Skill Gaming in the United States 1

Transcription

1 Skill Gaming in the United States 1 By: Dennis M. P. Ehling, Blank Rome LLP June, 2013 Introduction The purpose of document is to explore the legalities of cash-based online gaming in the U.S., focusing on skill tournaments for online and mobile games, then subsequently addressing the ways in which CashPlay.Co is operating their services outside of gambling legislation in the United States. Background Gambling laws in the United States have a long history of development from minimal proscriptions in the 1800 s, to near total prohibitions in the early 1900 s, to the current era of modern licensed gambling businesses which today offer casino gambling (either full table and slot, slot only, or video lottery terminal) in approximately 35 states. In addition, state-sponsored lotteries are currently run by 46 jurisdictions: 43 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Despite the proliferation of legal gambling in the United States, the general legal attitude towards gambling in the U.S. is one of prohibition: i.e. all gambling of any kind is presumptively prohibited (and subject to criminal prosecution) unless specifically authorized by state law. In addition, in the online world away from the bricks-and-mortar gambling hall, only three states currently authorize gambling within their borders over the Internet or other network systems: Delaware, Nevada, and New Jersey. 2 Of these, only Nevada currently allows persons within its borders to gamble online (limited to online poker only); Delaware, which will be a project of the state lottery, has promised to launch online poker later this year; New Jersey is expected to become the first state to legalize full casino-style gambling online in the Fall of In Delaware, only the state lottery is authorized to offer any form of online gambling to persons present in the state. In both Nevada and New Jersey, online gambling can only be offered to persons present in each state by an existing, licensed bricks-and-mortar casino operator who has obtained an additional permit to offer online gambling. Against this backdrop, skill gaming online is developing as a way for operators to offer, and customers to play, games online for a chance to win a prize without violating state gambling laws. Where permitted, and when properly organized and operated, such games can avoid the stigma and legal prohibition of gambling under applicable laws. Although there are certain Federal laws directed toward prohibiting certain forms of gambling across the nation (e.g. 1 This summary is prepared exclusively for the information and purposes of Sugarhill Limited doing business as CashPlay.Co. No other person or entity may rely on the statements or opinions set forth herein without the express written agreement and consent of Blank Rome LLP. 2 Other states, including Illinois and New York, sell traditional state-sponsored lottery tickets online but do not currently permit any other form of gambling online.

2 lotteries not sponsored by the states, sports wagering outside of Nevada and limited other jurisdictions, and sports wagering online), the Federal government historically has left the regulation of gambling are to the individual States. This White Paper explores the legal foundations for skill gaming under relevant Federal and State laws. Federal Laws As noted, gambling in the United States has not historically been extensively regulated by Federal law. In the realm of online gaming, however, there are three Federal laws which do come into play: the Wire Act (18 USC 1084), the Illegal Gambling Businesses Act (18 USC 1955), and the Unlawful Internet Gambling Enforcement Act ( UIGEA, 31 USC ). A. The Wire Act (18 USC 1084) For most of the Internet age, the Wire Act was viewed as the primary law in the United States prohibiting wagering conducted over the Internet. The Wire Act provides, in relevant part: Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assists in the placing of bets or wagers on any sporting event or contest shall be fined under this title or imprisoned not more than two years or both. 18 USC 1084(a). It has long been the view of the United States Department of Justice ( DOJ ) that the Internet is, by definition, a wire communication facility transmitting information in interstate and/or international commerce. What constitutes a bet or wager, however, has not been well defined. Several courts have addressed the question, but it has not been addressed by the United States Supreme Court. In a different context, the US Supreme Court held in 1954 that gambling involved three necessary elements: a prize, awarded by chance, for which players pay some consideration for the chance to win the prize. See F.C.C. v. American Broadcasting Company, 347 U.S. 284, 290 (1954). As will be discussed further below, this prize, chance, and consideration standard is well engrained in United States law and has been long been widely adopted in a variety of state laws and decisions dating back to the 1800 s defining what constitutes gambling or an illegal lottery. One of the earliest federal courts to address the question of what constituted bets or wagers followed a similar reasoning and held that, were the element of chance had been eliminated from determining whether or not the players won the prize, the activity did not involve gambling. U. S. v. Bergland, 209 F.Supp. 547 (E.D.Wis.1962), reversed on other grounds 318 F.2d 159, certiorari denied 84 S.Ct. 129, 375 U.S. 861, 11 L.Ed.2d 88. There, the court examined a scheme where the defendants took wagers on horse races only after knowing the results of the races, and found that since chance was missing by the time the players paid their money, the players were not actually making wagers. The Court of Appeal ultimately reversed that holding, however, finding that for purposes of the Wire Act, the meaning of bets or wagers is not tied to the element of chance. 318 F.2d 159 (7th Cir. 1963).

