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LEGALITY OF SPOT THE BALL COMPETITIONS

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  • January 12, 2021

LEGALITY OF SPOT THE BALL COMPETITIONS

STB competitions are a product of gamification that cater to all your marketing needs. Gamification is a technique used by designers to weave game elements in non-gaming contexts with the aim to boost user engagement with the product or service in question. Designers seek to tap on the intrinsic drives of users through integrating fun features such as leaderboards, badges, points, and progress bars into systems that may otherwise be boring. This makes them relish in using it more.

Gamification is a meaningful tool to drive user engagement due to several reasons. It is not about modifying user interfaces into games. Instead, it is used to incorporate fun elements in systems that might otherwise lack immediacy for users. If integrated correctly, gamification incentivizes users to complete tasks while simultaneously helping users extinguish any negative experiences that inhibit their interaction with the system or their completion of tasks. What's more, in effective gamification, the dynamics alone serve as enough reason for the users to engage with the system.

Now that you know the gist of gamification and its role in marketing, let's see how all of this comes into play in the context of our Spot the Ball solution.  

Tentacle's STB is a web-based application that is used by varying organizations/businesses that are looking to manage competitions' software efficiently. They use this application to run all types of STB competition software from start to finish. 

Unlike other platforms that run Spot the Ball competitions, Tentacle lets you get creative with your ideas and designs the competition however you want it to be. Meaning, you don't have to stick to the traditional concept of using a football in the game.  It can be rugby, tennis, cricket, basketball, etc.

The ball is erased from the given picture and used for the competition. This is where 'spot the ball' begins. Players, employing their mental skills (strategic thinking/logic abilities/trivia knowledge), are supposed to guess the spot of that ball before being removed from the picture.

Our STB solution has proved its efficiency for running competitions as part of marketing schemes, for it stimulates our core drives.  It challenges the audience, tapping into their competitive streak and creating buzz around an event. The software is carefully designed with elements that trigger user engagement, i.e., tapping on their intrinsic motivations by weaving fun elements like leaderboards or incentivizing them through a reward. In addition, our skilled game, Spot the Ball, is unique. It not only enables players to take control but also has the aspects of relatedness and competence that manipulate users into playing the game. Its elements have been carefully foreseen to ensure that the fun factor and the subject matter (whatever it is) do not overlap and are balanced.

The bottom line is that our spot the ball software has been designed in a manner that covers both aspects- that of enabling users to have fun as well as of achieving the objectives, the real purpose of the design, in order for their projects to turn out successful. At Tentacle, we have upheld the principle of weaving gamification carefully into the system and not inserting it like a mere feature.

The legal aspect: why is it not gambling?

As you probably know by now, our Spot the Ball solution is unique, providing you with autonomy and security. With us designing your competition site, you can rest assured that you are in safe hands, far from getting under the Gambling Commission's radar. 

According to the Gambling Act of 2005, a competition falls under the gambling category, i.e., becomes illegal, if it fails to pass the skill test. For a competition to pass this test, it must have a result that is strongly determined by skill rather than chance. As Spot the Ball is a skilled game (one requiring the use of mental ability/knowledge) and not one of luck, it falls under the category of legal games and can be used to run competitions. Moreover, the organization running the competition must ensure that it has an element of familiarity. Plus, it must be able to stop a considerable number of people who want to take part in doing so or stop a significant number of people who take part in acquiring a prize. As our STB solution fits this criterion, it is rightfully a game of skill. Hence, the competitions based on STB are legitimate.

Further, as STB Competitions are heavily dependent on the employment of skill, knowledge, and judgment, they can operate without being scrutinized through regulatory controls by the Gambling Commission. Spot the ball requires just as much skill as a crossword puzzle that requires you to solve clues to win; hence it is equally legitimate.

How does the judging system work?

With Spot the Ball, everyone who plays is playing to see where the judge will think the ball will be. Not where the original position of the ball was. As the judging is to be done after the competition has ended, everyone has a level playing field, and luck is not a determining factor. Therefore, our version of Spot the Ball is legal.

