Legal Opinion - Grand Vault Casino

April 3, 2025

RE: Legal opinion on sweepstakes casino-style games in the United States.

To whom it may concern:

This document is a written legal opinion (“Opinion”) from the undersigned qualified outside legal counsel (the “Firm”) regarding National Sweepstakes Group LLC (“Developer”) and the sweep stakes casino-style games that Developer offers in the United States through its dual-coin/dual platform system Grand Vault Casino (the “Platform”) as explained in more detail below. The Platform consists of two separate and independent gameplay formats: The virtual token/social casino format via “Gold Coin Games,” and the sweepstakes/promotional format via “Sweeps Coin Games.” Collectively, the Gold Coin Games and Sweeps Coin Games are referred to as “Games.”

The Gold Coin Games are played with a virtual token called “Gold Coins” where the players can only win additional Gold Coins, which then be used to play more Gold Coin Games for entertain ment. The Gold Coins cannot be redeemed or exchanged for anything of tangible or real world value. Nor can the Gold Coins be transferred to other players. Players are given a number of Gold Coins at initial signup and thereafter may obtain additional Gold Coins through periodic distributions, an auto-replenishment feature that credits the account automatically upon hitting a certain low amount, or by purchasing Gold Coin packages from the Developer. The Sweeps Coins and the Sweeps Coin Games function as a promotional mechanism for the Gold Coin Games, to pro mote and incentivize additional Gold Coin package purchases.

The Sweeps Coin Games are played with “Sweeps Coins,” which are promotional awards given to players as a free gift with a purchase of additional Gold Coins, through various free, alternative methods of entry (including mailing a postcard), and through simply accessing the Platform as a daily login reward. While Sweepstakes Coins cannot be purchased from the Developer or any other third party, they can be used to enter into various games of chance on the Platform where the players may win real-world prizes in the form of redeemable Sweeps Coins.

This Opinion has been created at the request of the Developer, and the Firm understands that the is being submitted to third parties involved with payment processing. Each such party is permit ted to review and rely upon this legal opinion in the application of Developer for payment processing services. By authorizing sharing and reliance, the Firm expressly states that it represents the Developer only and not any third party, each of which are urged to retain their own counsel in any review of this Opinion and before making any decisions based thereon. The purpose of this Opinion is limited to assisting such third parties in determining whether or not to offer payment processing services to the Developer, and for conducting due diligence to inform their business activities.

For the purposes of third-party reliance and this Opinion, the undersigned attorney represents and warrants that this Opinion was prepared independently, without any input or influence from the Developer, other than the representations about the Platform on the Officer Certificate attached as Exhibit A. The legal research and conclusions about the legality of the Platform under various laws is based on the Firm’s independent and objective legal research. Further, neither the Firm nor the undersigned attorney are aware of any conflicts of interest that impact the objectivity of the analysis in this Opinion. This Opinion and the services rendered to the Developer in relation to the Opinion have been and are consistent with all applicable Rules of Professional Conduct, including the conflict of interest rules, which govern the practice of law.

Based on this Firm’s review of applicable laws, and subject to the representations and assumptions set forth below, it is the Firm’s opinion that the Developer operates consistent with the legal re quirements of the jurisdictions where its Games are offered. Further, it is the opinion of this Firm that a court having competent jurisdiction, presented with a full record and arguments advanced by qualified counsel, should reach the same conclusions regarding the legality of the Games and the Developer’s operations without a gambling or other gaming license.

Section 1 sets forth a state-by-state analysis for the Developer’s sweepstakes free-entry casino game offerings. As to the states listed in Section 1, the Firm opines that the Developer may offer the sweepstakes free-entry gaming product there.

Section 2 sets forth a state-by-state analysis of the Developer’s social casino feature; specifically addressing whether the purchase of Gold Coins (which are not exchangeable or redeemable for anything of real value) constitute “something of value” for the purposes of the “prize” element in the three-element consideration, chance, and prize definition of “gambling.”

For the reasons set forth in those sections, it is the Firm’s opinion that the Games may be offered legally in the states listed in Sections 1 and 2, and that a court having competent jurisdiction, presented with a full record and arguments advanced by qualified counsel, should reach the same conclusions

The Developer will not be offering its Games (either Sweeps Coin or Gold Coin) in the states listed below:

1. Alabama

2. Alaska

3. Connecticut

4. Delaware

5. Idaho

6. Kentucky

7. Maryland

8. Michigan

9. Mississippi

10. Montana

11. Nebraska

12. New Jersey

13. New York

14. North Dakota

15. Nevada

16. Ohio

17. Tennessee

18. Washington

As to these 18 states, the Firm could not reach a conclusion as to the legality of the Platform at this time, but expressly reserves the right to reevaluate and revisit the legality of the Platform in these states. Further, given pending sweepstakes regulations and legislation in a number of states, the environment remains dynamic and this Opinion may be subject to revision based on future development.

Section 3 addresses the applicability of the Equal Dignity Principle to Developer’s sweepstakes games; specifically the adequacy of the free Alternative Method of Entry (“AMOE”).

Developer Representations and the Firm’s Reliance

The Opinion is accompanied by an officer’s certificate as Exhibit A. The officer’s certificate at tests to the facts about the Games by one of the Developer’s senior officers. The Firm expressly relies on the truth of the certified facts in rendering this Opinion. In the event any of the repre sentations are untrue or inaccurate, this Opinion may no longer be valid.

Legal analysis

Introduction

The Platform a unique model of online gaming that offers an entertainment-only “social casino” experience where players use virtual Gold Coins to play casino-style games of chance. Winning outcomes award additional Gold Coins, which can only be used for additional gameplay. Gold Coins are initially allocated to a player’s account. Additional Gold Coins are awarded periodically upon login or upon the balance hitting a pre-set “minimal balance” threshold. Thus, players can play the Gold Coin Games entirely for free and without any purchase. If a player so chooses, they may also purchase Gold Coin packages from the Developer. The Sweeps Coins are a promotional mechanism to incentivize players to purchase Gold Coin packages – with each such purchase, players receive Sweeps Coins, which can be used to enter games of chance and potentially win real-world rewards. Sweeps Coins may also be obtained through periodic logins and other free alternative entry methods, such as mailing in a post card.

Ample legal authority supports using no-purchase-necessary sweepstakes to promote and incentivize purchasing products and services.

One of the first court cases to recognize and support this promotional scheme was Montana’s State v. Cox, 349 P.2d 104, 106 (Mont. 1960). The key to the court’s holding was the requirement of a purchase for a chance to win. The Court concluded that the scheme required a payment of some thing of value, threatening participants with impoverishment. Cox at 106-07. Similarly, the Cali fornia Gasoline Retailers v. Regal Petroleum Corp. decision concluded that the option to enter for “free” rendered a promotion without consideration (despite the alternative option to pay to play). 330 P.2d 778, 782, 789 (Cal. 1958).

In an opinion of the Kentucky Attorney General from 1981, the Attorney General explained:

[T]he mere fact that some of the participants in a promotional scheme in fact make purchases of the sponsor’s products does not, in and of itself, constitute consideration supporting a lottery, where chances to participate in the scheme are also freely given away on a reasonably equal basis without respect to the purchase of merchandise. These schemes, known as “flexible participation” schemes, are not to be confused with “closed participation” gift enterprise schemes, which are open only to patrons purchasing goods, services or whatever the promoter is trying to push by the scheme.

Ky. Op. Att’y Gen., 81-259, 2-799, 2-801 (1981).

Further, the AMOE model is based on the Economic Value Test, where the consideration paid for by the entrant must have some sort of economic value. In Cudd v. Aschenbrenner, the Supreme Court of Oregon validated a grocery store’s promotional scheme that required that participants: (1) go to the store and submit a card with their personal information; (2) validate a coupon while in store; and (3) be present in the store parking lot when the drawing was taking place. 377 P.2d 150, 151-52 (Or. 1962). In Cudd, the key conclusion was that there was no obligation to make a purchase in order to participate – thus, there was no consideration for the purposes of the lottery analysis. Id. at 156-57. The Court further explained that in prohibiting lotteries, the legislature intended participants to give up something of economic value to participate. Id. at 155. Specifically, “lottery is a special kind of contract which requires a special kind of consideration – consid eration which can impoverish the individual who parts with it.” Id.

Further, it is well-established that no consideration is present if participant has to pay for a postage stamp and mail in an entry. See, e.g., Haskell v. Time, Inc., 857 F. Supp. 1392, 1404 (E.D. Cal. 1994). (“Plaintiff concedes that no purchase is required to enter defendants’ sweepstakes, but in stead asserts that the payment of twenty-nine cents postage is ‘valuable consideration.’ This asser tion is untenable. The California Supreme Court has held that a requirement that a sweepstakes entrant deposit the entry form at the sponsor’s place of business is not ‘valuable consideration’ sufficient to state a cause of action under California law. California Gas Retailers v. Regal Petro leum Corp., 50 Cal.2d 844, 861-62, 330 P.2d 778 (1958). The time, energy, and expense required under those rules exceeds the twenty-nine cents required here. Thus, plaintiff’s claim that the sweepstakes themselves amount to illegal lotteries or contests is dismissed since the definitions of both “contest” and “lottery” require the payment of consideration.”).

The Federal Government has adopted the “no purchase necessary” Economic Value Test as part of the Deceptive Mail Prevention and Enforcement Act, 39 U.S.C. § 3001(k):

[E]ntry materials for a sweepstakes or a promotion that purports to be a sweepstakes; and . . . does not contain a statement that discloses in the mailing, in the rules, and on the order or entry form, that no purchase is necessary to enter such sweepstakes [“is nonmailable matter, shall not be carried or delivered by mail, and shall be disposed of as the Postal Service directs.”]

39 U.S.C. § 3001(k)(2), (k)(3)(A)(i)—(ii).

The common law definition of gambling requires three elements to be present: (1) consideration; (2) prize of value; and (3) chance. 38 Am. Jur. 2d Gambling 2; see also Sniezek v. Colorado Dept. of Revenue, 113 P.3d 1280 (Colo. App. 2005); Veterans of Foreign Wars Post 6477 v. Missouri Gaming Com’n, 260 S.W.3d 388 (Mo. Ct. App. W.D. 2008).

The social casino component avoids the “prize” element by only awarding additional in-game currency. The majority of the states do not consider the continued entertainment provided by ad ditional in-game currency as “something of value” for the purposes of the gambling legal analysis. As confirmed in the Officer’s Certificate attached as Exhibit A, the social casino side acts as the primary business of the Developer, as players can only purchase Gold Coins to be used for entertainment (as opposed to any sort of real-money gaming). The Sweepstakes Coins thus are used for promotional purposes – to incentivize the purchase of Gold Coins.

In summary, the sweepstakes side eliminates the “consideration” element because the sweepstakes coins cannot be purchased. By awarding free Sweeps Coins for promotional purposes, the Devel oper’s Games do not contain the “consideration” element. Prize and chance without consideration (i.e. for free) is the traditional sweepstakes “no purchase necessary” model that is legal and unreg ulated in the majority of the United States.

Similar sweepstakes casino operators (utilizing the dual-coin model) are operating as follows: Chumba operates in all states except for Connecticut, Idaho, Michigan, Montana, and Washington.

Pulsz operates in all states except for Alabama, Idaho, Michigan, Montana, Nevada, Tennessee, and Washington.

Stake.us operates in all states except for Washington, New York, Nevada, Idaho, Kentucky, Michigan, and Vermont.

Legendz operates in all states except for Washington, Michigan, Nevada, Nebraska, Ohio, North Dakota, and Idaho.

Clearly, the lack of uniformity between these platforms demonstrates the unsettled nature of this business model and space. Accordingly, while the social/sweepstakes casino model is generally permissible, the space is constantly changing due to the evolving regulatory landscape, as well as various actions by state regulators.

Recently, several states (Maryland, New Jersey, and New York) have introduced legislation that would prohibit the social sweepstakes model as offered by the Developer. While these bills are not law until passed by both chambers of the legislatures and signed by the Governor, the Firm is excluding these states from its legal analysis below due to the high risk of adverse enforcement actions from these particular states.