3 More recently, at least a few courts that have applied a three part test to determine whether consideration paid to play a game constitutes a bet or wager : (i) (ii) (iii) Does the game involve the payment of an unconditional entry fee (that does not make up the purse)? Are prizes guaranteed to be awarded (the size of which is not subject to the number of entrants)? and Is the game operator unable to compete for the prizes? See, e.g., Humphrey v. Viacom, Docket No. 2: (DMC) (D.N.J. June 20, 2007); State v. Am. Holiday Ass n, Inc., 151 Ariz. 312 (Ariz. 1986). If the answer to each of these three questions is yes then, under these holdings, the games are not considered gambling and no bets or wagers are involved. See also Wilson v. Conlin, 3 Ill. App. 517, 519 (Ill. App. Ct. 1878) (no bet or wager where [t]he prize money was to be paid to the successful party, but the amount was certain, and did not depend at all on the number of entrances. Therefore the entrance fee had no direct connection with the payment of the prize money.); Las Vegas Hacienda v. Gibson, 77 Nev. 25, 359 P.2d 85 (1961) (offering prize to winner of competition does not constitute wagering contract if the offeror does not participate in the competition and has no chance of winning the prize). B. Illegal Gambling Business Act (18 USC 1955) The Illegal Gambling Business Act ( IGBA ) establishes as a Federal felony, the conduct, financing, management, supervision, or ownership of all or part of an illegal gambling business. An illegal gambling business under IGBA is defined as a business which: (i) is in violation of the law of the State or political subdivision in which the business is conducted; (ii) involves five or more persons in the financing, management or ownership of the business; and (iii) remains in business for more than 30 days or has a gross revenue of $2,000 in any single day. 3 IGBA does not define any particular gambling conduct which is, per se, illegal. Rather, it merely borrows State gambling laws, turning what might otherwise be a misdemeanor under a given State s laws into a Federal felony. Unless the gaming at issue constitutes gambling in violation of the laws of the State in which the business is conducted, however, IGBA is not relevant. Thus, if a business involves skill-based gaming that does not violate the laws of the States in which people are playing, the business should not be subject to enforcement under IGBA. C. Unlawful Internet Gambling Enforcement Act of 2006 (31 USC ) UIGEA, prohibits any person engaged in the business of betting or wagering (as defined in UIGEA) from knowingly accepting payments in connection with the participation of another person in unlawful Internet gambling. Unlawful Internet gambling is defined by UIGEA as on- 3 IGBA does not apply to any bingo game, lottery, or similar game of chance conducted by certain charitable organizations.