In STB competitions, judges only add to the legality and keep the Gambling Commission away, making the game fair and straightforward. By including judges, STB is then determined by professional skill VS players' skills- not the skill of players against the chance of guessing at the ball's original spot. Using judges ensures that nobody ever knows about the actual position of the ball. This results in a game that does not allow an unskilled player to have the edge over a skilled player, making the process a legal and audited one.

In conclusion, skill competitions are safe from getting under the Gambling Commission's radar. However, it is crucial to design them so that they do not inadvertently conform to the definition of a lottery.

Regulations on Gaming in the UK

The Gambling Act of 2005 (2005 Act) is the main legislation that applies to both land-based and online gaming in the UK.

The 2005 Act comprises of the following three objectives:

  • Restricting Gambling from being:

    • a cause of criminal activity or disorder;

    • correlated with illegal activity or disorder; or

    • used to sustain crime.

  • Certifying that fair and transparent ways are used to conduct gambling

  • Safeguarding children and other susceptible individuals from being adversely affected or manipulated by gambling.

These are of crucial importance to the regulation of licensed gambling. The Gambling Commission must aim to pursue these objectives at all times and consider these when going through with functions under the jurisdiction of the Gambling Act of 2005. The use of premises for gambling must be permitted if the concerned licensing authority thinks it is in line with the outlined objectives

In July 2011, the government declared that it would make amendments to the Gambling Act 2005, which allowed gambling operators based offshore to have the edge over those remote operators that were based and held licenses in the UK. Before the amendment was put in place, the Act in question gave gambling operators from the European Economic Area, Gibraltar, and some selected "white-listed" dominions to run advertisements for their services in the UK without the requirement of an operating license for the UK or the payment of gaming duty in the UK. However, in the same year, the government decided to change its policy so that it would be in concordance with that of Europe, where online gambling operators were required to hold a local license in order for them to run their operations.  

After a period of consultation with the industry, on 3 December 2012, the UK government passed the Gambling (Advertising and Licensing) Bill, which introduced a structural change, from a point of supply basis to a point of consumption basis, to the critical points through which remote gambling is regulated.

Further, on 14 May 2014, the Gambling (Licensing and Advertising) Act of 2014 received Royal Approval. Set to be enforced from 1 October, it got delayed until 1 November 2014 due to a litigation challenge from the Gibraltar Betting and Gaming Association. Later, all operators running advertisements for gambling services in the UK or making transactions with customers based in the UK were required to hold licenses issued by the gambling commission. A duty was also imposed on all transactions made with customers by remote gambling operators from 1 December 2014 regardless of where they were based.

In addition, after 31 March 2015, all gambling software that was in use by a Commission licensee was required to be produced, supplied, installed, etc., by one who held a license for operating gambling software.  

Gambling Act of 2005: Overview

The 2005 Act comprises of the following parts:

  • Part 1 sheds light on the fundamental concepts and includes the definitions of essential terms.

  • Part 2 interprets the powers and duties of the Gambling Commission.

  • Part 3 is concerned with offenses.

  • Part 4 addresses safeguards employed to protect children and young persons.

  • Parts 5, 6, 7, and 8 address several types of licenses.

In addition, a few other parts deal with certain types of gaming and other matters, for example, advertising. The 2005 Act also applies to all kinds of technologies.

Any competition site that does not fulfill the objectives of the Gambling Act of 2005 cannot operate within the UK. Therefore, it must completely meet the Act's requirements for it not to be considered gambling and to remain free of scrutiny from the Gambling Commission.  Otherwise, the remote operator wishing to run such a site must possess a license for it to operate in the UK.

In spite of the complicated legal rules that apply to online promotional competitions run by businesses, there are many instances of brands running them correctly.  The most important thing to keep in mind, as mentioned before, is not to create a competition that inadvertently falls under the definition of a lottery.