Applicable Federal and State Law

Federal Law

In general, federal anti-gambling laws do not prohibit, license, or otherwise regulate sweepstakes games. Federal law targets “gambling,” as defined under state law, which generally requires the payment of consideration. The payment of “consideration” is absent from the sweepstakes casino model, as Sweep Coins are awarded for free (as a gift with a purchase of gold coins or through alternative methods of entry). In other words, federal law defers to the state laws on the defini tion of “gambling” – and whether an activity is considered “gambling” or not, due to the absence of consideration or prize elements.

1. Unlawful Internet Gambling Enforcement Act of 2006, 31 U.S.C. § 5363 (the “UIGEA”)

By its very name, the UIGEA applies only to “unlawful internet gambling.” The Games are not unlawful because the Games are offered only in the states where this Firm determined the Games comply with all legal requirements. In sweepstakes mode, the Games are not gambling and do not involve gambling because players do not wager anything of value in exchange for a chance

to win a prize. In the social casino mode, players receive Gold Coins for free; and further, the additional Gold Coins that are won are not prizes of value in the states where the social casino fea ture is offered.

Notwithstanding this common-sense analysis, the text of the UIGEA itself supports the conclusion that it neither prohibits or otherwise regulates the Games. Generally, the UIGEA prohibits a “person engaged in the business of betting or wagering” from knowingly accepting financial transactions “in connection with the participation of another person in unlawful Internet gam bling.” 31 U.S.C. § 5363. Under the UIGEA, to “bet or wager” means “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…” 31 U.S.C. § 5362(1)(A) (emphasis added). The Games do not involve bet ting or wagering because (1) there is no stake on a contest of others – the players only pay an en try fee to participate in a game themselves; (2) the Games are not a sporting event; and (3) the games do not involve “staking or risking…something of value.” The states where the Games are offered do not consider virtual Gold Coins to be “something of value.” Moreover, UIGEA carves out an exception from the term “bet or wager” for “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 U.S.C. § 5362(1)(E)(viii). Based on the foregoing, there is no “bet or wager” and the UIGEA does not apply.

However, even if the Games involved a “bet or wager,” the Games do not meet the second part of the prohibition in § 5363 because they do not involve the “participation of another person in unlawful Internet gambling.” The term “unlawful Internet gambling” means “to place, receive, or otherwise knowingly transmit a bet or wager…where such bet or wager is unlawful under any ap plicable Federal or State law in the State…in which the bet or wager is initiated, received, or otherwise made.” 31 U.S.C. § 5362(10)(A). As explained in more detail below, sweepstakes are not unlawful in a majority of states. Further, no Federal law prohibits sweepstakes games.

2. Federal Wire Act of 1961, 18 U.S.C. § 1084 (the “Wire Act”)

The Wire Act was enacted to prohibit illegal sports books from accepting bets. See New Hamp shire Lottery Comm’n v. Barr, 386 F. Supp. 3d 132, 157 (D.N.H. 2019) (“NHLC”) (holding that prohibitions under the Wire Act apply only to bets or wagers on a sporting event or contest) (pending appeal). Specifically, the Wire Act targets gambling operators, but not the gamblers themselves.

The Wire Act prohibits the use of a “wire communication facility” (which now includes the Internet) to transmit “bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest” 18 U.S.C. § 1084(a).

The Wire Act does not define “bets or wagers.” In 2011, the Department of Justice issued an opinion concluding that the Wire Act’s prohibition applied only to “sports gambling” and did not apply to state lotteries. 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, 35 Op. O.L.C. __ (2011) (“2011 Opinion”). The 2011 Opinion did not address the meaning of “betting or wagering.” In 2018, the Department of Justice revisited the interpretation of the Wire Act and reversed course, concluding that the Wire Act is not limited to sports gambling and applies to “non-sports related betting or wagering.” Reconsidering Whether the Wire Act Applies to Non-Sports Gambling, slip op. at *11–*14, *23, 2018 WL 7080165, (Nov. 2, 2018) (“2018 Opinion”). The 2018 opinion did not address the meaning of “betting or wagering.” Notwith standing the 2018 opinion, states continue to offer intra-state online lotteries and have expanded online casino-style gambling. Recently, the 1st Circuit Court of Appeals affirmed the New Hampshire District Court’s determination that despite the 2018 Opinion, the 2011 Opinion is correct and the Wire Act only applies to sports gambling. New Hampshire Lottery Comm’n v. Rosen, No. 19-1835, 2021 WL 191771, at *1 (1st Cir. Jan. 20, 2021).

The Games do not involve any “betting” or “wagering” activities under the Wire Act. The participants playing the Games are not “betting” or “wagering” on the outcome of any sporting event.

3. International Travel Act of 1961, 18 U.S.C. § 1952 (the “Travel Act”)

The Travel Act is part of the federal anti-racketeering laws. It broadly criminalizes traveling, using interstate mail, or any facility in interstate or foreign commerce to carry on any “unlawful activity.” 18 U.S.C. § 1952(a). The term “unlawful activity” includes any “business enterprise involving gambling.” 18 U.S.C. § 1952(b). The term “gambling” is not defined in the Travel Act. This is because to violate the Travel Act, a person must be conducting an illegal activity in one state and travel in interstate commerce to further such activity. See Rewis v. United States, 401 U.S. 808 (1971). Stated differently, unlawful activity must be “in violation of the laws of the State in which [they are] committed or of the United States.” Id. Thus, the question of whether the Games violate the Travel Act depends on the legality of the Games under applicable state law (as well as applicable federal law).

As evaluated in the state-by-state analysis below, the Games comply with the laws of the states where they are offered. Based on the Firm’s survey of applicable federal laws, the Games also are not in violation of any federal laws.

4. The Illegal Gambling Business Act, 18 U.S.C. § 1955 (the “IGBA”)

Like the Travel Act, the IGBA is a part of the federal anti-racketeering laws. The IGBA specifically prohibits conducting, financing, or owning an “illegal gambling business.” 18 U.S.C. § 1955(a). The term “illegal gambling business” is defined as a “gambling business” that is “a violation of the law of a State…in which it is conducted.” 18 U.S.C. § 1955(b)(1)(i). The term “gam bling includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.” 18 U.S.C. § 1955(b)(4).

Even if the Games were “gambling” under the federal definition in the IGBA, the states where the Developer offers them do not prohibit those sweepstakes games. Where there is no “violation of the law of a State…in which it is conducted,” there is no “illegal gambling business,” and no violation of the IGBA. The Firm is of the opinion that a court of proper jurisdiction, presented with a full evidentiary record and argument advanced by qualified counsel, should reach the same conclusion.

The Firm was unable to find any case law or any other authority that supports the application of the IGBA to the Games that are otherwise legal under state law.

Pending State Legislation

Several state legislatures are currently considering bills that would regulate or prohibit sweep stakes games of the type currently offered by the Developer.

As of the date of this Opinion, certain states have bills related to sweepstakes gaming pending in the respective state legislatures. Bills however are not law until passed in accordance with the relevant legislature’s rules and signed into law by the Governor of the relevant state.

Further, the need for express laws suggests that the current laws of the states with the pending legislation do not prohibit sweepstakes. For example, Michigan sent cease-and-desist letters to several sweepstakes gaming providers under its existing laws. https://www.michi gan.gov/mgcb/news/2024/01/18/mgcb-sends-cease-and-desist-letters.

Accordingly, while the Firm acknowledges the existence of bills in the state legislatures related to sweepstakes, the Firm notes that these bills are not law until passed and signed by the Gover nor. The legal analysis in this Opinion evaluates the existing laws of the states, and cannot speculate about the status of potential legislation that may not be enacted, and even if enacted, could face material amendment.

The Firm further notes the dynamic nature of the pending legislation, and strongly encourages the Developer, as well as any third parties in receipt of this Opinion, to ensure that they are up to date on the latest legislative actions after the effective date of this Opinion and reevaluate the le gal analysis in light of any future laws passed after the date of this Opinion. In other words, this Opinion cannot (and does not purport to) be forward-looking and anticipate unknown legislative developments in the future, and should be treated accordingly.

The 9th Circuit’s Decision in Kater v. Churchill Downs 886 F.3d 784 (9th Cir. 2018)

As part of this Opinion’s analysis of state laws and the Platform’s legality, it is prudent to ad dress the Ninth Circuit’s decision in Kater v. Churchill Downs Inc., 886 F.3d 784 (9th Cir. 2018), which evaluated Big Fish Casino’s social gaming application and concluded that the virtual currency won by the players was “something of value” for the purposes of Washington’s definition of “gambling. Kater is additionally relevant because several states define “something of value” for the purposes of “gambling” the same way as Washington. Thus, although the 9^th Circuit’s rulings have limited persuasive value outside of the 9^thCircuit, Kater is still worthy of discussion for the sake of a complete analysis.

Nevertheless, Kater is factually and legally distinguishable from the Platform and Games, and does not apply. Also, as of the date of this Opinion, no regulatory agency (including the Washington State Gambling Commission) has issued any adverse enforcement action or formal opinion concluding that social casino games (like the Gold Coin Games offered by the Developer) are unlawful based on Kater or on any other case, statute, or other authority.

A. Overview of Kater and State of Washington Law

Kater addressed the laws of Washington State, where “gambling” is defined as “staking or risking something of value upon the outcome of a contest of chance… upon an agreement or under standing that the person or someone else will receive something of value in the event of a certain outcome.” Wash. Rev. Code Ann. § 9.46.0237 (emphasis added). Washington law further de fines “something of value” under Wash. Rev. Code Ann. § 9.46.0285 to include not only money and property, but also “any… privilege of playing at a game or scheme without charge.”

Six other states — Alabama, Alaska, Kentucky, Missouri, New Jersey, and New York — have adopted this same broad definition of “something of value.” However, Kentucky, Missouri, and New Jersey have expressly excluded free replays from their gambling statutes:

– Kentucky excludes extended or free plays awarded as prizes from the definition of “something of value.” See Ky. Rev. Stat. § 528.010(9).

– Missouri excludes amusement devices offering only immediate rights of replay. See Mo. Rev. Stat. § 572.010.

– New Jersey excludes privileges to play electronic amusement games (excluding slot machines) without charge. See N.J. Stat. Ann. § 2C:37-1(d).

B. Kater Was Not a Ruling on the Merits

The Ninth Circuit in Kater reversed a district court’s dismissal and held that the plaintiff had sufficiently alleged a claim under Washington’s Recovery of Money Lost at Gambling Act. Specifically, the complaint alleged that users were required to purchase virtual chips in order to continue gameplay. The Court accepted this allegation as true for purposes of a Rule 12(b)(6) moton to dismiss, but did not evaluate whether these allegations would prevail at trial. See Miranda B. v. Kitzhaber, 328 F.3d 1181, 1190-91 (9th Cir. 2003) (explaining that evaluating the propriety of a motion to dismiss is “completely separable and distinct from the merits of the …claim.”)

Thus, Kater was not decided on the merits and is not binding on any state court, including those in Washington. Further, the Ninth Circuit did not consider alternative factual assertions — such as the availability of free chips or voluntary purchases — as they were beyond the scope of the pleadings.

C. Factual Distinctions Between Kater and the Platform’s Gold Coin Games

The social casino at issue in Kater was also factually distinct from the Gold Coin Games here. Critically, the virtual chips at issue in Kater could be transferred between accounts and therefore could be exchanged or cashed out for actual value. Kater, at 786. The Platform’s Gold Coin Games do not have that option – Gold Coins acquired within an account are strictly restricted to that one account and cannot be transferred. Further, the plaintiff in Kater alleged that Big Fish Casino actively encouraged and facilitated such transactions. Id. Not so here.

Separately, the Platform has adopted a feature that ensures users are never required to purchase Gold Coins to continue playing. Users who deplete their balance are automatically awarded free Gold Coins sufficient to resume gameplay, thus eliminating any scenario where the virtual currency is “necessary” to play. This automatic refill feature has been a staple of similar offerings in an effort to ensure that players never feel that purchasing additional Gold Coins is required to keep playing. The automatic refill feature makes purchasing anything entirely, completely, and unequivocally optional.

D. Regulatory and Judicial Recognition of Lawful Social Casino Games and Offerings

The Ninth Circuit’s reasoning in Kater relied heavily on its reading of Bullseye Distributing LLC v. State Gambling Commission, 110 P.3d 1162 (Wash. Ct. App. 2005). However, the facts in Bullseye involved winning things of tangible, real-world value – merchandise or cash – through extended play. This feature was absent in Kater and is completely different than anything offered on the Platform.