4 line contests which are illegal under any Federal or State law (termed restricted transactions in the Act). UIGEA also requires Treasury and the Federal Reserve Board to promulgate regulations requiring certain participants in payment systems that could be used for unlawful Internet gambling to have policies and procedures reasonably designed to identify and block or otherwise prevent or prohibit the processing of restricted transactions. 4 The Dep t. of Treasury and the Federal Reserve Board have issued a joint final rule, Regulation GG, to implement UIGEA, in which they define unlawful Internet gambling to mean: to place, receive or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal land in which the bet or wager is initiated, received or otherwise made. Significantly, UIGEA does not declare any gaming illegal which was previously legal; nor, however, does it declare legal anything that would otherwise be illegal under another Federal or State law. See 31 USC 5361(b). Similar to IGBA in this respect, UIGEA merely borrows State gambling laws and declares the movement of funds associated with violations of those State gambling laws to be illegal under Federal law. Thus, if the gaming at issue is not a violation of the gambling laws of the State in which it is played, and does not otherwise violate the Wire Act, UIGEA s prohibitions do not apply. Skill-Based Gaming State statutes, like federal statutes, often fail to make clear what constitutes or does not constitute, gambling that is prohibited by those laws. However, many states courts have adopted, or follow the framework set forth above, defining gambling as a contest that involves: (i) a prize for the winner; (ii) chance determines the outcome; and (iii) consideration paid by the participants. See e.g. Morrow v. State, 511 P.2d 127, 128 (Alaska 1973) ( Where the term lottery is not defined by statute, courts generally adopt a definition including three essential elements: consideration, chance, and prize ). If one of those elements is missing, the States generally do not treat the transaction as gambling. See e.g. Cross v. People, 32 P. 821, 822 (Colo. 1893) ( The gratuitous distribution of property by lot or chance, if not resorted to as a device to evade the law, and no consideration is derived, directly or indirectly, from the party receiving the chance, does not constitute the offense. In such case the party receiving the chance is not induced to hazard money with the hope of obtaining a larger value, or to part with his money at all; and the spirit of gambling is in no way cultivated or stimulated, which is the essential evil of lotteries, and which our statute is enacted to prevent. ). 4 The provisions and requirements of UIGEA apply specifically to participants in payment systems (e.g. banks, other financial institutions, card networks, informal payment networks, and the like), and to those involved in the business of betting or wagering who utilize such payment systems to conduct illegal Internet gambling. See 31 USC 5363 (prohibiting the use of payment systems by those involved in the business or betting or wagering), 5364 (requiring participants in payment systems to block financial transactions associated with illegal Internet gambling). UIGEA does not impose any additional requirements on Internet services providers, geo-location vendors, or other vendors providing services to an Internet business unrelated specifically to the movement of funds associated with illegal Internet gambling.

5 As noted at the outset, approximately 35 States currently have some form of legal casinostyle gambling (i.e. gambling against a house ) within their borders, and 43 of the 50 States, plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, all allow some form of State-sponsored lotteries within their borders. In each of these instances, however, legalized gambling is limited to being conducted either (i) by the State itself; (ii) by a limited number of licensed bricks-and-mortar casino properties; or (iii) by tribal governments under a compact with the State in which they are located. All other gambling businesses are explicitly made illegal in those States. Moreover, only three states, Nevada, Delaware, and New Jersey have legalized any form of casino-style gambling over the Internet, and that is limited to the properties authorized to conduct casino gambling in each State (private entities in Nevada and New Jersey, and the State lottery in Delaware). Given the broad prohibition under State laws generally for unlicensed gambling, limitations on anything considered gambling over the Internet, and the impact of IGBA and UIGEA turning State gambling violations into Federal felonies, numerous parties have made efforts to design Internet-based games involving prizes which do not run afoul of State antigambling laws. These efforts generally fall into two categories: free play games and/or sweepstakes that aim to eliminate the element of consideration from the prize, chance, consideration equation; and skill games (sometimes called contests because they involve a defined challenge between two or more players) that aim to eliminate the element of chance from that equation. 5 Across the United States, online skill gaming has developed into several popular market segments, including (i) poker; (ii) fantasy sports; (iii) simulated pool tournaments; (iv) tournaments based on variations of classic board games and versions of casino games enhanced with elements of skill; (v) multi-user tournaments based on popular console and PC games; and (vi) puzzle, trivia, and word contests and other contests and tournaments. Poker and fantasy sports tend to dominate the commercial market in the United States today, but their legality is far from clear. The remaining four market segments generally have far less legal risk because the element of chance is so greatly reduced as a factor in determining the outcome of the game. Poker Online poker is, today, no doubt the single largest form of online gambling taking place in the United States. Outside of Nevada (which has expressly legalized it), the offering of online poker remains at best a legal grey area in the United States. There have been a select few legal opinions which have concluded that poker is a game of skill which is not prohibited under local anti-gambling laws (see e.g. U.S. v. Dicristina, 886 F.Supp.2d 164 (E.D.N.Y. 2012); Gallatin County v. D & R Music Vending, 208 Mont. 138, 141 (1984); Feb. 19, 2009 Slip Op. in Town of Mount Pleasant v. Chimento et al., Case Nos DB et al. (Mt. Pleasant S.C. Munic. Ct.) at 3 ("This Court, based on the above stated facts, finds that Texas Hold-em is a game of skill. The evidence and studies are overwhelming that this is so."); Jan. 14, 2009 Slip Op. in Commonwealth v. Dent et al., Dkt. Nos. 733 and 746 of 5 The parameters of free play or sweepstakes games are beyond the scope of this White Paper.