A competition qualifies as a lottery if it has the following three elements:

  • Chance (i.e., pure luck)
  • Prize
  • Consideration

Consideration entails an entrant making a payment for something, buying something, or doing something in return, in the case of a lottery. This is not to be mixed with a competition where those who enter have to be judged or voted for in a given task.

It is often with this idea of consideration that brands miss out on when attempting to generate legal competitions and not a platform for sweepstakes/gambling.

It is imperative to note that necessitating the entrants to do something for you falls under the category of lottery-based consideration. This includes but is not confined to requiring your entrants to "like" or "follow" you on social media, watch a video, fill out a survey, etc.

In order to run a legal competition that does not require a license to operate from the gambling commission, you must make sure that your competition does not contain any of the three elements outlined above. For instance, your competition should purely be based on skill and not allow an unskilled player to have the edge over a skilled player.

International regulations

Without a doubt, online competitions are incredibly useful for marketing purposes. They are one of the best tools to engage customers, increase customer retention, and collect valuable data for buyer personas. But sponsoring such promotional competitions entails the annexation of legal regulations and limitations that can be confounding — or worse. As one of your objectives is to have a good time with your customers and prospective customers, the last thing you wish to do is mess with the law.

Mentioned below are the regulations employed in the United States, European Union, and India on online gambling in the form of lotteries/competitions/sweepstakes, etc.

Laws in the US

The legality of skill-based competitions in the United States is determined at a state level. Businesses must take extensive measures to ensure that their products are in full compliance with all the applicable laws.

For competitions to be legal, they must first.

  1. Be skill-based

  2. Comply with all the requirements outlined in the legislature

According to US law, illegal gambling entails activities where people pay/provide consideration for them to win a prize in a chance-based game in return. Consideration, in this case,  does not have to be in the form of currency; it can be anything of value. If the game in question does not contain the element of consideration, or the game is thought to be a game of skill rather than chance, it would be legitimized in most jurisdictions.  Traditional games of chance are basically lotteries, based heavily on the element of consideration, hence requiring you to purchase a  ticket to match randomly drawn numbers to be eligible for a prize, e.g., money, and craps, where the roll of the dice determines the prize you win. Nevertheless, the bright-line rules of chance-based games become blurry when skill becomes involved. Depending on the state, skill-based games like Spot The Ball do not fall within the scope of state gambling laws. This leaves us with the following question:

How do states distinguish between games of skill and games of chance?

State Tests for Skill-based Games

The dominant factor test, also referred to as the predominance test, has been adopted by most states to evaluate whether a game is skilled or based on chance. Under the predominance test, one must envision a scale with pure chance on one end and pure skill on the other. The evaluation is reasonably straightforward when comparing, for example, games involving the use of dice to chess, but it is the gray zone in between that is challenging. For instance, state jurisdictions have conflicted opinions on whether poker is a skill-based or chance-based game. Poker has prominent skill elements: the ability to read people and tactically bet validates a certain level of skill. Conversely, a game of poker is commenced by the rearranging and dealing of cards, which inculcates an element of randomness that is a key determining factor of games of chance. Therefore, when operating in that grey area, it is crucial to be familiar with how state courts have evaluated similar games in their corresponding jurisdictions.

Other states go with the material element test, which recognizes that the game in question may possibly be one predominantly of skill, but that chance has more than a sheer supplementary effect on the result of the game. This test of the material element can possibly blur the boundaries of legality even more. In New York State, for example, the assembly made an amendment to the Penal Code to describe the act of gambling as "any competition, game, gaming arrangement or gaming device in which the outcome relies in a material degree upon any element of chance, not considering the skill of the contestants to possible determining factor therein." In spite of the the "material degree" verbiage of the law, New York State courts have persisted in referencing and relying on the "dominating element" test established in  1904.

Lastly, a small number of states follow the "any chance" test, which rules that if chance has an effect on the result of a game in any way, it will be deemed illegal gambling.

