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The company’s platform offers games in two separate formats: (i) a standard, social casino format (the “Standard Play”) which offers gameplay via “eCredit Games” and (ii) a sweepstakes-based promotional format (“Promotional Play”) which offers gameplay via “Sweepstakes Games” to players. The eCredit Games offer a virtual prize – eCredits (also referred to as “Gold Coins”) that cannot be redeemed in any manner and can solely be used for gameplay in the eCredit Games. eCredits, used for entry in eCredit Games, may be purchased from the company using the kiosk. eCredits can also be obtained through other promotional methods (e.g., a sign-up bonus). The Sweepstakes Games offer a prize, known as the Redeemable Sweeps Coins, that have a real money redemption value. Players can obtain Sweeps Coins only through free promotional methods including a free, alternative mode of entry. Sweeps Coins, used for entry in Sweepstakes Games, may never be purchased from the company or otherwise. One can choose to either play with eCredits in the eCredit Games or with Sweeps Coins in the Sweepstakes Games, but there is no interconnection between the two formats.
Generally, gambling laws require three elements to be considered illegal gambling: consideration, chance, and prize. In eCredit Games, players pay money to obtain eCredits, so there is consideration. The eCredit Games are games of chance because the outcome is determined by a random number generator. Thus, the key question is whether there is a “prize.” In the eCredit Games, a user may win and must play with virtual coins that (1) have no secondary market value; and (2) can only be used to obtain additional game play. There are no redemptions for “real world” prizes. Given these circumstances, the element of prize – which is essential to a finding of gambling – is absent with regard to the eCredit Games under most laws. Thus, in the absence of prize, the games should not be considered illegal gambling under most laws.
As applied to the Sweepstakes Games, this analysis produces a similar result, though with the element of consideration missing, instead of an absent prize element. Although the Sweepstakes Games contain both chance and a prize (because the prize is Redeemable Sweeps Coins that can be redeemed for real money), they do not have “consideration” because users cannot pay to enter or participate in the Sweepstakes Games. Rather, all entries to the Sweepstakes Games are made either through one of the promotional means (e.g., via a daily bonus obtained by logging into the platform or free social media contests) or through a free, alternative mode of entry through which players can receive additional Sweeps Coins. In addition, players can obtain Sweeps Coins as a free bonus incidental to some purchases of eCredits. Under all circumstances, the player does not provide consideration to obtain the Sweeps Coins, but rather obtains them for free. In the absence of consideration, the Sweepstakes Games generally should not be considered illegal gambling under most laws.