6 2008 (Columbia Co. Pa. C.C.P.) at 14 (concluding that "Texas Hold em poker is a game where skill predominates over chance"). These decisions have given proponents of poker hope that the game of skill theory could allow poker to be played widely over the Internet. Other courts, however, have reached a different conclusion. See e.g. Joker Club L.L.C. v. Hardin, 643 S.E.2d 626, (N.C. Ct. App. 2007) (concluding that because chance predominates over skill in the game of poker, poker is a game of chance); U.S. v. Hsieh F.Supp.2d, 2013 WL *7-8 (D. Guam April 12, 2013) (rejecting Dicristina and finding that poker is gambling under IGBA). In addition, some States (e.g. Ohio) have expressly defined poker as a game of chance. Moreover, the DOJ has taken aggressive action against numerous entities involved in online poker, including the now famous Black Friday siege of the Internet domains of Full Tilt Poker, PokerStars, and Absolute Poker on April 15, 2011, based on indictments brought under IGBA, UIGEA, and various New York state law theories. These actions have cast very substantial doubt over whether the skill element of poker would be sufficient to exempt Internet poker offerings from the general prohibitions on Internet gambling. Fantasy Sports A. The Wire Act Applies Only to Sports Betting The Wire Act is not clear, on its face, as to what constitutes a contest. For many years, the DOJ argued that a contest could include any game of any kind on which bets or wagers might be placed. However, on December 23, 2011, the DOJ released a letter opinion stating its conclusion that the Wire Act is limited only to sports betting. See Whether Proposals By Illinois And New York To Use The Internet And Out-Of-State Transaction Processors To Sell Lottery Tickets To In-State Adults Violate The Wire Act, Memorandum Opinion, United States Department of Justice, Office of Legal Counsel, released December 23, 2011 ( December 23 rd Opinion ). B. Fantasy Sports Despite the substantial narrowing of its position on the scope of the Wire Act in the December 23 rd Opinion, the DOJ has not quite signaled an all clear for Internet games other than wagering on actual live sporting events. In particular, the DOJ has not made clear its position on whether or not the Wire Act would apply to fantasy sports. Although it has not been addressed by the DOJ, the argument that fantasy sports are games of skill, not chance, which would not constitute gambling prohibited by the Wire Act, finds some support in at least one United States District Court case in which the court explained, in dicta, that fantasy sports involve skill. See Humphrey v. Viacom, No (DMC), 2007 WL , at *3 (D.N.J. June 20, 2007). That decision remains a largely isolated one to date, however, and there is no certainty that any other court would follow the same reasoning. C. Fantasy Sports Under IGBA As discussed above, IGBA criminalizes under Federal law and gaming which constitutes illegal gambling under State law. Thus, to the extent that fantasy sports may violate the laws

7 of any given State, there is a substantial risk that offering fantasy sports games over the Internet to customers in that State could trigger the application of IGBA. As noted, at least one court addressing the question has held that fantasy sports leagues hosted on the Internet do not violate local gambling laws. See Humphrey v. Viacom, Inc., 2007 WL , at*l. Likewise, at least one State has expressly authorized fantasy sports as an exception under its gambling laws. See e.g., Mont. Code Ann (2010) (permitting under gambling law certain fantasy sports games). Other decisions and published opinions of State Attorneys General (particularly in Florida and Louisiana) take a more cautious approach. See e.g. Fla. Op. Att'y Gen , available at 1991 WL ; La. Op. Att'y Gen (1991), available at 1991 WL Similar broad statements of illegality have been published by the Arizona and Kansas gaming regulators. Thus, although fantasy sports leagues have become popular in many segments of the country, there can be no guarantee that these leagues will not suffer legal setbacks in the future. At least one plaintiff is currently challenging the legality of popular fantasy sports leagues under Illinois and Federal law. It is not clear when or how those cases will be determined. D. Fantasy Sports under the UIGEA 6 UIGEA specifically exempts from its definition of bet or wager : any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization, which meet certain conditions. 31 USC 5362(1)(E)(ix). Those conditions combine three-part test for whether game play involves a bet or wager in Humphrey v. Viacom, supra, and State v. Am. Holiday Ass n, Inc., supra, with the concept of skill gaming : (i) (ii) (iii) All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants. All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events. No winning outcome is based (a) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or (b) solely on any single performance of an individual athlete in any single real-world sporting or other event. 6 As discussed above, UIGEA does not make legal any conduct that is otherwise illegal under any federal or state law. Although UIGEA includes a fantasy sport carve-out, it does not make legal gambling on fantasy sports if such contests are otherwise deemed illegal under the Wire Act, the IGBA, or any other state or federal law.

