I’m Betting That Overwatch Loot Boxes Aren’t Gambling (under 31 USC 5362)

Disclaimer: As with all of my posts, this is NOT LEGAL ADVICE. This is academic analysis on a subject of law – and I don’t even have a good tool set (WestLaw, Lexis, etc) for that.

1- Introduction: Micro Transactions and Loot Boxes

The business model for free to play games is to include micro-transactions for aesthetic, trivial add-ons. For Counter Strike: Global Offensive, this manifests as the opportunity to pay a few dollars to buy a key to unlock boxes which are randomly distributed during play. Paying to unlock a box gives a play a random chance to receive aesthetic enhancements for a weapon (a “skin”). The rarity of the skins varies widely. Some of the most rare and prized ones are occasionally sold on eBay (or other 3rd party sites) for over $1,000.*

The question is: Are Loot box systems gambling? What about cereal boxes, TCG booster packs, or other things that allow children to participate in contests involving chance?

Some internet-folk grew a discussion thread to eight pages on the Overwatch forums discussing this topic, and not a single one of them reached for a legal definition of the subject at hand. People just talked about how they felt about the subject. Apparently, it takes a law degree to find the first search result on Google. Law has some flexibility – and that makes these questions difficult-, but there are rules, people!

2- What is the Definition of Gambling?

(For simplicity, I removed references to Insurance, Commodities, and Securities.)

31 U.S. Code § 5362 – Definitions

(1)Bet or wager.—The term “bet or wager”—

(A) means the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome;

[Lotteries and gambling administration]

(E) does not include—

[Insurance, Commodities or Securities]

(viii) participation in any game or contest in which participants do not stake or risk anything of value other than—

(I) personal efforts of the participants in playing the game or contest or obtaining access to the Internet; or

(II) points or credits that the sponsor of the game or contest provides to participants free of charge and that can be used or redeemed only for participation in games or contests offered by the sponsor; or [Fantasy Sports]

3- Analysis: Winning the Gamble Must be Distinct from Winning the Prize

The real key is in part (1)(A): “upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding that the person … will receive something of value in the event of a certain outcome.”

Let’s take three examples that are not legally considered gambling: buying TCG booster packs, putting random prizes in cereal boxes, and… *sigh* there are a lot of reasons I don’t want to mention a certain online service that sends subscribers monthly boxes containing a random assortment of goodies… but imagine that such a thing exists.

My best guess** is that the law requires the “certain outcome” and the prize (“receive something of value”) to be two different and distinct things. In the case of cereal boxes and booster packs, the “certain outcome” is the prize. There is a chance of getting a Holographic Charzard, but winning only means getting the Holographic Charzard. You cannot “win” the card without, at the very same time, having the card: winning the prize always already entails having the prize.

In contrast, consider some examples that are legally considered gambling: slot machines, lottery tickets, and blackjack. In each of these cases, the outcome entitles the player to a prize: the slot machine dispenses quarters (“makes it hail”) as a result of the outcome. For a slot machine, the outcome itself is only a sequence of matched cherries or bars; for a TCG booster pack, the outcome of opening a pack is having a stack of cards.

This distinction may seem pedantic or petty, but it allows people to play games of chance without involving money. It allows people to play poker among friends for no money, or to made idle wagers for fun. It allows Disney to sell boxes of figurines with one shrouded “mystery” figurine included and it allows schoolteachers to play “Science Bingo” in class. It’s a tiny distinction that allows a lot of innocent behavior.

4- Application To Loot Boxes

However, there is still an interesting metaphysical investigation required to conclude this legal analysis: is the opening of a loot box like the opening of a booster pack, or is it like playing a slot machine? Is it actually two different events, or only one? Does the computer run the RNG when it is unlocked, and then determine the prize based on the outcome of the RNG? Or does the loot box already “contain” the prize before the opening?

Blizzard already told players not to bother hoarding loot boxes in the hope of getting future skins, because the contents of the box are already determined when the box is given to the player. If this is true (and if my guesswork-analysis is correct) then there is good reason to think that loot boxes are not legally considered gambling under 31 USC 5362.

I don’t know if a judge would actually go to this level of technical granularity, but there has been a long-standing debate about whether electricity should be legally classified as a “good” or as a “service” – and the distinction relies on a scientific understanding of whether you are being given electrons at your home, or just having your electrons vibrated. It seems like the order of operations carried out by a computer program is somewhat of a macro-level question than the movement of sub-atomic particles.

 

*A tiny cottage industry grew out of this: 3rd party websites that allowed people to wager their digital property from Valve’s game. Several of these sites were recently issued cease-and-desist letters after one of them was revealed to be promoting itself under false and misleading pretenses on YouTube.

