Swoopo!: Do Penny Auction Sites Run Afoul of California Gambling Laws?

[PennyAuctionWatch]

Read David Johnson, business lawyer's blog: http://www.digitalmedialawyerblog.co...ion_sites.html

[Eileen]

Thank you for this link!

[tracie_n_AnCapMan]

Definitely not gambling....

You can enter tournaments as an amateur or professional in bowling, darts, billiards, poker, etc..

while there is an element of chance in all of these, most of these competitions are won by veteran players skilled in their game, and well practiced and equipped. Gambling should be defined as wagering some form of value where the outcome is determined randomly under the mathematical law of independent trials.

Penny Auctions were first thought up by Dr. John Nash in the form of a Dollar auction where a dollar is auctioned off between 2 people and bidding started at 1 penny. In his original game the dollar would be sold for much more than a dollar. Where the element of chance comes in is where there are 3 or more players, and 2 of them are experiencing volunteers dilemma - the strategy therefore in these games is to not be one of the few in this dilemma or to better put it, be in the lead and have others waiting til the last second to bid.... This is not chance but skilled play.

Also even if it were gambling - People should be free to enter into contracts as they see fit, as long as their is no fraud or force being used I don't have a problem with anyone choosing to do what they want to do.

[Ryan]

Nice post, I agree for the most part. However, there are many new variations of the game coming out, some of which could be argued lose the element of skill. One such variation is when you bid and get revealed a price, but the winner is the one who reveals $0.00. Although I guess you could argue that there could be skill in these too.

[Auction Owner]

hello

We have the same laws in Asutralia and this is why we have worked hard with our lawyers to try and change this law within Australia.

We put our request to to the high courts and Crown Council of Australia into implementing a new law within Aust for these Pennyauction and Unique bid auction websites.

Like I have stated in other posts we have one of the top lawyers in the country working for us.

This is where we are up to on this matter.

My lawyer and I have been asked by the Crown Counsil of Aust to hold a face to face meeting on Monday the 14th of this month (yes next week) as they also see that these auction operate between the fine line of the law.

Just getting a face to face meeting is a hugh step as these people are not easy to access.

I with my lawyer have written up what we think the should be the law for these websites and as such we are creating this new law to be implimented within Australia.

Thier is also a chance as this is what we are working towards it that we will own the rights to this law and be allowed to govern it and keep track of it's use by others.

I will be sure to let you know how this goes although I can only reveal so much at this point.

Cheers

[Auction Owner]

This is addressed to both pennyauction owners and bidders in relation to the above post.

If you would like to support and see Pennyauction website have a law created that allows them to operate without having the gambling commission or other agencies looking for ways to shut us down the please either email me at [email protected] or post your thoughts here Giving me permission to use your comment in court ( anonamously of cause) then please do so as all support we be greatly appreciated.

No country has a law which covers pennyauction websites and we have lots of organisations trying to look for ways to shut us down in the USA, UK and in Australia.

It doesn't matter where you are from as once one country has accepted pennyauctions and thier has been a law that covers us it will make other countries start accepting them also.

Please read my next new thread called "Paypal" for more on this also.

All support is and will be appreciated.

Cheers

[tracie_n_AnCapMan]

Nice post, I agree for the most part. However, there are many new variations of the game coming out, some of which could be argued lose the element of skill. One such variation is when you bid and get revealed a price, but the winner is the one who reveals $0.00. Although I guess you could argue that there could be skill in these too.

I agree - but once again I stand by my definition of gambling as being a situation where something of value is placed in risk in a game of random chance governed by the law of independent trials. The new types of auctions where a winning price is revealed AT RANDOM would fit my definition of a game of chance.

Auction Owner you can use any of my posts for this. As well as my post (which was on the blog main page) about volunteers dilemma and the game theories behind penny auctions.... true penny auctions are perfectly legal even under the oppressive governments of US, UK, AU, etc.... Its too bad we have to ask permission from our slave masters to engage in commerce and contract voluntarily...

[Auction Owner]

Auction Owner you can use any of my posts for this. As well as my post (which was on the blog main page) about volunteers dilemma and the game theories behind penny auctions.... true penny auctions are perfectly legal even under the oppressive governments of US, UK, AU, etc.... Its too bad we have to ask permission from our slave masters to engage in commerce and contract voluntarily...

Pannyauction sites are legal only to a certian extent as here they are concidered a game of chance and skill.

This is why we are doing what we are. We have a few time based pennyauctions waithing to go live but haven't started them up as yet pending the outcome of the Crowns Council decision.

Any support as to why you think a pennyauction site should not be concidered a game a skill or chance would be appreciated. Just email me at [email protected]

The main issues with the authorities that are trying to shut pennyauctions down are from the gambling comission and they are;

1 - We are a game of chance
2 - We are a game of skill
3 - The profit margins we use full in line with gambling profiteerers.
4 - Paying to bid is like paying to play a lottery.
5 - The fact that some of these pennyauction sites buy as they sell and not buy to sell items.
6 - The time based auctions incourage people to spend more than they would if they didn't ingage in a bidding war.
7 - They say that we work on a skill or chance factor and notpure luck.

Anyone will to send a support email please do so.

Also read my new threat about Paypal and what we have found out through methods I can't mention here.

[botham]

Hi me botham and going to visit this site first time.

[Stuff4me2Win]

Read David Johnson, business lawyer's blog: http://www.digitalmedialawyerblog.co...ion_sites.html

Thanks, it was a very good read. Here's what I get out of it.

With what it seems is a simple model, and many sites have been able to duplicate it; most look to Swoopo as the defacto PA site which is raking it in hand over fist. Why then do they need more investors after 3-4 years of its first initial investment? Are they not making the kinds of money most start-up believe they are? They have 58 employees, I'm sure a boatload of servers, multiple hosting locations. I know they spend a lot for advertising; though I don' t think I've seen that much on the internet. You would just think that with the prices their auctions go for, that they wouldn't need another injection of capital.

Next thing I took from this article. Swoopo is owned by Entertainment Shopping Inc. How long will they go before they start hitting the "little guys" for using the term Entertainment Shopping on their sites, and infringing on that name, clearly owned by Swoopo?

My 2cents..

[eleanore]

I think that the laws regarding gambling are so confusing that no one know if it is legal or not. In America it changes from state to state.
So is gambling legal in California? I think it would be better to legalize it every where so that confusions can be avoided.