

Ask HN: Is it legal if my webapp rewards the winners with a gift certificate - ssing

I am starting a website where users predict individual match outcomes. I am thinking of rewarding them with a gift certificate. Is it legal. Any insight will be very helpful.
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ssing
Below is the extract from Google Code In Contest.

4\. ELIGIBILITY: The Contest is open to individual students who are at least
thirteen (13) years of age and no older than eighteen (18) years of age on
November 22, 2010 who are currently enrolled in a pre-university, high school
or secondary school program, and who have agreed to these Rules
(“Participants”). You must demonstrate the consent of a parent or legal
guardian in order to be eligible to receive any prizes as well as written
proof of age and proof of enrollment in a pre-university, high school or
secondary school program. The Contest is not open to residents of Cuba, Iran,
Syria, North Korea, Sudan, Myanmar (Burma), or to other individuals restricted
by U.S. export controls and sanctions, and is void in any other nation, state,
or province where prohibited or restricted by U.S. or local law. Employees,
interns, contractors, and official office-holders of (1) Google, (2)
participating Open Source Organizations, (3) the parent companies, affiliates
and subsidiaries of either Google or any participating Open Source
Organization, and members of their immediate families (defined as parents,
children, siblings and spouse, regardless of where they reside, and/or those
living in the same household of each) are ineligible to participate in the
Contest. You must have access to the Internet and either have or sign up for a
free Google Account in order to enter.

[http://www.google-
melange.com/document/show/gci_program/goog...](http://www.google-
melange.com/document/show/gci_program/google/gci2010/rules)

Will I be covered if I add similar text on the Eligibility page/section on my
app. Is there anything else that I need to consider.

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rroyall
If you are hosting your site in the US, this might fall under gambling
statutes. Your options are probably: a) this is illegal just like other online
casinos, or b) this isn't illegal but you may fall under contest regulations
which are different from state to state. If you are hosting outside the US,
you might fall under whatever gambling or contest statutes apply in that
country.

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ssing
Could you please elaborate why you consider it gambling or betting. All I am
doing is picking the obvious winner from the participants and rewarding him
for his expertise. Also I am not charging any money for participation. I am
just trying to get more information to make the decision.

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rroyall
I wasn't sure what you meant by what you said regarding users picking outcomes
- if it was something on the order of a lottery, that would probably be
covered under betting laws. If it's something like a trivia quiz and whoever
gets the most right answers wins, that would probably be covered under contest
law, which is just as complex.

In the US at least, every state determines what is and isn't a contest and
what rules apply, though most of them apply to any game where the reward is
money or some sort of tangible item (even if players don't have to pay
anything to play). That's why if you look closely, some of the fast food
contests (like McDonalds Monopoly) say something in the fine print like "Not
valid in New York or Rhode Island" or something to that effect. They've
determined that their game won't meet the contest laws in those states so they
simply say if you live there, you can't play.

~~~
ssing
Thanks for the detail insight.

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tarikjn
Legal can sometime be a bit like coding, some laws in this domain are still
changing (ie. France just recently allowed online casinos). My advise is use
the most common denominator in your space, launch and tweak, it's like coding.
That's what most successful companies have done. You don't get in much trouble
until you have a certain level of success. Of course you need to have a good
approach, good intentions and know what you are doing. But you can never
really know it all, so that's my advice.

~~~
tarikjn
Btw if the users are paying, predicting the outcomes of a match is definitely
gambling (like gambling on horses), so simply look at the laws for online
gambling. Since it's online, most likely only the laws of the state where you
host are applied (even for foreign countries, that's how French could play on
online casinos before). You might simply host that feature and a subsidiary
for it in a state with online-gambling friendly laws. Maybe Nevada, maybe some
states or countries have no laws at all on it and even no taxes.

If it's free I'd say it either fall in (free) lottery or contest, it's hard to
tell. Either way your best approach is simply host it in a state with no laws
at all on the matter. Or if you have a good way to justify it is neither
lottery or contest you might as well be fine anywhere.

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cgshaw
I'm a lawyer, I have no idea why it would be illegal. Are you giving them
rewards for sexual favors, drugs, machine guns or votes?

Beyond the sort of obvious things, I don't know why you'd be breaking the law.

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ssing
The rewards is only for predicting the outcomes of the matches. But heard from
friends that you need to check the legal aspect of it. Got concerned and
wanted to double check and get HN user's feedback.

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ssing
I asked this question yesterday but it was kind of late and didn't get
complete information. <http://news.ycombinator.com/item?id=2014626>

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DupDetector
There are a few comments from when this was submitted by the same person
yesterday:

<http://news.ycombinator.com/item?id=2014626>

~~~
ssing
Yes. I have mentioned it one of the comment. See below

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spooneybarger
why wouldnt it be legal?