** I looked around, and was surprised that I didn’t find a case, law review article, or law that dove into this issue with more specificity. I suspect that there has been a case about this, or at least an article – I just don’t have access to a law library right now.

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How can we Adjudicate Events Smeared Across Jurisdictions?

Consider this hypothetical scenario: A US doctor monitors a high-tech medical device transmitting data from inside a person visiting the UK. The doctor provides a diagnosis based on the information sent by the device. Is the doctor practicing medicine in the UK? If there is a glitch in the transmission of the data, who is liable: the doctor, the programmer, the UK telecommunications corporation whose hardware carried the data? Furthermore, in which court should the lawsuit be filed? And to extend the issue into pre-emptive policy: should programmers be subject to licensing and regulations if they are writing code for medical devices, airplanes, train switching, or other situations where a programming error can get people killed?

The metaphysical puzzle is this: where do events happen when the event can be broken into segments that happen across jurisdictions? (e.g., If you shoot someone across the border, where does the murder occur?) How can we deal with smeared, liminal events that seem literally “neither here nor there”? This is why metaphysics matters in a world where previous notions of geography, communication, and being are challenged. The technology that forces these questions upon us will arrive sooner than any of us expect and the law, the philosophy underpinning the law, and even the language used to explain that philosophy, will be trying desperately to catch up to our daily life.

Employer Facebook Checks: How the Law Struggles with Culture and Ignores Metaphysics

Question of privacy in cyberspace cover a vast range of applications. One that I find interesting is the use of social media as a tool by potential employers to research prospective employees. This is interesting because it is at an intersection of cultural, technology, law, and metaphysics.

It is increasingly common for employers to check on a prospective employee’s Facebook page (or other social media). I like to use the case study of Stacy Snyder in this NYTonline article: http://goo.gl/bMw0Kl

The issue is that a student-teacher was dismissed over a photo on her MySpace (that dates the example a bit, eh?) that was captioned “Drunken Pirate.” This situation becomes the image of concern: an employer delving into your personal (yet published) photo album to look for objectionable material.

Let me divide up the issues:

1) The legal and/or cultural claim to privacy. Before Facebook or MySpace, it would be extraordinary for an employer to ask to see photos from your latest party as part of the application process (barring government security clearance checks). Although social media has allowed us to share such personal material with a wider range of friends, we are not culturally comfortable simply surrendering previously private/personal material to the entire public sphere.

2) Context is everything. Bill Waterson’s iconic character, the rascally 2nd-grader Calvin, once explained that people are wrong to assert that “photos never lie,” for, in fact, all they do is lie. To illustrate, Calvin clears one area of his room and puts on a tie to have himself photographed as a clean, tidy young boy (he is normally dressed in a t-shirt and has a notoriously messy bedroom). So it may be argued with Facebook photos, Tweets, etc: Can a single snapshot, sentence, or post represent an individual- even partially? Can it be completely incorrect? Without further explanation, how badly can it be misinterpreted? This claim speaks not only to the protection of the poster, but also raises the question of whether investigating an applicant’s social media is truly helpful in obtaining accurate data about the applicant. A related issue here is the notion of Performance Identity online (see: Life on the Screen by Sherry Turkle). Many posts and photos may be uploaded not as a reflection of actual identity, but as an effort to entertain or amuse a particular audience.

3) The Metaphysical puzzles of being and identity over time. One of the core points of the NYTonline article linked above is that the internet makes possible the storage of everything we say or do- FOREVER. One question is whether applicants ought to be judged by high school or college photos or posts. Indeed, the question is founded on an ancient metaphysical quandary: what is the relationship with one’s self over time? We have a cultural concept of “not being the same person” at age 15 as at age 30. Yet right now, many 30 year old job applicants could be in the position to defend the digital traces left by their 15 year old selves.

The final point to note here is that Facebook was not designed to be a massive social media platform through which employers scouted and screened applicants. It was a way for college (and later high school) students to communicate and make limited broadcasts to a select audience. It was a kid’s toy, really. To me, it still is- I think that’s why my generation sometimes feels weird that our parents have Facebook profiles. The platform was never made for “grown-ups” or “grown-up things.” That was an accident, and treating it otherwise is a mistake.

The Metaphysics of the Corporation: A Nexus of Contracts.

The Supreme Court issued a total of 5 writings in Citizen’s United v. Federal Election Commission.  The metaphysical nugget at the heart of this politically charged case was whether corporations (and other legal entities without physical personhood) could claim certain constitutional rights or protections. The outcome, that a corporation could be considered a “person” and so have “free speech rights”, shocked many and was ridiculed somewhat. The core of the joke is obvious: a “corporation” isn’t even close to a “person.”