8 31 USC 5362(1)(E)(ix). Games which meet this definition will be exempt from enforcement under UIGEA. E. Betting virtual currency UIGEA also exempts from its definition of bet or wager 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. 31 USC 5362(1)(E)(viii). Thus, games involving play with virtual currency granted free of charge should also be exempt from enforcement under UIGEA. 7 State Law Overview on Broader Skill Gaming A number of State s courts have also addressed whether the fact that skill affects the outcome of the contest removes that contest from regulation under that state s anti-gambling laws. In evaluating whether the degree of skill involved in affecting the outcome of a contest is sufficient to avoid violation of a state s gambling laws state courts typically use three approaches: (i) whether skill or chance is the dominant factor in the outcome ( Dominant Factor Test ); (ii) whether chance is a material element in the outcome ( Material Element Test ); or (iii) whether any chance at all is involved ( Any Chance Test ). The Dominant Factor test generally inquires whether the outcome of the game is determined more by the participants relative skill (i.e. which of the participants is better skilled at performing the tasks required to win the game?) than by chance (i.e. random events (e.g. which particular card in a deck of cards turns up, or other events determined by a random number generator) have relatively little impact on the outcome of the game). The operative question is whether chance or skill is the dominant or controlling factor in determining the outcome of the game. See e.g. National Football League v. Governor of Delaware, 435 F. Supp (D. Del. 1977) (lottery encompasses not only games of pure chance but games where chance is the dominant determining factor); see also Joker Club L.L.C. v. Hardin, supra, 643 S.E.2d at 629 (noting that the length of a game is also an important issue in poker, as in the short term the game is primarily one of chance, whereas in the long term skill does seem to predominate). The Material Element test looks to understand whether chance plays any significant role in determining the outcome of the game. It is not relevant under those States laws whether skill plays a significant, or even dominant, role in determining the outcome. If chance plays a meaningful role, the game play is considered gambling. See e.g. Alaska s definition of game of chance which means a contest, game, gaming scheme, or gaming device in which the outcome depends in a material degree upon an element of chance, not withstanding that the skill of the 7 As noted above, the UIGEA does not make any conduct legal which is otherwise illegal. Thus, if betting with virtual currency is illegal under any other state or federal law, the UIGEA exemption for play involving virtual currency would not override such other laws and render such play legal.