Further, all competition sites being run by operators are supposed to cover the verbiage outlined in the legislature for them to be legal in the US. This means that the competition sites being run should comply with all the mentioned conditions. Some of these conditions are:

  • Customers should not have to make a purchase

  • The purchase should not improve their chances of winning

  •  The site should be inoperative where banned

  • It should include details about non-monetary consideration

  • The identity of the promoter/host of the competition should be provided

  • The starting/ending dates, time, and time zone, as well as the procedure of entry, should be provided

  • The procedures of entry should be followed with an explanation

  • Requirements for eligibility should be also be given

  • A detailed description of the prize(s) should be given

  • Ther criteria for judging must be unambiguous, and the sponsor of the competition must be able to prove how the winner was chosen in accordance with objective criteria

  • The method employed to select a winner must also be provided (in order to prevent any use of misconduct, it is encouraged that sponsors restrain from determining winners themselves)

Regulations in the EU

As you must have established by now, online competitions, or in fact, any product of gamification is a great marketing tool for purposes of being fun and hence engaging to customers. The internet provides a platform for a multi-jurisdictional approach in the present world, making it easy to reach many prospective customers in the European Union. But organizing promotional competitions in multiple territories presents some legal challenges. Although the entity that runs (online) promotional games/competitions is normally regulated by the law of the state in which that entity is established, other countries' national laws and regulations may equally apply.

The EU does not have sector-specific legislation in the field of gambling services. European Union countries are independent in how they carry out their gambling services. This is on the condition that they conform to the fundamental freedoms outlined under the "Treaty on the Functioning of the EU", as analyzed by Court of Justice of the European Union. The autonomy to offer services or to run a business in another EU country is especially pertinent here.

A few chance-based games, at least, are allowed to be run on the internet by most EU countries. Some countries permit all games, whereas others only permit some types such as betting, poker, or casino games. What more, exploitative systems offering online gambling services have been launched in some European states. These are operated by a state-regulated public operator or by a private operator based on an absolute right. Nevertheless, an increasing number of EU countries have formed licensing systems that let more than one operator provide services on the market. Under EU law, no particular scheme is given preference over the others.

Regulations in India

The 1955 Prize Competition Act and the Public Gambling Act (1867) are the primary regulations that control India's gaming and gambling market.

According to the Supreme Court of India, competition has to be based on a substantial degree of skill in order for it to be free of the stigma of gambling. Therefore, any competition with an outcome that is not determined by a substantial degree upon the use of skill is considered gambling.  However, if the game is skill-based, then it falls outside the jurisdiction of the Prize Competition Act of 1955 and hence does not constitute gambling.

In addition, games based on skill are exempted from most prohibitions set out by Gaming Enactments in India. Therefore, they can be offered at all levels (land-based/digital) without any restrictions and do not require a license to be run, with the exception of the state of Nagaland, where a licensing regime has been enacted to regulate such games. The Indian government has already established some games as games of skill, such as betting on horse racing and rummy.

How not to get in trouble:

One factor that must not be ignored when working with any custom development agency is their credibility and dedication to your cause.  When working with Tentacle, it is almost impossible for you to miss it, for it's manifested in all that we do. Our customer base has grown based on credibility; each project of ours is a testament to that.

We guarantee 100% protection of your data and tailor our competitions accordingly, so no stone is left unturned in living up to our promise. Here's a detailed overview of how Tentacle can help you stay out of trouble with your competition site:

The foremost thing to do is to opt for Terntacle's turnkey solutions, as they will automatically keep you safe from getting under the Gambling Commission's radar. We say this because we are a registered custom-development agency that provides legal and practical solutions to all your marketing needs. 

Now, one question that may have popped in your mind is, "Why particularly use turnkey solutions and not customized ones?". Well, using customized software can allow your businesses to scale effectively. However, this type of software is not fit for all cases. For instance, it is not suitable for when you need to rapidly address your product needs and take it to your clients in no time, i.e., in STB competitions. Therefore, Tentacle offers turnkey software, allowing you to start using it right away instead of building a piece of software for a single marketing campaign.

