—including Laurie, the head of Raviga Capital.  Laurie is so impressed with the technology that once Hooli loses the arbitration, Raviga buys out Russ’s stake in Pied Piper.  Raviga now controls three of Pied Piper’s five board seats:  Russ’s two seats plus the seat filled by Monica as Raviga’s designee.  However, Laurie is also underwhelmed by Richard’s performance as CEO.  After gaining control of the board, Raviga promptly votes its majority control to remove Richard as CEO of Pied Piper.  Continue Reading