Despite the Kater decision, Big Fish Casino, the defendant in that case, continued operations in Washington and ultimately settled the class action in 2019. As part of the settlement, Big Fish and other defendants agreed to implement several prospective features to ensure legal compliance, including:

1. Offering an always-free game mode (the free refills).

2. Publishing self-exclusion policies.

3. Providing resources on video game behavior disorders.

These settlements, all approved by the United States District Court, effectively signaled that other platforms which implement these measures — particularly always-free gameplay — do not fall constitute illegal gambling under the auspices of Kater.

E. Clarification From a Partial Summary Judgment Grant in Larsen v. PTT, LLC (2024)

On June 11, 2024, Judge Cartwright issued a partial summary judgment in Larsen v. PTT, LLC, 2024 WL 2943892, at *1 (W.D. Wash. June 11, 2024), finding a Kater-type violation where the games at issue failed to offer an adequate always-free (refill) option. The court held that users could not continue gameplay without waiting or purchasing additional coins and thus found the in-game currency to be a “thing of value.”

However, the Platform here is clearly distinguishable. It provides a continuous play option by automatically issuing free Gold Coins whenever a user’s balance hits zero. This ensures uninterrupted gameplay and removes any necessity for a purchase to resume playing.

Moreover, the Platform has voluntarily adopted all of the measures outlined in the Big Fish settlement:

– A robust responsible gaming policy.

– A voluntary self-exclusion program.

– Published resources addressing video game behavior disorders.

These measures align with the principles embraced by the courts in approving settlements and reinforce the conclusion that the Platform does not involve illegal gambling. Neither the decisions in Kater nor Larsen lead to a different result.

State Law Analysis

The Platform and the Games remove the “consideration” element from the definition of “gam bling” because the Sweeps Coins are granted to players only through no-purchase-necessary pro motional means. The Gold Coins that may be purchased to play the social casino side of the Games are entirely optional and independent of the sweepstakes model, and the Sweeps Coins are purchased to promote the purchase of Gold Coins for entertainment activities. However, a state law survey is still necessary because each state has a unique definition of “gambling” as well as state-specific sweepstakes regulations.

Section 1 – Sweepstakes no-consideration games state-by state analysis

Based on the cited authority as reviewed and applied by the Firm below, it the Firm’s opinion that a court of competent jurisdiction, presented with a full evidentiary record and argument advanced by qualified counsel, should conclude that the free-to-enter Sweeps Coin Games are lawful in the states listed in Section 1 below. Section 2 will separately analyze the legality of the social Gold Coin Games.

1. Arizona

Arizona defines “gambling” as “one act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill or a future contingent event.” Ariz. Rev. Stat. § 13-3301(6) (emphasis added).

The state statute does not define “something of value.”

The Arizona Attorney General has opined that “If…the element of risking or giving something of value is not present, then “gambling” does not occur.” 1987 Ariz. Op. Att’y Gen. 161 (1987) 1987 WL 121328. Further, the Attorney General explained that an activity is “amusement gambling” where the only benefit received is an “immediate and unrecorded right to replay which is not exchangeable for value.” Id.

Also according to the Arizona Attorney General, legitimate free-to-play sweepstakes are permitted in Arizona. See https://www.azag.gov/press-release/attorney-general-mayes-warns-against sports-betting-scams-ahead-super-bowl. The Arizona Department of Gaming also has similar guidelines that explain that free-to-play, no-purchase necessary sweepstakes are permitted. https://gaming.az.gov/resources/sweepstakes.

In this public guidance, the Department stated that such games are permissible provided that no consideration or purchase of any kind is required for participation. Importantly, the Department further emphasized that free players must have the same opportunity to win prizes as players who “willingly contribute consideration.”

In the Firm’s opinion, the Sweepstakes Coin Games offered by the Developer comply with Ari zona’s requirements governing promotional sweepstakes and free-to-play models. Specifically:

1. No Consideration Is Required: Players are not required to pay money, offer credit, or provide anything of value in exchange for entry into the Sweepstakes Coin Games. Access to these games is provided entirely through promotional means, including the use of an AMOE.

2. Equal Opportunity Regardless of Method of Entry: Sweepstakes Coins distributed through the AMOE afford users full and equal access to participate in the Sweepstakes Coin Games. There is no functional or material distinction in gameplay, prize eligibility, or prize redemption between users who receive Sweepstakes Coins via AMOE and those who receive them through other promotional channels.

3. Regulatory Context: Competing companies offering similar free-to-play promotional sweep stakes do not restrict access to Arizona residents, and the Firm is not aware of any enforcement actions, investigations, or guidance from Arizona regulatory authorities indicating that such plat forms violate state law.

Based on the Arizona Department of Gaming’s guidance and the legal structure of the Developer’s sweepstakes model, it is the Firm’s reasoned legal opinion that the Sweepstakes Coin Games are lawful in the State of Arizona, provided that:

– Participation remains free of any required consideration;

– The AMOE is clearly disclosed and easily accessible; and

– All players have equal chances to win regardless of how they obtained Sweepstakes Coins.

In further analysis, the State’s definition of “gambling” requires a risk of “something of value.” Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration. Further, the Sweeps Coin Games are a legitimate and genuine promotional mechanism recognized in Arizona. They are a permissible way to promote player engagement with the Gold Coin Games and incentivize Gold Coin purchases.

In the absence of consideration, the Sweeps Coin Games do not meet the definition of “gambling” and do not require a gambling license.

The State does not otherwise regulate or prohibit participating in a sweepstakes for an opportunity to win a prize. Sweepstakes are a legal promotional mechanism, where there is an adequate and equal alternative entry method that requires no consideration. These elements are present here, as represented by the Developer. For these reasons, it the Firm’s opinion that a court of competent jurisdiction, presented with a full evidentiary record and argument advanced by qualified counsel, would conclude that the Games are lawful in this state.

2. Arkansas

Arkansas law prohibits “bets [of] any money or any valuable thing on any game of hazard or skill.” Ark. Code Ann. § 5-66-113.

In Burford Distributing, Inc. v. Starr, the Arkansas Supreme Court held that the following sweep stakes — “a hole in one” prize promotion did not violate its Prize Promotion Act because the Spon sor “did not require participants to purchase its products in order to be eligible for a chance to win the car. [Entrant] was not required to pay anything other than his entry fee in order to compete for

a chance to win the car.” 341 Ark. 914, 918 (2000). It is also significant that the Court held that that entry fee to play in the golf tournament itself was not “consideration” for the chance to win the prize. Id., at 918.

In Ark. Op. Att’y Gen. 2002-240, the Arkansas Attorney General opined that a promotional scheme, where people coming into a business are given a ticket with a chance to randomly win a prize, does not violate Arkansas law.

Ark. Op. Att’y Gen. No. 2016-073 involved the application of Arkansas anti-gambling laws to RMT Sweepstakes electronic terminals. The Attorney General opined that the RMT terminals did not constitute illegal gambling or an illegal lottery, due to the absence of consideration for the sweepstakes entry. Patrons could only obtain entries by (1) purchasing a good at its normal price; (2) asking the clerk for a free entry; or (3) obtaining any number of free entries by mail. This was deemed a valid promotional sweepstakes and permissible under Arkansas law.

These opinions are consistent with the Arkansas Legislature’s declaration that sweepstakes are a valid form of advertising:

“The method of business advertising conducted in this state by the giving away of prizes consisting of money or other thing of value where no payment of money or other thing of value is required of participants in the awards, whether the advertising plan is entitled “Bank Night”, “Buck Night”, or any other name whatsoever, is declared to be a legal form of advertising.”

Ark. Code Ann. § 4-70-102.

However, in 2006, the Arkansas Attorney General issued another advisory opinion addressing the legality of promotional schemes involving a free method of entry. Ark. Op. Att’y Gen. No. 2006-052, 2006 WL 1794426. That opinion cautioned that the presence of a “free entry method” does “not necessarily make [a] ‘promotional scheme’ legal” under Arkansas law. In support of this conclusion, the opinion cited an unpublished and non-binding decision issued by the Pulaski County Chancery Court in State v. Bryant, No. 91-7596 (Pulaski County Chancery, 6th Div., Sept. 29, 1992) (commonly referred to as the Razorback Room case).

In the Bryant case, the court determined that a promotional bingo operation constituted a lottery— even though some patrons were allowed to play for free—because:

– The vast majority of participants paid to play;

– The defendants admitted that the game’s viability depended on those paid entries; – The game would “collapse” without financial contributions from players;

– Thus, the presence of free players did not negate the element of consideration where the core operation relied on paid entry.

Accordingly, the court concluded that the bingo game did not cease to be a lottery merely because a subset of players participated without charge, so long as others paid for their chances.

It is critical to note that this decision was not appealed, is unpublished, and is explicitly binding only within Pulaski County. As acknowledged in Footnote 1 of the Attorney General’s Opinion, its precedential weight is limited and localized.

In the Firm’s opinion, the analysis and holding of Bryant are not applicable to the Developer’s operations. The Sweepstakes Coin Games offered by the Developer fall squarely within the bounds of permissible promotional contests under Arkansas law, for the following reasons:

1. No Consideration Is Ever Required: Participation in the Sweepstakes Coin Games is always free. Players cannot and do not pay to obtain Sweepstakes Coins. All Sweepstakes Coins are dis tributed via promotional channels, including the AMOE, and there is no mechanism by which a player may exchange money or other value for Sweepstakes Coins.

2. No Paid Participants in Sweepstakes Coin Games: The Platform categorically separates the Sweepstakes Coin Games from the Gold Coin Games. While Gold Coin Games may involve completely optional Gold Coin purchases, Sweepstakes Coin Games are offered exclusively through (and for) free promotional means. There is no crossover in currency, eligibility, or mechanics that would transform Sweepstakes Coin Games into paid games of chance.

3. Distinguishable from Bryant: Unlike the promotional bingo game in Bryant, the Sweepstakes Coin Games do not rely on any revenue derived from paid players. The legal and factual predicate for the court’s finding of consideration in Bryant—the financial dependency on paid entries—does not exist here. Because every participant in the Sweepstakes Coin Games enters for free, the rationale used by the Pulaski County Chancery Court is wholly inapplicable.

4. Industry Practice and Enforcement Posture: Other operators offering similar free-to-play sweepstakes platforms do not restrict access to Arkansas residents. To date, the Firm is unaware of any regulatory or law enforcement actions brought under Arkansas law against such operators for sweepstakes promotions structured similarly to those offered by the Developer.

For the foregoing reasons, it is our reasoned legal opinion that the Sweepstakes Coin Games of fered by the Developer do not constitute gambling under Arkansas law and are therefore lawful promotional sweepstakes. The Razorback Room case, cited by the Arkansas Attorney General, does not alter this conclusion due to its narrow and distinguishable facts, its unpublished and non precedential status, and its limited jurisdictional applicability.

In further analysis, the State’s statutory definition of “gambling” requires a bet of money or any valuable thing. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration. Without consideration, the Sweeps Coins Games do not meet the definition of “gambling” and do not require a gambling license.

Further, sweepstakes are expressly recognized as valid form of advertising in Arkansas. Ark. Code Ann. § 4-70-102. The Attorney General of Arkansas has also recognized this in its 2002 and 2016 Opinions. Indeed, the Games offered by the Developer are similar to the RMT Sweep stakes terminals that were at issue in the 2016 Opinion – the players can only get entries through (1) a purchase of a good at its normal price – here, Gold Coins; or (2) a free request/mail-in entry. This type of mechanism is a valid, consideration-free sweepstakes under Arkansas law.

3. California

California statutes do not define “gambling,” rather the elements of “gambling” are established by case law. In the sweepstakes context, the California prohibition on “lotteries” has been discussed.

Lotteries are illegal under California law. See Cal. Penal Code § 320. California law defines a lottery as:

“any scheme for the disposal of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property . . . upon any agreement, understanding or expectation that it is to be distributed or disposed of by lot or chance.”