Corporations cannot be touched. They do not smile, they do not cry. They cannot get a driver’s license. They cannot go for a walk in the park. They are concepts. They exist as legal entities, as shorthand for a set of agreements. They are a nexus of contracts. http://en.wikipedia.org/wiki/Nexus_of_contracts

And yet, corporations can own assets, owe debt, pay taxes, and even die (no one escapes those certainties, right Benny F?).

So the metaphysical puzzle is presented: how do we assess the nature of the corporation’s existence? I’m interested in this question for two reasons: First, I think it is extremely similar to many of the questions of the metaphysics of cyberspace (things that appear to have ontological force without physical presence). Second, corporations and business entities are enormously important in countless ways to the developed world (and, in a different way, important to the developing world). I find it striking the Internet and the Corporation are the two most dominant forces of the 21st century and have (potentially) similar metaphysics. Politicians and jurists need to take questions of metaphysics and ontology seriously as entities and locations of legal importance become less obviously physical. When policies or rulings are handed down without proper reasoning, the door is opened for the kinds of rulings in which a person is prison is not found to be “in custody.” http://verdict.justia.com/2012/03/21/why-interrogation-in-jail-may-not-count-as-custodial-the-supreme-court-makes-new-law-in-howes-v-fields Courts are forced to work backwards from statutes and precedent to the facts before them, and if their starting point is problematic, those problems can be magnified in the court’s efforts to force the square peg (the law without proper basis or explanation) into the round hole (the facts of the case at hand).

The deeper joke is that the word “corporation” comes from Latin word “corpus,” literally meaning “body.” In one sense, the corporation is the joining together of many bodies into one unified body, and yet it has no actual body of its own. Why couldn’t the late-night comedians and pundits glom onto that hilarity? Or at least meet this level of humor:

“Corporation: An ingenious device for obtaining individual profit without individual responsibility.” -Ambrose Bierce

What means “Pataphysique”?

 Pataphysics: that which is above, over, beyond, past, and remaining after metaphysics. Physique: body, corpus, entity. It is a denotation for an avatar: a body that is beyond metaphysics. I probably think too much about screen names, but they fascinated me since I first saw my brother using one. Even as a child, I thought the idea of adopting a name for a particular setting was odd and appealing. As I spent more time thinking about the metaphysical relationship we have with the digital world, I decided that if metaphysics predated the internet, either we needed a new term to describe the metaphysics of the digital world or cyberspace was some kind of quasi-conceivable manifestation of metaphysics. I preferred the former, and (at around the same time) encountered the term “pataphysics.” It seemed to fit because, in my mind, it touched on the important points of thinking about digital space: layers of being, layers of thought, abstractions upon abstractions, connection over (surreal, maybe impossible) distance, and maybe something of the subjective could be fit in there somewhere. It seemed to be loosely structured, ill-defined, and yet somehow ethereal and mystically real. In some way, ‘pataphysics might well be the study of the metaphysics of the internet (for me). My name, then, is the description of a body existing in that space beyond and remaining after metaphysics. It is a being without space; the unextended object, existing nowhere and anywhere, subject to thought and symbol more than geography or time.

Philosophy and the everyday

Philosophy is sometimes disregarded as irrelevant and unimportant in the 21st century. I think this shows a misunderstanding of what philosophy is (maybe even by those who claim to be proficient in it). I chose to study philosophy because it was obvious to me that it was a study of the subjects of our daily conversation. Every argument we have, every thought we think, every decision we make, is filled with issues in metaphysics, epistemology, logic (and mathematics), ethics, aesthetics, and rationality. From sports talk shows (almost exclusively filled with counterfactuals and predictions of decisions) to interior decorating to social gossip, our lives are filled with the very stuff of academic philosophy. It seems that even anthropology does not come so close to the useful study of being human as does philosophy. Yet, in the last 50 or 100 years (or last 2000 years), philosophy became the boring and irrelevant study of stupid questions (“does my hand exist?” or whatever).

Shortly after I started studying philosophy, I found a blog post about the need for philosophy in computer programing languages. http://steve-yegge.blogspot.com/2006/04/software-needs-philosophers.html The author felt that a philosophy could end the fighting and competition between programing languages and thus move the entire technology forward. Notwithstanding the issues with that, he made mention of his view that philosophers pulled society out of the dark ages and into the modern era; releasing them from the bondage of superstitious beliefs and delivering them into the scientific revolution. He noted that after philosophers taught people how to think, people forgot why they needed philosophy.

I am convinced that a return to the value of philosophy (combined with many, many other things) would be greatly beneficial for civilization. I think that a great emphasis on thinking, wonder, creativity, reflection, with a deeper understanding of rules of logic and reason—as well as the ability to properly question such rules—would greatly enhance the political, economic, and social systems of our time. Even arguing about whether philosophy is important is itself a philosophical exercise. Questions about what is and how it ought to be are both questions of philosophy. If there are other sorts of questions, discovering them would also be a philosophical endeavor.