9 contestants may also be a factor. Alaska Statutes (1). Similar statutes have been enacted in Hawaii, Iowa, Missouri, New York, Oregon and Washington. The Any Chance test simply looks to see if chance plays any role whatsoever in determining the outcome of the game. See e.g. State v. Torres, 831 S.W.2d 903,905 (Ark. 1992); Maine Rev.Stat. tit. 17-A, 952(3), tit. 17, 330(2) ( Game of chance means any game, contest, scheme or device in which: A. A person stakes or risks something of value for the opportunity to win something of value; B. The rules of operation or play require an event the result of which is determined by chance, outside the control of the contestant or participant; and C. Chance enters as an element that influences the outcome in manner that cannot be eliminated through the application of skill. ) Without walking through in detail the specific laws and decisional authority in each State, it appears that States that follow the Dominant Factor Test include: Alabama, Alaska, California, Connecticut, Delaware, Indiana 8, Massachusetts, Michigan, Mississippi, Montana, New Jersey, New Mexico 9, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Utah, West Virginia, Wyoming. It appears that states that follow the Material Element Test include: Hawaii, Iowa 10, Minnesota, Missouri, New York, Oregon, and Washington. It appears that states that follow the Any Chance Test include: Arkansas, Colorado, Florida, Georgia, Idaho 11, Louisiana 12, Maine, Nebraska 13, New Hampshire 14, South Carolina, Tennessee, Vermont, Virginia, Texas 15, and Wisconsin. There is no decisional authority addressing which test, if any, would apply in the following states or territories: District of Columbia, Kansas, Kentucky, and Maryland. Gambling is explicitly prohibited, regardless of 8 skill, Indiana s general gambling prohibition excludes from the definition of gambling a bona fide contest of 9 New Mexico s anti-gambling law discusses whether the outcome of an event is determined by chance, even though accompanied by some skill. 10 The Iowa the statute defining lottery identifies any process where a prize is awarded by chance or any process involving a substantial element of chance as a lottery subject to the State s general anti-gambling prohibitions. 11 Idaho statutes defined Gambling as risking any money credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance, the operation of a gambling device or the happening or outcome of an event, including a sporting event, Idaho Statutes Louisiana s anti-gambling statute broadly criminalizes contests that involve risk[] the loss of anything of value in order to realize a profit. 13 Gambling is defined under Nebraska law as a contest in which the outcome is determined by an element of chance. 14 Lotteries are defined under New Hampshire Law as inducing participation, in whole or in part by the hope of gain by luck or chance. 15 Under Texas law, a game is gambling if chance affects the winning outcome, even if skill predominates, so long as skill does not eliminate the impact of chance. See State of Texas v. G,mbling Device, 859 SW2d 519, (Tx. App. 1993).

10 any element of skill, in the following States (the Absolute Prohibition States): Arizona (definition of gambling includes that it involves a game or contest of chance or skill ) and Illinois (gambling defined as a playing a game of chance or skill for money ). In states that follow the Dominant Factor Test and the Material Element Test, prizes given for games involving an entry fee should be permissible on contests in which the outcome is determined overwhelmingly by the skill of the participants. States invoking the Any Chance Test and the Absolute Prohibition States would not appear amenable to most games of skill in which an entry fee is paid and prizes are awarded. In addition to the foregoing, there are certain states that put a special limit on the payment of entry fees for skill-based contests. Of particular significance, Connecticut does not allow the promotion of a game of skill involving a cash entry fee where the prize to be awarded is greater than $200, and Vermont prohibits the offering of any game of skill where there is any form of entry fee, service charge, purchase, or similar consideration required in order to enter or remain eligible. While not including such explicit restrictions, North Dakota and Maryland arguably could be said to prohibit the offering of games where persons compete for, or are eligible for, prizes if the persons are required to pay an entry fee or other consideration for the right to participate. CashPlay.Co Skill Games With this substantial background, it becomes apparent that CashPlay.Co s games of skill fill a unique position in the legal landscape. This position places CashPlay.Co in a strong legal position in the majority of jurisdictions in the United States. As an initial matter, as they have been outlined to us, CashPlay.Co s games of skill satisfy all three elements of the Humphrey test outlining when game play does not involve the placement of a bet or wager. Under the platform requirements for games to be hosted on the CashPlay.Co platform: (1) to the extent any game involves the payment of any fee (or consideration ) by any contestant, the game must involve the payment of an unconditional entry fee (that does not make up the purse) from all contestants for the opportunity to compete in the contest; (2) to the extent that any game involved the potential for any contestants to win a prize through their play, the prizes are guaranteed to be awarded to at least one of the contestants of each game (and the size of the prize is predetermined and not subject to the number of participants in the game); and (3) if a prize is offered, the game operator is unable to compete for the prizes (i.e., e.g. contestants play against each other alone, not a house ; contestants need not achieve some pre-determined score to win the prize; and the operator cannot participate and/or win the prize by besting the other contestant(s) without contributing the same unconditional entry fee). Likewise, although CashPlay.Co s games of skill are designed to occupy a different segment of the marketplace than traditional fantasy sports games, the games meeting the requirements to be hosted on CashPlay.Co s platform that have been shared with us would also generally satisfy all of the requirements to be termed a fantasy sports game under UIGEA: (1) the games may involve simulated sports play (sometimes defined as electronic sports or e-sports gaming); (2) the prizes and awards, if any, offered to winning participants are established and