Cal. Pen. Code §319; Suski v. Marden-Kane, Inc., 21-cv-04539-SK, at *11 (N.D. Cal. Jan. 11, 2022)

In Haskell v. Time, Inc., the California Federal District Court considered the legality of sweep stakes offered by Time Warner which provided entry to win prizes by either purchasing subscrip tions to magazines or by mail-in. The Court held that these were legal sweepstakes, not lotteries and that the cost of postage for a mail-in entry was not consideration. Haskell v. Time, Inc., 857 F.Supp. 1392, 1404 (E.D. Cal. 1994).

The State’s elements of gambling and definition of “lottery” requires a risk of something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” or “lottery” and do not require a gambling (or other) license.

4. Colorado

“(2) “Gambling” means 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, over which the person taking a risk has no control….” Colorado Rev Statutes 18-10-102.

The State’s definition of gambling requires a risk of money or something of value. Here, players may only obtain the Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

5. Florida¹

“849.08 Gambling.—Whoever plays or engages in any game at cards, keno, roulette, faro or other game of chance, at any place, by any device whatever, for money or other thing of value, shall be guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.”

Fla. Stat. Ann. 849.08

(a) “Game promotion” means, but is not limited to, a contest, game of chance, sweepstakes, or gift enterprise, conducted by an operator within or throughout the state and other states in connection with and incidental to the sale of consumer products or services, and in which the elements of chance and prize are present.

Fla. Stat. Ann. § 849.094(1)(a)

The State’s definition of gambling requires that the activity be played “for money or other thing of value.” Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

Additionally, the sweepstakes portion of the Developer’s product is likely a “game promotion” under Fla. Stat. Ann. § 849.094(1)(a). The Sweeps Coins are obtained incidental to the sale of “gold coins,” which are a consumer product.

Separately, the Sweeps Coins may not be purchased or exchanged for any “consideration.” They may only be obtained through promotional “giveaways” with the purchase of the gold coins or received through the free alternative methods of entry.

¹Note that the Developer limits the redemption value of any prize won on any one spin or play to no more than $5000 in the state.

The State does not otherwise regulate or prohibit participating in a sweepstakes for an opportunity to win a prize, so long as the $5000 threshold requirement is observed.

6. Georgia

Georgia law prohibits gambling, and states that a person “commits the offense of gambling” when he or she “makes a bet upon the partial or final result of any game or contest or upon the perfor mance of any participant in such game or contest.” Ga. Code Ann. § 16-12-21(a).

A “bet” is defined under Georgia’s law as “an agreement that, dependent upon chance even though accompanied by some skill, one stands to win or lose something of value.” Id. at § 16-12-20(1).

If a sweepstakes involves consideration, chance and prize, it will be considered gambling, which is illegal. “The crime of gambling, in Georgia, consists of three elements: consideration, chance, and prize.” Monte Carlo Parties, Ltd. v. Webb, 253 Ga. 508, 509, 322 S.E.2d 246, 248 (1984) (citing Grant v. State, 75 Ga.App. 784, 787, 44 S.E.2d 513 (1947). Conversely, if consideration is removed, there is no illegal gambling in Georgia.

The State’s definition of “gambling” requires a “bet upon the… result of any game or contest…” which further requires “one stand[ing] to win or lose something of value.” Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

7. Hawaii

Under Hawaii law, a “person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence,

upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.” Haw. Rev. Stat. § 712-1220.

“Something of value” is defined as “any money or property, any token, object, or article exchange able for money or property, or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service or entertainment.” Id.

Furthermore, a sweepstakes promotion will be considered an illegal lottery only if the “three essential elements of a lottery” are satisfied. No. 69-28, 1969 WL 208747, at *2, 3 (Hawaii A.G. Nov. 24, 1969). To this end, the Hawaii Attorney General has opined that the “requirement of a

purchase by the players,” in a sweepstakes promotion, “furnishes the requisite consideration.” Id. The State’s definition of “gambling” requires a risk of something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license. Since players are not required to make a purchase to participate, then the element of consideration is not be found in Hawaii.

8. Illinois

““In Illinois, “[a] person commits gambling when he or she * * * knowingly plays a game of chance or skill for money or other thing of value” Dew-Becker v. Wu, 428 Ill. Dec. 622, 626 (Ill. App. Ct. 2018) (citing 720 ILCS 5/28-1(a)(1)).

Illinois Statutes, Chapter 720, Section 5/28-1 expressly exempts from its gambling law any “[g]ames of skill or chance where money or other things of value can be won but no payment or purchase is required to participate.” (Emph. added). We note the lack of relevant caselaw interpreting this provision, but the statutory language is clear limiting illegal sweepstakes to ones where a purchase is “required,” unlike here.

The Illinois Prizes and Gift Act authorizes sweepstakes where no purchase is required to enter and provides that “No sponsor may require a person in this State to pay the sponsor money as a condition of awarding the person or prize, or as a condition of allowing the person to receive, use, compete for, or obtain information about a prize.” 815 ILCS 525/20(a).

The State’s definition of gambling requires a risk of money or other thing of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

9. Indiana

“(d) “Gambling” means risking money or other property for gain, contingent in whole or in part upon lot, chance, or the operation of a gambling device….

Ind Code Ann 35-45-5-1

In F.A.C.E. Trading, Inc. v. Carter, 821 N.E.2d 38 (Ind. Ct. App. 2005), the Court held that “Ad Tab” dispensing machines were illegal gambling devices, notwithstanding that a person can enter without purchasing a player card, because the participant selects the tab based upon the game he/she wants to play not the coupon to be provided and purchasers don’t even know what coupons they are purchasing, and the ad-tabs do not always return the same value or property for the same consideration, and are therefore clearly distinguishable from legitimate promotional games offered by companies like McDonald’s and Coca-Cola, approving the lower court’s conclusion that: “A distinction exists between promotion of a primary business of selling a meal or a drink for valuable consideration together with a chance to win a business related prize, in kind or, albeit, as a sweep

stakes prize which attracts sales, and promotion of a non-primary business related and incidental activity for valuable consideration together with a chance to win a prize unrelated to either the primary business activity or attraction of sales. The difference in the distinction is in the essence of the product: [t]he former promotes sales of the primary business product, e.g., food, while the latter promotes the prize and the product (coupon) is unrelated to either the primary business purpose of the promoter, of the distributor, or of [FACE]. The court fails to discern any claim that [FACE] is engaged in the primary business of marketing for the businesses which advertise in the Ad–Tabs, or that [FACE]’ s primary source of revenue is from those businesses as opposed to the sale of Ad–Tabs.” Id., at 43.

The Games is likewise distinguishable from the Ad-Tabs involved in F.A.C.E. Trading and would be legal in Indiana since the Games involves the legitimate purchases of products, and a free method of entry is provided.

The State’s definition of gambling requires a risk of money or other property for gain. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

10.Iowa

“Gambling means any activity where a person risks something of value or other consideration for a chance to win a prize.” Iowa Code 99B.1(16)

Iowa Code 99B.1(19)

Iowa Code § 725.12 defines a “lottery” as a “scheme, arrangement, or plan whereby one or more prizes are awarded by chance or any process involving a substantial element of chance to a participant, and where some or all participants have paid or furnished a consideration for such chance.” This has been interpreted consistent with other state laws. See, Cent. States Theatre Corp. v. Patz, 11 F. Supp. 566, 568 (S.D. Iowa 1935) (“The elements necessary to constitute a lottery are: First, a prize; second, a chance; and third, a consideration”). Therefore, as explained above, because a payment or consideration is not required to enter the Games, it would not be considered an illegal lottery under caselaw and a strict and plain reading of the applicable statute, as required under Iowa law. Accord, State v. Hearn, 797 N.W.2d 577, 585 (Iowa 2011) (“criminal statutes are to be strictly construed in favor of the accused”).

In 1994, Iowa enacted its Prize Promotion Law, IA Code § 714B, which authorizes sweepstakes where a free method of entry is available and provides that a “sponsor of a prize shall not require a person to purchase merchandise or pay or money as a condition of awarding a prize or as a condition of allowing the person to receive, use, compete for, or obtain information about a prize” unless a written prize notice is provided. Iowa Code § 714B.2.

Here, a payment of consideration or any purchase are not required or a condition to playing the Games. All required disclosures of a “written prize notice” are made in the Official Rules, including that the retail value of the prize, the odds of winning, the sponsor’s name and address, and any eligibility, prize and time restrictions. Accordingly, the Games complies with Iowa’s Prize Pro motion Law.

The State’s definition of gambling requires a risk of something of value or other consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

11.Kansas

“The Kansas Criminal Code enacted by the legislature now contains a broad prohibition against gambling, gambling operations, and gambling devices. See K.S.A. 21-4302 through 21-4308. `Gambling’ is defined as making a bet or entering or remaining in a gambling place with intent to make a bet, to participate in a lottery, or to play a gambling device. K.S.A. 21-4303.” State, ex rel. Stephan v. Finney , 254 Kan. 632, 653 (1994).

There are three essential elements of a lottery: (1) consideration, (2) prize and (3) chance. See State ex rel. Stephan v. Parrish , 256 Kan. 746 (1994)

In 2010, Kansas amended its gambling law in order to define a “lottery” as “an enterprise wherein for a consideration the participants are given an opportunity to win a prize, the award of which is determined by chance” and to define “consideration” as excluding “mere registration without purchase of goods or services.” Kansas Statutes § 21-6403(b) and (c) (Emph. added).

Therefore, as explained above, because payment of consideration is not required to enter the Games, it would not be considered an illegal lottery or gambling under a plain reading of the statute.

The State’s definition of gambling or “lottery” requires payment of consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

12.Louisiana

Louisiana defines gambling as follows:

“Gambling is the intentional conducting, or directly assisting in the conducting, as a business, of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit.” La. Stat. tit. 14 § 90. “Anything of value” is not defined.

Louisiana generally permits sweepstakes, with specific requirements for sweepstakes offered to advertise or promote any consumer products. La. Stat. Tit. 51 § 1721 et seq.

§ 1721 permits “a prize or gift to a consumer as part of any advertising or sales promotion plan” if certain disclosures are made to the consumer:

The disclosure must contain all of the following:

(1) A full description of the exact prize or gift tendered to the consumer, including its cash value. (2) All terms and conditions attached to the prize or gift.

(3) A statement that the consumer is given, invited, required, or requested to submit to a sales presentation or promotional program.

(4) A full description of the product, real estate, investment, services, membership, or any other item to be offered for sale, including the price of the least expensive and the most expensive item or parcel.

Additionally, the Attorney General of Louisiana has opined that a merchant’s give-away plan in which persons registering for prizes did not risk the loss of anything of value and were not obliged to make purchases as a condition for registering for prizes did not violate Louisiana gambling statute. La. At’y Gen. Op. No. 77-438 (Apr. 20, 1977), 1977 WL 34710.

The State’s definition of gambling requires risk of loss of something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

Louisiana permits sweepstakes contests provided that participants in the contest do not “risk the loss of anything of value” and are “not obliged to make a purchase as a condition for registering for prizes. This conclusion is based on La. At’y Gen. Op. No. 77-438 (Apr. 20, 1977), 1977 WL 34710 and the statutes at La. Stat. Tit. 51 § 1721 et seq., which permit “a prize or gift to a consumer as part of any advertising or sales promotion plan.”

The Developer’s terms and conditions appear to be consistent with the disclosure requirements in § 1721.

A special discussion of Louisiana’s electronic sweepstakes provisions is also warranted. Louisiana Revised Statutes § 51:1727(C) provides that:

“At no time shall the revealing of a sweepstakes promotion winner, the revealing of a sweepstakes prize, or the revealing of a sweepstakes prize value be linked to or associated with the play or simulation of play of an electronic game or similar contest on a computer, computer system, or any other electronic system.”

Additionally, the statute further prohibits:

“At no time shall a person be required to or offered an opportunity to enter into any monetary transaction through a computer, computer system, or any other electronic system, for the purpose of entering into or winning a sweepstakes promotion.”

It is our reasoned legal opinion that the type of promotional play offered by the Developer complies with Louisiana law as currently written and interpreted. The Developer’s Platform facilitates free gameplay through the use of Sweepstakes Coins, which are provided at no cost via promotional means or through a legally compliant alternative method of entry (“AMOE”). When players use these Sweepstakes Coins successfully, they may redeem them for cash prizes, pursuant to the published Sweepstakes Rules.

