Loot Boxes in Videogames: Gambling by Any Other Name?

Jeffrey N. Rosenthal and Ethan M. Simon

To quote classicist author Edith Hamilton from her book The Roman Way to Western Civilization, “The comedy of each age holds up a mirror to the people of that age, a mirror that is unique.”  Nowhere is that statement truer than when discussing the comedic genius of the hit animated television series South Park, now approaching its twenty-second season.

In its 2006 Primetime Emmy Award-winning episode “Make Love, Not Warcraft,” South Park delved into video gamers’ obsession with the wildly-popular PC game World of Warcraft.  One of the show’s plotlines focused on a player whose in-game character had become so powerful the game’s developer had to devise a way to stop him.  The developer’s solution: give another player the legendary “Sword of a Thousand Truths,” a unique item that might even the odds.

Eight years later, South Park lambasted so-called “freemium” games in its Primetime Emmy Award-nominated episode “Freemium Isn’t Free.”  This episode, too, took a hard look at gaming culture, paying particular attention to “freemium games”—in which players can play a videogame for free, but to obtain certain desirable upgrades or items they must pay real-world money.  In this episode, an eight-year-old character spent thousands of dollars on freemium upgrades, much to his father’s chagrin.

Not surprisingly, South Park’s observations about videogame culture were right: gamers will place a premium on certain virtual items, and are eager to spend big money to get them.

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“Loot Boxes in Videogames: Gambling by Any Other Name?” by Jeffrey N. Rosenthal and Ethan M. Simon was published in The Legal Intelligencer on April 24, 2018.

Lessons from FinCEN’s Latest Gaming Enforcement Action

Eric G. Fikry and Lauren E. O’Donnell

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Flaster Greenburg

On Oct. 3, 2016, the Financial Crimes Enforcement Network assessed a civil monetary penalty of $12 million against CG Technology d/b/a Cantor Gaming, pursuant to the Bank Secrecy Act and its regulations, with which casinos are required to comply. In addition to the fine, Cantor is required to undertake remedial compliance measures and pay $16.5 million to the U.S. Department of Justice to settle a parallel investigation (a portion of the FinCEN fine was offset by this payment).

Cantor operates race and sports books in Nevada, offers mobile gaming within Nevada, and provides gaming technology to casino customers globally. It is licensed to operate at prominent Nevada establishments, such as the Hard Rock, Tropicana, Venetian and Palms. Its books are associated with high dollar value wagering and are popular with professional gamblers. Continue reading “Lessons from FinCEN’s Latest Gaming Enforcement Action”