Gamblification: The Legal Status Of Gambling Mechanics In Interactive Entertainment

An increasing number of interactive entertainment offerings include some form of gamblification, i.e., the use of gambling mechanics for non-gambling purposes. Many of the top apps in the App Store are simulated casino games, where players pay real money to win virtual chips, but cannot cash out. Other apps use virtual currency and other game mechanics to give players a sense of “winning,” albeit not real money. One cannot turn on the TV without seeing an ad for fantasy football, where players pay money to select players and whoever’s player earns the most points wins cash prizes 

Many similar game mechanics and business methods are being used in other creative ways. All of these offerings create great player excitement and are producing huge revenues. However, such offerings need to be carefully analyzed to ensure legality under federal and state laws. Many regulators are taking a closer look at the legality of some of these offerings and a number of state legislatures have passed or are seeking to pass new laws to specifically address these types of activities.

This course, presented by James Gatto, Sheppard Mullin’s Co-leader of its Social Media and Games Team, reviews the legal issues with gamblification, addresses some of the current legislative and regulatory activity and offers practical guidance to consider when leveraging gamblification in interactive entertainment.

Learning Objectives:

I.      Identify types of gamblification activity

II.     Grasp relevant federal and state laws and regulatory activity

III.    Assess how these laws apply to different types of activities

IV.    Provide practical guidance to reduce legal risk with gamblification