Critically, the Platform does not require nor permit users to engage in a “monetary transaction” for the purpose of obtaining Sweepstakes Coins. Players do not (and cannot) exchange cash, credit, or any other consideration for the Sweepstakes Coins that are capable of redemption. Thus, the statutory prohibition against monetary transactions linked to sweepstakes participation is not implicated.

Moreover, the process for obtaining, using, and redeeming Sweepstakes Coins is governed by ex press terms set forth in the Developer’s Sweeps Rules. These rules delineate the promotional nature of the Sweepstakes Coin Games and further reinforce the promotional character of the Developer’s Games.

Additionally, the Firm notes that other companies operating in the same industry, offering similar free-to-play sweepstakes models, do not exclude Louisiana residents from participation. To date, the Firm is unaware of any enforcement action, regulatory investigation, or litigation initiated by Louisiana authorities against those operators.

With that conclusion, we nevertheless do advise a degree of caution with respect to subsection (C) of Louisiana Revised Statute § 51:1727. This provision appears to prohibit the revelation of sweep stakes winners, prizes, or prize values when such revelation is linked to or associated with the simulation or play of an electronic game. This language could potentially be interpreted broadly to encompass sweepstakes platforms like the Developer’s, which simulate slot-style or casino style gameplay when Sweepstakes Coins are used.

Nonetheless, the Firm opines that the practical and regulatory context mitigates the risk:

– Competitor platforms currently permit gameplay in Louisiana without restriction. – There is no known enforcement or litigation history involving this provision in relation to sweep stakes-based promotional games.

– The Developer does not condition prize revelation on gameplay outcomes, and the value of prizes is only ascertainable after gameplay concludes, and only in accordance with published rules.

Based on the foregoing, it is the Firm’s opinion that the Developer’s Platform does not violate Louisiana law, provided that the Developer continues to abide by the following standards:

1. Sweepstakes Coins are distributed solely through promotional means or AMOE; 2. No monetary transaction occurs for the purpose of entering or participating in the sweep stakes; and

3. The platform continues to maintain clear and accessible Sweepstakes Rules governing redemption and prize disclosures.

13.Maine

In Maine, the elements of an illegal lottery are (1) prize; (2) chance; and (3)

consideration having pecuniary value paid directly or indirectly by a participant. State v. Bussiere, 155 Me. 331, 154 A.2d 702 (1959).

In State v. Bussiere, the Court held that a merchant, who conducted a promotional drawing whereby he gave away cash awards, was not guilty of illegal gambling. Id. There, the Court rea soned that no consideration was present because “no payment, purchase or consideration of any kind was required to become registered and to participate,” in the promotional drawing. Id.

In the absence of consideration, the Games do not meet the definition of “gambling” or “lottery” and do not require a gambling (or other) license.

14.Massachusetts

“[T]he essence of a lottery is “a chance for a prize for a price”; that the price must be something of value and not merely the formal or technical consideration, such as registering one’s name or attending at a certain place, which might be sufficient consideration to support a contract; that the price “must come from participants in the game in part at least as payments for their chances”

Commonwealth v. Heffner, 304 Mass. 521, 523 (Mass. 1939)

The Supreme Judicial Court of Massachusetts has stated: “This court has consistently held that three elements must exist in order for any scheme to constitute a lottery. The three elements are payment of a price, a prize, and some element of chance.” Mobil Oil Corp. v. Att’y Gen., 361 Mass. 401, 406 (1972).

In Mobile Oil, the Court held that prize promotion that offered free entry along with an entry by purchasing merchandise was not an illegal lottery. The Games would likewise be legal in Massa chusetts since the Games involves the legitimate purchase of a product, and a free method of entry is provided.

The State’s definition of gambling or “lottery” requires payment of a price that is something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

15.Minnesota

“A “gambling device” is defined as a contrivance that, in exchange for consideration, provides a person an opportunity to obtain something of value, other than free plays, whose outcome is determined principally by chance. Minn. Stat. § 609.75” In re N. Metro Harness Initiative, LLC, A13-0033, at *7 (Minn. Ct. App. Sep. 3, 2013).

The Attorney General has opined that where no consideration of money or in kind was required to participate in a prize promotion, there would be no violation of lottery laws. Op. Atty. Gen. 510-B, 733G, May 5, 1965. See also Op. Atty. Gen., 510-B-5, April 28, 1952 (where chances to win prizes was not dependent upon making any purchase there was no lottery).

Further, by statute, Minnesota has implicitly authorized prize promotions like the Games and authorized “in-package chance promotions” where a prize promotion provides a free method of entry and a purchase is coupled “with a legitimate, valuable product.” See, Minnesota Souvenir Milkcaps, LLC v. State, 687 N.W.2d 400, 403 (Minn. Ct. App. 2004) (holding that “milkcaps” had no value).

The State’s definition of gambling requires staking or risking something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

16.Missouri

(4) “Gambling”, a person engages in gambling when he or she stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his or her control or influence, upon an agreement or understanding that he or she will receive something of value in the event of a certain outcome.”

Mo. Ann. Stat. § 572.010(4).

“Something of value” means:

“[a]ny money or property, any token, object or article exchangeable for money or property, or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein or involving extension of a service, entertainment or a privilege of playing at a game or scheme without charge”

Mo. Ann. Stat. § 572.010(12).

Older Missouri cases prohibit any payment for a chance to win a prize, regardless of whether a free method to enter was available. See, e.g., Mobil Oil Corp. v. Danforth, 455 S.W.2d 505, 507 (Mo. 1970). Since that time, the Missouri Constitution was amended to define a lottery as “games or contests whereby money or something of value is exchanged directly for the ticket or chance to participate in the game or contest.” Mo. Const. Art. III, § 39(9) (amended 1978).

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

Further, Missouri courts have determined that prizes of free replays won were not something of value; and the mere playing of such machines does not constitute gambling. Matter of An Omega Brand: Double Up Queens or Better, Five Card Draw, Elec. Poker Mach., Serial No. 5265, Model P.R.A., 676 S.W.2d 292, 294 (Mo. Ct. App. 1984). In Omega, the machines were rendered illegal when the owners exchanged the accumulated free replays for cash.

The Missouri constitutional amendment of 1978 only prohibits a “direct” exchange of money or something of value for the lottery ticket or chance to participate. Here, there is no “direct” ex change that falls into the prohibition – there is no mechanism by which a player can pay directly to purchase sweeps coins. Moreover, the Missouri legislature does regulate certain sweepstakes expressly – for example, there are specific regulation applicable to using sweepstakes to sell time shares and similar “tourist-related” services. See Mo. Ann. Stat. § 407.610.

The legislature however has not enacted similar prohibitions across the board or with respect to specific promotional schemes similar to the Developer’s Games. Thus, it is reasonable to conclude that the legislature is well-aware of sweepstakes in the State of Missouri, yet has enacted specific laws only for the time-share/tourist-related subset discussed in § 407.610

17.New Hampshire

“(d) “Gambling” means to risk something of value upon a future contingent event not under one’s control or influence, upon an agreement or understanding that something of value will be received in the event of a certain outcome. For the purposes of this subparagraph, the phrase “something of value” shall include a sweepstakes ticket or other item obtained in conjunction with the purchase of goods or services that entitles the holder to a share or chance in a sweepstakes where, but for the opportunity to enter the sweepstakes, the value of purchased goods or services is insufficient to justify the purchase or the inducement to purchase the goods or services is the opportunity to play on a gambling machine.”

NH Rev Stat Ann 647:2

New Hampshire Revised Statute § 287-D:1 prohibits games of chance which constitute gambling or illegal lotteries. Gambling is defined in Section 647:2 as “to risk something of value upon a future contingent event not under one’s control or influence, upon an agreement or understanding that something of value will be received in the event of a certain outcome” (emph. added) and lottery is defined in Section 647:1 as disposing of property “in any way whereby the payment for such property is, in whole or in part, induced by the hope of gain by luck or chance.”

As explained above, the Sweeps Coins Games offer a completely free method of entry. The entries given as part of a promotion with a purchase of Gold Coins are a reward and the Gold Coins provide something of value – continued entertainment. Therefore, nothing is being staked or risked and the Games would not constitute gambling or an illegal lottery in New Hampshire under a fair reading of the applicable statute, as required. Accord, Czyzewski v. New Hampshire Dep’t of Safety, 165 N.H. 109, 111, 70 A.3d 444, 446 (2013) (criminal statutes are construed “according to the fair import of their terms and to promote justice”).

The State’s definition of gambling requires risking something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

18.New Mexico

Under New Mexico law:

“lottery” means an enterprise wherein, for a consideration, the participants are given an opportunity to win a prize, the award of which is determined by chance, even though accompanied by some skill….As used in this subsection, “consideration” means anything of pecuniary value re quired to be paid to the promoter in order to participate in a gambling or gaming enterprise.

N.M. Stat. Ann. § 30-19-1 (emphasis added).

In State v. Jones, 44 N.M. 623; 107 P.2d 324 (1940) the court recognized that the absence of prize, chance, or consideration is fatal to identifying any transaction as a lottery.

Further, New Mexico permits promotional prizes for advertising purposes. See, e.g., N.M. Stat. Ann. § 30-19-6, which permits movie theaters to offer pries of cash or merchandise for advertising purposes.

The State’s definition of gambling or “lottery” requires consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

There is nothing of pecuniary value “required to be paid…in order to participate in a gambling or gaming enterprise.”

The promotional sweepstakes component of the Games is consistent with New Mexico anti-gam bling law, and constitutes a valid promotional prize, similar to what is permitted for movie theaters under § 30-19-6.

In the absence of consideration, the Games do not meet the definition of “gambling” or “lottery” and do not require a gambling license.

19.North Carolina

The North Carolina statute defining gambling, while using different words, is quite similar in its effect. See N.C.G.S. § 14–292 (2011) (including in definition of gambling any “game of chance … at which any money, property or other thing of value is bet”).

Hest Techs., Inc. v. State, 749 S.E.2d 429, 431 n.1 (N.C. 2012)

Decisions in North Carolina pertaining to sweepstakes exclusively pertain to internet cafes and electronic sweepstakes devices, which are irrelevant here. In these cases, the prize promotion was a “pretexual sweepstakes” providing essentially nothing of value to paying entrants. See, e.g., Crazie Overstock Promotions, LLC v. State, 377 N.C. 391 (2021).

North Carolina courts have also approved sweepstakes promotions where long-distance phone cards were sold with a sweepstakes game piece to incentivize their purchase. Am. Treasures, Inc. v. State, 173 N.C. App. 170, 173, 617 S.E.2d 346, 348 (2005).

The promotional scheme in American Treasures could also be entered through a mail AMOE re quest. Id. at 174.

The State’s definition of gambling requires consideration. Here, players may only obtain redeem able Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

The State does not otherwise regulate or prohibit participating in an online sweepstakes for an opportunity to win a prize. N.C. Gen. Stat. § 14-306.4 applies only to physical machines, not online sweepstakes.

Promotional sweepstakes like the Games here offered by the Developer are valid and permissible, under the precedent of American Treasures.

20.Oklahoma

“Any person who bets or plays at any of said prohibited games, or who shall bet or play at any games whatsoever, for money, property, checks, credits or other representatives of value with cards, dice or any other device which may be adapted to or used in playing any game of chance or in which chance is a material element, shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than Twenty-five Dollars ($25.00), nor more than One Hundred Dollars ($100.00), or by imprisonment in the county jail for a term of not less than one (1) day, nor more than thirty (30) days, or by both such fine and imprisonment.

Okla. Stat. tit. 21, § 942.

Examples of “gambling” in 21 O.S.Supp.2019, § 941 are “poker, roulette, craps or any banking or percentage, or any gambling game played with dice, cards or any device.”

“Lottery” is defined under Oklahoma law as:

any scheme for the disposal or distribution of property by chance among persons who have paid, or promised, or agreed to pay any valuable consideration for the chance of obtaining such property, or a portion of it, or for any share of or interest in such property, upon any agreement, understanding or expectation that it is to be distributed or disposed of by a lot or chance, whether called a lottery, a raffle, or a gift enterprise, or by whatever name the same may be known.”

