Charles B. Kramer

Charles B. Kramer is an intellectual property and corporate attorney based in New York City. His experience includes 3 years as an associate in the Wall Street law firm Lord, Day & Lord, 10 years managing a private law practice, and 5 years as General Counsel of a software company in New Jersey. He has particular experience representing computer game companies, and has spoken many times about cutting-edge legal issues at conferences, including at the Game Developers Conference and the Digital Video Conference.

In 2001 he became a distance bicycling fanatic, and did the Transportation Alternative Century (100+ miles!) in 2001 and 2002.


Sunday, January 18, 2009

Looks like an auction, but smells like a lottery

A look at how new auction websites are walking the line between legal sweepstakes and illegal lotteries

A SWEEPSTAKES, A LOTTERY OR SOMETHING ELSE?

There’s a new game in town.  Instead of a sharpie lurking in the shadows inviting you to pick a card, any card is the website equivalent holding a royal flush of iPods.

In the United States, at least, gambling has long been considered not just illegal, but immoral and depraved.  The Quakers (the USA’s colonial arrivals who begot frontiersman Daniel Boone and Presidents Hoover and Nixon) forbid cards, dice, and other similar amusements.  They “thought it right, upon the same principle, to forbid the custom of laying wagers upon any occasion whatever, or of reaping advantage from any doubtful event, by a previous agreement upon a moneyed stake”  (from the Quaker View of Gambling by Thomas Clarkson (1806)).  The Quakers also discouraged the buying and selling of publicly traded stocks.

Maybe they were on to something….

Of course States have been able to run lotteries pretty much forever, and now casino gambling is available in many places.  Whether the susceptibility to gambling represents a psychological disorder or just an evolutionarily useful “risk taking” gene may be debatable, but not so the amount of money spent: billions per year on gambling, more than the total spent during the same period on movies, sporting events, concerts and amusement parks combined.

While lotteries and other types of gambling are illegal (at least unless the State or sovereign Native Americans get involved), running a sweepstakes is legal.  In general, for a game to be gambling (and illegal) it must contain all three of these elements:

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