Tapjoy, Inc. (“Tapjoy”), a mobile advertising company, settled FTC allegations that it failed to provide promised in-game rewards to consumers. Tapjoy operates an advertising platform that works within mobile games and offers in-game virtual currency to users who complete the activities of third-party advertisers (i.e. purchase products, sign up for a free trial, take a survey). Despite hundreds of consumer complaints, Tapjoy failed to deliver on its promises to consumers who earned in-game rewards.
Continue Reading Mobile Advertising Company Gets Flack from FTC for Failure to Deliver Upon Advertised Promises

The United States Securities and Exchange Commission (“SEC”) has indicated that nearly all initial coin offering (“ICO”) filings they have seen are securities offerings. Based on this expansive view, it may be more likely to find a Unicorn than an ICO that is not a securities offering. Ironically, a recent lawsuit was filed against Unikrn, a block-chain based betting platform, primarily focused on esports betting.
Continue Reading Is there a Unicorn Among ICO Issuers?

Advertising for new games can present some troublesome legal issues, if due care is not taken. A recently concluded matter in the UK highlights an example of the potential issues. Hello Games was investigated by the Advertising Standards Authority (ASA), based on complaints from customers that advertised features of its game (No Man’s Sky) either did not actually appear in the game or did not appear in the way advertised. The ASA ruled, in this case, that the advertising was not in fact legally misleading. Notwithstanding this ruling, game publishers need to be careful when advertising new games.


Continue Reading Don’t Game Your Players with False Advertising

A Federal Court in Washington state dismissed a Plaintiff’s class action claims that social casino games using purchasable virtual casino chips  constitute gambling under Washington state law. The Court found that the virtual chips have no “value” and therefore the game did not constitute gambling because Plaintiff was not “staking or risking something of value.”
Continue Reading Another Gambling Class Action Fails – Court Finds Social Casino Games Not Gambling

A Maryland Court recently dismissed a case in which Plaintiff alleged that a virtual currency casino within a social game constituted illegal gambling, despite the existence of a secondary market for the player accounts. For purposes of assessing whether the game was skill or chance-based game, the Court found that the social game, as a whole, was a game of skill, and refused to adopt the Plaintiff’s approach of considering the “casino” itself a chance-based game. This ruling is significant for social game companies that use virtual currency to engage in gamblification (i.e., the use of gambling mechanics for non-gambling purposes).
Continue Reading Court Rules Virtual Currency Casino Not Illegal Gambling Despite Secondary Market

Edited by Ben Mulcahy

A longer version of this article was recently published by Bloomberg BNA.

Creating a new rule that gives videogames much more limited protection than other expressive works, the Ninth Circuit has ruled that realistically depicting college athletes in videogames showing them doing what they became famous for doing—in this case, playing football—is not sufficiently transformative to avoid a state law right of publicity claim. In In re NCAA Student-Athlete Name & Likeness Licensing Litigation (Keller), 2013 WL 3928293 (9th Cir. July 31, 2013), the court held that Keller, a former college athlete prohibited by NCAA rules from commercializing his name and likeness rights, could pursue a right of publicity claim based on the use of his likeness in a football videogame—a work admittedly protected by the First Amendment—despite the game producer’s assertion of First Amendment defenses. This decision, following on the heels of the May 21, 2013 opinion in Hart v. Electronic Arts, Inc., 717 F.3d 141 (3rd Cir. 2013), which was heavily relied on by the Keller decision, as well as its re-interpretation of precedent in the right of publicity area that had up-to-now been considered well-established, are sure to have unintended consequences extending to branded entertainment and other hybrid contexts where brand messages and creative expression combine.


Continue Reading Ninth Circuit Fumbles The Ball In Videogame Likeness Cases

On Feb. 20, 2009 the 9th Circuit Court of Appeals struck down a California law banning the sale or rental of “violent video games” to minors and requiring such games to be labeled “18” (the legal age for adults). While this decision may surprise some California lawmakers and parents, its holding is fully consistent with substantial U.S. Supreme Court precedent entitling minors to a signifi cant measure of First Amendment protection, and leaving parents with the duty to supervise “appropriate” content.
 


Continue Reading A New Game Plan