21 O.S.Supp.2019, § 1051(A)

The State’s definition of gambling or “lottery” requires payment of valuable consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

21.Oregon

Oregon law prohibits gambling and defines it as the staking or risking of “something of value upon the outcome of a contest of chance or a future contingent event not under the control or influence of the person, upon an agreement or understanding that the person or someone else will receive something of value in the event of a certain outcome.” Ore. Rev. Stat. § 167.117(7).

Further, “something of value” is defined as “any money or property, any token, object or article exchangeable for money or property, or any form of credit or promise directly or indirectly con templating transfer of money or property or of any interest therein.” Id. at § 167.117(22).

Additionally, Oregon law instructs that a promotional sweepstakes will not be considered an illegal lottery – provided that the participants are not required to provide any form of consideration for their inclusion in the sweepstakes. Oregon courts have explained that “consideration” must be of some economic value to the participant – i.e., more than what is generally required for consideration under the terms of a contract. Cudd v. Aschenbrenner, 233 Or. 272, 377 P.2d 150 (1962).

The State’s definition of gambling requires a risk of money or something of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

Additionally, competing companies that offer similar services to the Developer do not block residents of the State, and the firm is unaware of any regulatory or state law enforcement proceedings against those operators.

22.Pennsylvania

“The Act of March 31, 1860, P.L. 374, does not define “lottery”; the prohibition is general. A lottery may be defined to be any scheme whereby one, on paying money or other valuable thing to another becomes entitled to receive from him such a return in value or nothing as some formula of chance may determine.” Commonwealth v. Banks, 98 Pa. Super. 432 (Pa. Super. Ct. 1930).

“The basic elements of a lottery are (1) a prize to be won; (2) a winner to be determined by chance; and (3) the payment of a consideration by the player.” Com. v. Lane, 242 Pa. Super. 283, 286 (1976).

The State’s definition of gambling or “lottery” requires payment of money or other valuable thing. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “lottery” and do not require a gambling license.

23.Rhode Island

Rhode Island prohibits gambling, which is defined as “including, but not limited to, pool-selling, bookmaking, maintaining slot-machines, roulette wheels or dice tables, and conducting lotteries, Policy, Bolita, or numbers games or selling chances in them.” R.I. Const. art. VI, § 22; 11 R.I. Gen. Laws Ann. § 11-51-1(a).

Rhode Island permits sweepstakes contests, provided that players are not required to provide mon etary consideration in order to participate. Finch v. Rhode Island Grocers, Ass’n, 175 A.2d 177 (R.I. 1961).

In the absence of consideration, the Games do not meet the definition of “lottery” and do not require a gambling license.

Additionally, competing companies that offer similar services to the Developer do not block residents of the State, and the Firm is unaware of any regulatory or state law enforcement proceedings against those operators.

24.South Carolina

South Carolina defines “gambling” in terms of specific prohibited games, such as “cards or dice” under Section 16-19-40. The South Carolina Supreme Court explained that the key to whether a game is prohibited is whether there is a “wager.” “In other words, gambling/gaming depends not on the skill/chance ratio, but on the wager.” Town of Mount Pleasant v. Chimento, Opinion No. 27197, at *11 (S.C. Nov. 21, 2012).

The Attorney General opined that a prize promotion by a credit union which required a person to deposit $10 with the credit union was an illegal lottery. 1973 S.C. Op. Atty. Gen. 193.

Furthermore, the state recognizes that sweepstakes, like the Games, which provide a free method of entry and a legitimate product for sale, are legal. See, Ward v. W. Oil Co., 387 S.C. 268, 277, 692 S.E.2d 516, 521 (2010) (holding that “game pieces [for pull-tab games] were not a “legitimate promotion or sweepstakes,” referencing South Carolina’s liquor laws (S.C. Code Ann. § 61-4-

580) which authorized games of chance where “no chase payment, entry fee, or proof of purchase is required as a condition of entering the game promotion or receiving a prize.”

The State’s definition of gambling requires a “wager”. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “wager” and do not require a gambling license.

25.South Dakota

Payment of consideration is an essential element of a prohibited “lottery” under South Dakota law. “The term “lottery” has no technical meaning; rather, courts adopt the generally accepted definition in popular use. Quatsoe v. Eggleston, 42 Or. 315, 71 P. 66 (1903); State v. Coats,158 Or. 122, 74 P.2d 1102 (1938). The usual generic definition of the term in the organic law is any plan or scheme which has three essential elements: 1) a prize, 2) the element of chance, and 3) consideration paid for the opportunity of winning the prize.”

Poppen v. Walker, 520 N.W.2d 238, 243 (S.D. 1994).

The Attorney General stated that “this office has approved promotional schemes whereby merchants allowed any person to enter in a drawing for prizes as long as it was clearly made known to the public that no purchase was necessary and where there was an easy way to enter without having to make a purchase.” 1986 S.D. Op. Att’y Gen. 181 (1986).

The State’s definition of gambling or :lottery” requires consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “lottery” and do not require a gambling license.

26.Texas

Under Texas law, “gambling” generally refers to participation in lottery-type activities involving, at a minimum, consideration, chance, and a prize.

“The other essential element of a gambling device is that the operation of the device requires the payment of consideration. Op.Tex. Att’y Gen. No. MW-168 (1980)” State v. Fry, 867 S.W.2d 398, 402 (Tex. App. 1994).

The Attorney General opined that a prize promotion by a car dealership which required a person to test drive a vehicle was not an illegal lottery, since no purchase was required to enter. Tex. Atty. Gen. Op. JC-0174 (Feb. 2, 2000).

The State’s definition of gambling requires payment of consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

27.Utah

“(8) (a) “Gambling” means risking anything of value for a return or risking anything of value upon the outcome of a contest, game, gaming scheme, or gaming device when the return or outcome: (i) is based on an element of chance, regardless of:

(A) the existence of a preview or pre-reveal feature in the device, contest, or game; or (B) whether the preview or pre-reveal feature described in Subsection (8)(a)(i)(A) allows users to see individual or successive outcomes; and

(ii) is in accord with an agreement or understanding that someone will receive anything of value in the event of a certain outcome.”

Utah Code Ann. § 76-10-1101

The Utah Supreme Court has approved sweepstakes where “no purchase was necessary” to enter. See, Geis v. Cont’l Oil Co., 29 Utah 2d 452, 453 (1973).

The State’s definition of gambling requires risking anything of value. Here, players may only ob tain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

28.Vermont

“Notwithstanding the provisions of this chapter, a person may organize, execute, or participate in a contest or game of chance, including a sweepstakes, provided that persons who enter the contest or game of chance are not required to venture money or other valuable things. The cost of mailing an entry shall not be considered a venture of money or other valuable things. This section shall not be construed to prohibit a person from organizing, executing, or participating in a contest that is not a contest of chance.”

Vt. Stat. tit. 13 § 2143b

Further, 13 V.S.A. § 2143b provides as follows: “Notwithstanding the provisions of this chapter, a person may organize, execute, or participate in a contest or game of chance, including a sweep stakes, provided that persons who enter the contest or game of chance are not required to venture money or other valuable things. The cost of mailing an entry shall not be considered a venture of money or other valuable things.” (Emph. added.) There are no cases or Attorney General opinions concerning this statute.

Vermont law expressly permits a sweepstakes where there is no consideration and a mail-in entry is expressly excluded from the definition of “consideration.”

Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

29.Virginia

“Illegal gambling” means the making, placing, or receipt of any bet or wager in the Commonwealth of money or other consideration or thing of value, made in exchange for a chance to win a prize, stake, or other consideration or thing of value, dependent upon the result of any game, contest, or any other event the outcome of which is uncertain or a matter of chance, whether such game, con

test, or event occurs or is to occur inside or outside the limits of the Commonwealth.” Va. Code Ann. § 18.2-325

The Attorney General has opined that sweepstakes which offer a legitimate product for sale in return for an entry, along with a free method are legal, but not where “the product is, demonstrable of no interest to the consumer,” such as the sale of telephone cards with little to no value. See 2010 WL 4137620, at *3 (Va. A.G. Oct. 15, 2010)

Virginia Code § 18.2-242(a) implicitly authorizes sweepstakes and provides: “No retail establishment in this Commonwealth shall use any game, contest, lottery or other scheme or device, whereby a person or persons may receive gifts, prizes or gratuities as determined by chance for the purpose of promoting, furthering or advertising the sale of any product or products having both a federal and state excise tax placed upon it, and the fact that no purchase is required in order to participate in such game, contest, lottery or scheme shall not exclude such game, contest, lottery or scheme from the provisions of this section.” Since the Games do not involve promoting or advertising prizes having both a federal and state excise tax, this restriction does not apply.

The State’s definition of gambling requires a bet or wager of money or other consideration or thing of value. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

30.Washington D.C.

The District of Columbia does not have a statutory definition of “gambling,” but several court cases establish that “gambling” under D.C. law is activity that meets the traditional 3 element test: (1) offering of a prize; (2) giving of consideration; and (3) the awarding of the prize by chance. An “[e]ssential element of lottery is awarding of prize by chance, but exact method adopted for application of chance to distribution of prizes is immaterial.” Forte v. United States, 83 F.2d 612 (D.C. 1936). “To gamble, as is well known, is to risk one’s money or other property upon an event, chance or contingency in the hope of the realization of gain, and the test as to whether a particular machine combination constitutes a gambling device is, as the Seventh Circuit Court of Appeals said, whether it is adapted, devised and designed for the purpose of playing any game of chance for money or property. The elements, chance and money or property, are therefore fundamental ingredients.” Wash. Coin Mach. Ass’n v. Callahan, 79 U.S. App. D.C. 41, 142 F.2d 97, 98 (1944).

The District’s definition of gambling requires giving consideration. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

The District does not otherwise regulate or prohibit participating in a sweepstakes for an opportunity to win a prize.

31.West Virginia

Under W Va Code Section 61-10-11, it is unlawful to play any private “lottery or raffle” that is won by “using dice, or by any other game of chance.”

Under Section 61-10-5, it is unlawful to “bet or wage money or other thing of value on any game of chance.

The West Virginia Prizes and Gifts Act, W. Va. Code Ann. § 46A-6D-1 (West), authorizes sweep stakes where no consideration is required to enter but protects consumers against solicitations that are “directed toward telling consumers that the opportunity for winning [the prize] is enhanced by purchasing the [product].” State By & Through McGraw v. Imperial Mktg., 196 W.Va. 346, 352– 53 (1996).

The State’s definition of gambling requires a bet or wager of money or other thing of value on any game of chance. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

The Games offered by the Developer are consistent with the Prizes and Gifts Act, as the Terms and Conditions (as well as the Sweeps Policy) reviewed by the Firm does not contain any such “enhancement” statements and otherwise disclose that “no purchase is necessary.”

32.Wisconsin

Wisconsin uses a four element test to define gambling: “[The] following four elements of a gam bling machine: (1) “a contrivance”; (2) “which for a consideration”; (3) “affords the player an opportunity to obtain something of value”; and (4) “the award of which is determined by chance, even though accompanied by some skill and whether or not the prize is automatically paid by the machine.”

Quick Charge Kiosk LLC v. Kaul, 388 Wis. 2d 525, 533 (Wis. Ct. App. 2019)

In Coca-Cola Bottling Co. of Wisconsin v. La Follette, 106 Wis. 2d 162, 167 (Ct. App. 1982) the Court held that a soft drink manufacturer’s sales promotion program in which consumers could win sums of money depending on what was printed under the liner of specially marked bottle caps did not violate the State’s lottery laws, since the specially marked bottle caps were available on bottles of soft drinks or could be obtained without charge by mail.

The State’s definition of gambling requires consideration. Here, players may only obtain redeem able Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consideration.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

33.Wyoming

“(iii) “Gambling” means risking any property 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, over which the person taking a risk has no control”

Wyo Stat Ann 6-7-101

As explained above, the Games offers a free method of entry and provides something of value beyond the chance to win. Thus, nothing is being staked or risked and the Games would not constitute gambling or an illegal lottery.

Further, Wyoming Statute §§ 40-12-201 and -203 are “prize notice” statutes which implicitly authorize prize promotions like the Games and requires disclosure of the name and address of the sponsor, the retail value of the prize and odds of winning, and eligibility and prize restrictions when a payment is required to receive a prize. As set forth above, no payment is required to enter the Games and, in any event, the Official Rules make these disclosures.