Moreover, this type of software is preferable over custom software as significant resources must be allocated to the development by the company, which can be costly. Since the software is built to adapt to your business requirements, this increases project costs and timeline. The more time your software takes to develop, the more upfront costs it will incur. Hence, it is crucial to ensure considerable resources available in your business before carrying out customized software development.

After you, as our client, have bought our turnkey software, the remaining process is on us. We will then design your website according to whatever framework you provide. Your job is simply to inform us about what you have in mind, and ours is to bring your ideas to life. Your site will be designed and built by our experts, who will make sure to provide you with unique and innovative solutions. Most importantly, the competition site would be designed in a manner that it is completely legal and does not inadvertently conform to the definition of a lottery. However, the legality is the last thing you need to worry about, for our Spot the Ball turnkey solution is based on skill and hence legal in all jurisdictions, be it the United Kingdom, European Union, or India.

Why is it better than using freelancers? 

Take it from us, the approach outlined above, i.e., using Tentacle's turnkey solutions, is much safer and better than getting help from freelancers. This is because, unlike freelancers and other web design agencies, Tentacle can protect your data through compliance with the General Data Protection Regulation. This is legislation on data protection and privacy. Furthermore, unlike many other platforms, Tentacle does not expose user data to exploitation. At Tentacle, we give paramount importance to providing top-notch security. Therefore, our version of Spot the Ball is much more secure and suitable for coming up with a competition site free of data exploitation risk. We use SSL certificates that are digital certificates that not only provide authentication for a site but also enable an encrypted connection.  Moreover, along with having secure databases, we do not gather or store any transaction data, thus ensuring all the parties' privacy. Furthermore, we make use of the best practices of cybersecurity to protect sites from malicious attacks. Examples include:

  • Making use of HTTP Protocols

  • Updating sites frequently

  • Managing passwords sufficiently

  • Securing personal gadgets

  • Adequate access control mechanisms

  • Altering the default configuration settings

  • Frequently backing up websites

  • Continuous oversight/ monitoring

  • Making use of firewall

  • Developing and maintaining a plan for implementing security measures

Why is it safer than doing it in-house?

Given all the pitfalls of gamification and the myriad of difficulties associated with making the correct use of it, it is extremely hard to design effective Turnkey Software in-house. This, coupled with the complexities regarding the legality, only makes things worse. Hence, it is always better to seek expert help from an organization /agency such as Tentacle, which can keep you safe from all types of worries. We can offer solutions that can boost your customer retention and engagement and help your business reach new heights never accomplished before.

How to get in trouble with the Gambling Commission?

At Tentacle, we give paramount importance to the legality of the solutions we provide, unlike most other platforms. There is a very thin line between games of chance and games of skills, and sometimes it does become challenging to categorize these games. However, with Tentacle, you can rest assured that you are in safe hands, away from the trouble of getting on the Gambling Commission's radar. We recognize games of skill to be different from chance-based games in the following ways:

  • Skilled games have a requirement for a physical or mental ability and a learned aptitude to put a result to fruition. These games usually require the use of knowledge, method, physical coordination, potency, technical expertise, or strategy.

  • Chance based games are such that they have a result intensely subjective to random chance or improbability. Standard randomization devices include but are not limited to dice, playing cards,  balls drawn from a container that are numbered.

Now that you've established the difference between chance-based and skilled games, you must ensure that whatever game you choose to incorporate in your competition site is free of chance and, as mentioned earlier, does not require a purchase. Those games that are not in the skill-based category are obviously vulnerable to scrutiny by the Gambling Commission. Every month, we get many people coming to us because they have received a letter from the Gambling Commission. Once you are under their radar, your site is scrutinized, and you will be told to bring down your site. However, our years of experience and expertise will save you from that trouble.

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