The State’s definition of gambling requires risking property. Here, players may only obtain redeemable Sweeps Coins for free – Sweeps Coins may not be purchased or obtained for consider ation.

In the absence of consideration, the Games do not meet the definition of “gambling” and do not require a gambling license.

Section 2 – Gold Coin Games state-by-state analysis

Based on the cited authority as reviewed and applied by the Firm below, it the Firm’s opinion that a court of competent jurisdiction, presented with a full evidentiary record and argument advanced by qualified counsel, should conclude that the free-to-play and no prize of value social casino (Gold Coins) component of the Games is lawful in the states listed in Section 2.

1. Arizona

Arizona defines gambling as the “risking or giving of something of value for the opportunity to obtain a benefit from a game or contest of chance or skill or a future contingent event.” Ariz. Rev. Stat. Ann. § 13-3301(6).

Restated, this definition means that gambling occurs when there is a “payment of a price for a chance to gain a prize.” Boris v. Bartell, 82 Ariz. 217,221, 310 P.2d 834, 837 (Ariz. 1957).

In 1987, the Arizona Attorney General addressed whether a continued right to keep playing a game was a prize for the purpose of “gambling.” He determined that it was not. 1987 Ariz. Op. Att’y Gen. 161 (1987); 1987 WL 121328.

The Gold Coin Games do not involve the player staking or risking anything of value to play virtual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may purchase additional virtual coins for the privilege of continued entertainment.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game. They may not be transferred.

Accordingly, the Firm opines that the Gold Coin Games do not involve “gambling” and are not prohibited under state law. The state does not otherwise regulate or prohibit virtual slot machine games that pay out in virtual coins with no real-world value, redemption, or exchange mechanism

2. Arkansas

Arkansas law prohibits “bets [of] any money or any valuable thing on any game of hazard or skill.” Ark. Code Ann. § 5-66-113.

In evaluating a pinball machine that awarded free plays, the Arkansas Supreme Court held that “merely setting up a machine that gives free games is not a violation of” the state’s gambling statutes. Bostic v. City of Little Rock, 241 Ark. 671, 673; 409 S.W.2d 825, 826 (1966). However, in Bostic, the pinball machine was a gambling device because “free games won on the machine were converted to cash by the proprietor’s paying off these games in money.” Id.

Additionally, the Arkansas Supreme Court held that Megatouch countertop machines that offered various games of chance were not “gambling devices per se” because they do not have any type of pay out mechanisms.

State v. 26 Gaming Machines, 356 Ark. 47, 54, 145 S.W.3d 368, 373 (2004).

The Gold Coin Games do not involve the player betting any money or any valuable thing to play virtual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may purchase additional virtual coins for the privilege of continued entertainment.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

The Firm was unable to find any state-specific caselaw that considers virtual coins (with no ex change or redemption value outside the game) to be “any valuable thing.”

3. California

California statutes do not define “gambling.”

Instead, California law prohibits manufacturing, owning, or operating a “slot machine or device.” Cal. Penal Code § 330b(a). The statute further provides:

For purposes of this section, ‘slot machine or device’ means a machine, apparatus, or device that is adapted, or may readily be converted, for use in a way that, as a result of the insertion of any piece of money or coin or other object, or by any other means, the machine or device is caused to operate or may be operated, and by reason of any element of hazard or chance or of other out come of operation unpredictable to him or her, the user may receive or become entitled to receive any piece of money, credit, allowance, or thing of value, or additional chance or right to use the slot machine or device, or any check, slug, token, or memorandum, whether of value or otherwise, which may be exchanged for any money, credit, allowance, or thing of value, or which may be given in trade, irrespective of whether it may, apart from any element of hazard or chance or unpredictable outcome of operation also sell, deliver, or present some merchandise, indication of weight, entertainment, or other thing of value.

Cal. Penal Code § 330b(d). California courts have observed that the plain text of this statute sets forth three key elements: payment, chance, and prize. See People ex rel. Green v. Grewal, 61 Cal. 4th 544, 564, 189 Cal. Rptr. 3d 686, 352 P.3d 275, 286 (2015). First, the machine or device must be activated by “the insertion of money or [some] other object.” Trinkle v. Cal. State Lot tery, 105 Cal. App. 4th 1401, 1410, 129 Cal. Rptr. 2d 904, 910 (2003) (Trinkle 2). Second, “the operation of the machine [must be] unpredictable and governed by chance.” Id. Third, “by reason of the chance operation of the machine, the user may become entitled to receive a thing of value.” Id.

In Mason v. Machine Zone, 140 F.Supp.3d 457 (D. Md. 2015), the Court evaluated whether un der California law, a gambling function within a video game violated California law. The Court held that it did not and explained that virtual items are not considered “things of value.” Id. at 463.

In Colvin v. Roblox, a recent case from the Northern District of California, the court considered whether “Robux,” the in-game currency used on the Roblox platform, constituted a “thing of value” under California law. 2024 WL 1268420, at *1 (N.D. Cal. Mar. 26, 2024). The court concluded that Robux did qualify as such, reasoning that the currency could be exchanged for in game experiences that held subjective value to the player.

The Firm opines that Colvin is not dispositive or broadly applicable to the legality of the Developer’s Gold Coin Games. Several key factors support this conclusion:

1. Colvin involved a fact-specific inquiry, particularly focused on minors’ use of the platform and Roblox’s monetization practices.

2. The court’s language does not establish new precedent or alter the legal framework governing virtual currency in California.

3. Importantly, the court dismissed the majority of the plaintiffs’ claims, signaling judicial reluctance to broadly define virtual currency as a per se “thing of value.”

Absent controlling authority from the California Courts of Appeal or Supreme Court, Colvin does not overrule or displace the substantial body of case law from California holding that virtual currency not redeemable for real-world value does not constitute a “thing of value” under state gambling statutes.

For instance, in Ochoa v. Zeroo Gravity Games LLC, the U.S. District Court for the Central District of California considered claims brought against a mobile social casino platform, alleging vi olations of California Penal Code § 330b, which prohibits certain gambling devices. 2023 WL 4291650, at *5 (C.D. Cal. May 24, 2024). The plaintiff asserted that the platform’s chance-based reward of additional gameplay constituted an illegal gambling device.

The court denied the motion to dismiss, allowing the plaintiff’s claim to proceed. However, this decision must be understood within its procedural posture:

– The ruling was issued at the pleading stage, not on the merits;

– The court was required to accept all allegations in the complaint as true, construe them in the light most favorable to the plaintiff, and resolve all doubts in the plaintiff’s favor; – The court’s express language—“[f]or present purposes”—makes clear that the ruling was not a final determination on liability or legality.

Notably, the court noted that among other things, plaintiffs “might have difficulty” establishing that the virtual coin rewards were a qualifying prize for purposes of gambling statutes.

Additionally, the Zeroo Gravity court recognized the reasoning in the Machine Zone decision, which held that software-only products, lacking a hardware component, do not fall within the scope of Penal Code § 330b. California courts interpreting § 330b have consistently required

both software and hardware elements to qualify a system as a gambling “machine, apparatus, or device.”

The Zeroo Gravity court also cited out-of-state authority declining to apply California’s gam bling statutes to software-only gaming products—further underscoring the limited reach of the opinion.

The Developer’s Gold Coin Games and Sweepstakes Coin Games are not implicated by the reasoning in Colvin or Zeroo Gravity, for the following reasons:

1. No Monetary Value or Redemption: Gold Coins cannot be redeemed for real-world money or items. Their use is limited to entertainment-based gameplay and holds no extrinsic market value.

2. No Consideration or Gambling Reward: The platform does not offer cash or merchandise prizes in exchange for Gold Coins. The Sweepstakes Coin Games, which do offer potential re demption for value, are separately structured and accessed exclusively via free promotional methods or AMOE.

3. No Hardware Component: As established in Machine Zone, a core element of liability under § 330b is the use of a physical device. The Developer’s contests are purely software-based and run on users’ personal devices, without any dedicated or proprietary hardware component. The Developer’s model falls outside the scope of the statute.

4. Consistent Industry Practice: Other similarly situated operators continue to offer comparable sweepstakes and social casino platforms to California residents without restriction. The Firm is not aware of any enforcement actions initiated by the California Attorney General, Bureau of Gambling Control, or local prosecutors targeting platforms operating under the same structural and legal safeguards as the Developer.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

4. Colorado

“(2) “Gambling” means risking any money, credit, deposit, or other thing of value for gain con tingent 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, over which the person taking a risk has no control…

Colorado Rev Statutes § 18-10-102.

A prize is “a gift, award, gratuity, good, service, credit or anything else of value, including a thing for gain.” § 18-10.5-102.

However, “free or additional gameplay” is expressly excluded from the definition. Id. The Gold Coin Games do not involve the player staking or risking anything of value to play virtual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may purchase additional virtual coins for the privilege of continued entertainment.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

5. Florida

In Florida, “[w]hoever plays or engages in any game at cards, keno, roulette, faro or other game of chance, at any place, by any device whatever, for money or other thing of value.”

Fla. Stat. Ann. § 849.08 (West)

The “prize” element of the definition must be “money or other thing of value.” As defined by the Florida Supreme Court, “prize” means money, property of any kind, or any other thing of value, or anything that could be exchanged for something of value, or to obtain a credit of value.

In re Standard Jury Instructions in Crim. Cases–Rep. No. 2016-02, 199 So. 3d 234, 244 (Fla. 2016).

The Gold Coin Games can be played for free, or a player may skip the waiting period and purchase Gold Coins to play the virtual games that Developer offers.

However, any payout, prize, or reward that a player “wins” in the virtual games have no value outside the game and does not meet the definition of prize – because it is not “money, property of any kind, or any other thing of value, or anything that could be exchanged for something of value, or to obtain a credit of value.”

6. Georgia

Georgia prohibits “gambling,” which occurs when a person makes a bet upon the partial or final result of any game or contest or upon the performance of any participant in such game or contest. Ga. Code Ann. § 16-12-21(a)(1).

A ”bet” is “an agreement that, dependent upon chance even though accompanied by some skill, one stands to win or lose something of value.” Ga. Code Ann. § 16-12-20.

“Gambling device” is likewise defined in terms of winning something of value.

(2) “Gambling device” means:

(A) Any contrivance which for a consideration affords the player an opportunity to obtain money or other thing of value, the award of which is determined by chance even though accompanied by some skill, whether or not the prize is automatically paid by contrivance;

(B) Any slot machine or any simulation or variation thereof;

(C) Any matchup or lineup game machine or device, operated for any consideration, in which two or more numerals, symbols, letters, or icons align in a winning combination on one or more lines vertically, horizontally, diagonally, or otherwise, without assistance by the player. Use of skill stops shall not be considered assistance by the player; or

(D) Any video game machine or device, operated for any consideration, for the play of poker, blackjack, any other card game, or keno or any simulation or variation of any of the foregoing, including, but not limited to, any game in which numerals, numbers, or any pictures, representations, or symbols are used as an equivalent or substitute for cards in the conduct of such game.

Ga. Code Ann. § 16-12-20(2).

In Childs v. State, the Court of Appeals concluded that pinball machines that did not payout any “prize, money or any other thing of value” were not “gambling devices.” Childs v. State, 70 Ga. App. 99, 27 S.E.2d 470, 472 (1943)

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game – thus, in the Firm’s opinion, the virtual coins are not “something of value” and the social casino Gold Coin games are not “gambling.” It is further the opinion of the Firm that games played on one’s phone or computer are not “gambling” devices, as the statutory definition contemplates physical machines, and the “catch all” provision of (2)(A) requires “an opportunity to obtain money or other thing of value,” which is absent from the Games.

7. Hawaii

Hawaii defines gambling as: “a person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.” Haw. Rev. Stat. Ann. § 712-1220 (emphasis added). The Gold Coin Games do not involve the player staking or risking anything of value to play virtual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may purchase additional virtual coins for the privilege of continued entertainment.

Additionally, Hawaii requires that the “prize” element be “something of value.” Here, the Firm opines that the additional Gold Coins do not constitute “something of value” under state law, as they cannot be exchanged or cashed out for any money or other representations of value.

8. Illinois

(a) A person commits gambling when he or she:

(1) knowingly plays a game of chance or skill for money or other thing of value, unless excepted in subsection (b) of this Section;

720 Ill. Comp. Stat. Ann. 5/28-1

In Phillips v. Double Down Interactive LLC, 173 F. Supp. 3d 731, 741 (N.D. Ill. 2016), the Court held that winnings in “virtual chips” were not things of value for the purposes of Illinois law. The Gold Coin Games do not involve the player staking or risking anything of value to play virtual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may purchase additional virtual coins for the privilege of continued entertainment.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

9. Indiana

“(d) “Gambling” means risking money or other property for gain, contingent in whole or in part upon lot, chance, or the operation of a gambling device”

Ind Code Ann 35-45-5-1

In Tinder v. Music Operating, Inc., 237 Ind. 33, 53; 142 N.E.2d 610 (1957), the Court evaluated whether awards of free games were “something of value.” The Court concluded that they were not, so long as they were not exchangeable by players for cash or other things of value. The Gold Coin Games do not involve the player staking or risking anything of value to play vir tual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may pur chase additional virtual coins for the privilege of continued entertainment.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

10.Iowa

“Gambling means any activity where a person risks something of value or other consideration for a chance to win a prize.” Iowa Code 99B.1(16)

In State v. Doe, the Supreme Court of Iowa set out the test that whether something is a “gam bling device” depends on its intended use – for gambling or for amusement. 46 N.W.2d 541, 544

(Iowa 1951). Here, the Gold Coins cannot be used for “gambling” as players purchase Gold Coins solely for entertainment – not for any other purpose, such as in hopes of monetary gain.

One case that must be addressed is State v. Wiley, 3 N.W.2d 439 (Iowa 1941), where the Iowa Supreme Court considered whether a pinball machine constituted a gambling device where a player, upon inserting five cents, could obtain additional free games upon achieving a certain score. The Court emphasized that “amusement is a thing of value,” reasoning that such amusement is commercially viable and, thus, subject to valuation. It further held that awarding additional amusement through free play, when conditioned upon chance and not additional consideration, satisfied the elements of gambling: prize, chance, and consideration.

The Court in Wiley based its reasoning on cases from Alabama, Wisconsin, and Texas—jurisdictions which, at the time, recognized that “free replays” on pinball machines²could constitute a “thing of value.” See:

– State ex rel. Green v. One 5 Cent Fifth Inning Base Ball Machine, 3 So. 2d 27 (Ala. 1941); – City of Milwaukee v. Burns, 274 N.W. 273 (Wis. 1937);

– Broaddus v. State, 150 S.W.2d 247 (Tex. Crim. App. 1941).

However, each of these jurisdictions has since departed from that view. For example:

– In Alabama, the court in Holley v. State, 542 So. 2d 952, 953 (Ala. Crim. App. 1989), held that a machine awarding only points redeemable for extended play was not a gambling device, as it lacked the ability to deliver or eject something of independent value.

– In Wisconsin, the appellate court in Quick Charge Kiosk LLC v. Kaul, 288 Wis. 2d 525 (Wis. Ct. App. 2019), reaffirmed a statutory framework under which free play, by itself, did not constitute something of value under Wis. Stat. § 954.01(3)(a).

²Note that until the invention of controllable flippers in 1948 that allowed a player to direct the ball, pinball ma chines were widely considered gambling machines due to the random nature of the ball’s trajectory and outcome.

– In Texas, the current statute, Tex. Pen. Code Ann. § 47.01(9), explicitly excludes amusement devices that provide only replay opportunities from the definition of gambling devices.

While the Gold Coin Games are not intended to facilitate or promote gambling activity, Wiley is further distinguishable, and in the opinion of the Firm Wiley does not apply to prohibit the Gold Coin Games:

1. Absence of Consideration: Participation in Gold Coin Games is not conditioned upon any re quired payment. Users may obtain Gold Coins through free promotional means, and the platform provides additional free Gold Coins when balances are depleted (refill feature). Consequently, the element of price or consideration, as contemplated in Wiley, is absent.

2. No Redeemable Value: Gold Coins are not redeemable for cash, merchandise, or any form of real-world value. They are used solely for entertainment purposes on the platform and cannot be exchanged for anything outside the game environment.

3. Outdated and Isolated Authority: The Wiley decision is now over 80 years old and has not been reaffirmed or extended by more recent Iowa case law. Moreover, the jurisdictions upon which Wiley relied have since abandoned the notion that replay or continued amusement constitutes a “thing of value” in the gambling context.

4. Digital Context Not Addressed in Wiley: There is no Iowa case law addressing digital or online platforms offering amusement-only gameplay without the opportunity for monetary re ward. Given the shift in judicial interpretation in other states, it is unlikely that Iowa courts would extend Wiley to encompass non-redeemable virtual currency on digital platforms that do not involve real-world rewards or things of value.

Additionally, it is relevant to note that competitor social casino platforms continue to operate in Iowa, and to the Firm’s knowledge, no regulatory enforcement action has been initiated by Iowa gaming or consumer protection authorities against those operators.

In light of the above, it is the Firm’s opinion that the Developer’s Gold Coin Games are permissible under Iowa law. Although State v. Wiley remains good law in Iowa, its holding is based on dated precedent that has since been explicitly rejected in the very jurisdictions upon which it re lied. The unique features of the Developer’s platform—namely, the lack of monetary consideration, the non-redeemable nature of the in-game currency, and the clear promotional framework—

support the conclusion that the Gold Coin Games do not involve a “thing of value” as contemplated by Wiley.

Based on this analysis, the Firm opines that the Gold Coin Games do not involve the player staking or risking anything of value to play virtual slots. Players are able to play virtual slots for free and without the payment of any consideration. If a player decides to continue playing after their initial coins are depleted, they may purchase additional virtual coins for the privilege of continued entertainment.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

11.Kansas

“(a) “Bet” means a bargain in which the parties agree that, dependent upon chance, one stands to win or lose something of value specified in the agreement.

Kan Stat Ann 21-4302

Kansas courts do not consider free replays to constitute “something of value.” Games Mgmt., Inc. v. Owens, 233 Kan. 444, 449; 662 P.2d 260 (1983) (holding that a machine offering only free replays as a prize does not offer “something of value” and is therefore not a gambling de vice.)

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

12.Louisiana

(a) Gambling is the intentional conducting, or directly assisting in the conducting, as a business, of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit.

La. Rev. Stat. Ann. § 14:90

Under Louisiana law, the term “prize” is defined as “any gift, award, gratuity, good, service, credit or anything else of value which may be transferred to another person.” The statute excludes “free or additional play or intangible or virtual prizes that cannot be converted into money or merchandise.” §14.90.7.

The virtual coins (whether received for free or purchased) are not “staked,” “risked,” or “wagered.” Once the virtual coins are purchased, they cannot be cashed out or exchanged or used for anything other than continued gameplay.

13.Maine

Under Maine law, gambling is defined as follows: “A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.” 17-A Me. Rev. Stat. § 952(4).

“Something of value” means:

A. Any money or property;

B. Any token, object or article exchangeable for money, property, amusement or entertainment; or

C. Any form of credit or promise directly or indirectly contemplating transfer of money or property, or of any interest therein.

Me. Rev. Stat. tit. 17, § 1831.

“Tokens” is defined as “distinctive objects, chips, tickets or other devices of no intrinsic value used as a substitute for cash in accounting for revenue from a game of chance.” Id.

The additional Gold Coins that are won by a player are not “Something of value.” They are not any money or property, or any “credit or promise.” Further, the definition of “token” makes it clear that the statute refers to physical objects – as opposed to purely electronic virtual coins that are used in the Developer’s Gold Coins Game.

14.Massachusetts

Neither “gaming” nor “gambling” are statutorily defined, but judicial decision establish that the two terms are synonymous and refers to a game where “the element of chance was inherent and predominated, and the element of skill was infinitely small, if present at all.” Commonwealth v. Theatre Advert. Co., 286 Mass. 405, 406, 190 N.E. 518, 519 (1934).

Further, the Court stated that for the game to constitute illegal gambling, the result requires the player to obtain “money or property having any value.” Id.

Virtual chips or coins are not “money or property” and do not have any value.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

15.Minnesota

Minnesota uses the term “bet” and “gambling” to mean the same thing.

“A bet is a bargain whereby the parties mutually agree to a gain or loss by one to the other of specified money, property or benefit dependent upon chance although the chance is accompanied by some element of skill.” Minn. Stat. Ann. § 609.75(2).

The award of free play (additional plays) is expressly excluded from the definition of “gambling” and additional plays are not considered “things of value.” § 609.75(4).

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

16.Missouri

“(3) “Contest of chance”, any contest, game, gaming scheme or gaming device in which the out come depends in a material degree upon an element of chance, notwithstanding that the skill of the contestants may also be a factor therein;

Mo Ann Stat 572.010

Missouri courts have held that free replays are not “something of value” for the purposes of the gambling analysis. In re Omega Brand, 676 S.W.2d 292, 294, (Mo. Ct. App. 1984).

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

17.New Hampshire

“(d) “Gambling” means to risk something of value upon a future contingent event not under one’s control or influence, upon an agreement or understanding that something of value will be received in the event of a certain outcome. For the purposes of this subparagraph, the phrase “something of value” shall include a sweepstakes ticket or other item obtained in conjunction with the purchase of goods or services that entitles the holder to a share or chance in a sweep stakes where, but for the opportunity to enter the sweepstakes, the value of purchased goods or services is insufficient to justify the purchase or the inducement to purchase the goods or ser vices is the opportunity to play on a gambling machine.”

“(e) “Gambling machine” means any device or equipment which is capable of being used to play sweepstakes or games of chance and which discharges money, or anything that may be ex changed for money, cash equivalent, debit card, merchandise credit card, or opportunities to enter sweepstakes or play games of chance, or displays any symbol entitling a person to receive such a prize.”

NH Rev Stat Ann 647:2

N.H. Rev. Stat. Ann. § 647:2(II)(d) clarifies that “something of value” includes an “item” with a tangible value. Nothing under New Hampshire law implies that “something of value” includes free games.

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

18.New Mexico

“Bet” means a bargain in which the parties agree that, dependent upon chance, even though ac companied by some skill, one stands to win or lose anything of value specified in the agreement.

NM Stat Ann 30-19-1

“Anything of value” is not defined in New Mexico. However, in the consideration context, where there is nothing paid, there is no consideration. See State of N.M., ex rel. NM Gaming Control Bd. v. Ten Gaming Devices, 128 N.M. 426, 431; 120 P.3d 848 (2005) (“[N]o ‘consideration’ was paid to Owners to play a machine so there is no ‘gambling device’ as defined in the Criminal Code.”)

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

19.North Carolina

In North Carolina, “gambling occurs when any person or organization that operates any game of chance or any person who plays at or bets on any game of chance at which any money, property or other thing of value is bet.” N.C. Gen. Stat. Ann. § 14-292.

Thing of value is not defined. However, in the context of consideration, the term means some sort of real money or something that is capable of conversion into real value. See Animal Prot. Soc. of Durham, Inc. v. State, 95 N.C. App. 258, 267–68; 382 S.E.2d 801, 80607 (1989).

Any payout, prize, or reward that a player “wins” in the virtual slot machine games have no value outside the game.

20.Oklahoma

Any person who bets or plays at any of said prohibited games, or who shall bet or play at any games whatsoever, for money, property, checks, credits or other representatives of value with cards, dice or any other device which may be adapted to or used in playing any game of chance or in which chance is a material element, shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than Twenty-five Dollars ($25.00), nor more than One Hundred Dollars ($100.00), or by imprisonment in the county jail for a term of not less than one (1) day, nor more than thirty (30) days, or by both such fine and imprisonment.

Okla. Stat. tit. 21, § 942.

Examples of “gambling” in 21 O.S.Supp.2019, § 941 are “poker, roulette, craps or any banking or percentage, or any gambling game played with dice, cards or any device.”

“Lottery” is defined under Oklahoma law as:

21 O.S.Supp.2019, § 1051(A).

There is no authority regarding what “something of value” is under Oklahoma law. However, “consideration” “consideration” is “anything which is a commercial or financial advantage to the promoter or a disadvantage to any participant”, but “mere registration without purchase of goods or services” is not consideration. Okla. Stat. tit. 21, § 981.