Here's some random thoughts I've had regarding no-purchase-necessary poker. While the preexisting marketplace of such subscription-based sites has not produced something that most serious poker players would be interested in, the current post-Black Friday landscape could give the economic incentives for a new US-serving poker business to emerge with some innovations that could better emulate the experience of real online poker.

Some of these ideas are based on stuff that some of the other forum regs have posted elsewhere, but it's all been a blur, so I apologize for not giving credit where credit is due. I just thought it would be good to get everything into one thread, where perhaps we can brainstorm and get some ideas moving, or shoot down those that would definitely be infeasible. I'm not a lawyer and I don't know what ideas would have any chance of explicitly satisfying US law.

Perhaps tl;dr but hopefully the ideas with the most merit will get sorted out quickly.

----------------------------------------------------

First of all, from what I've read (I'm not personally familiar and others can elaborate), current subscription-based sites like ClubWPT are operating in the US in an explicitly legal way because of two factors:
1) All tournaments are no-purchase-necessary, because players who have not paid the monthly membership fee can get tournament entries by mailing in postcards or something
2) Tournaments have fixed prize pools which do not vary based on the number of players.

I'm not that familiar with sweepstakes law, but are both #1 and #2 necessary? It seems like #1 alone is enough to make such operations "not gambling"; gambling needs chance, consideration, and prize, and no-purchase-necessary eliminates consideration. Maybe existing subscription sites have adhered to #2 just to be safe, but it seems that a membership-based site that was able to offer prize pools proportional to the number of entrants could much more closely resemble a real poker site with a real poker economy, and thus be a possible option for serving the current US market. Is there a reason this can't happen?

----------------------------------------------------

ClubWPT allegedly offers single-table tournaments in addition to multi-table tournaments. If they can offer a sit-and-go with a fixed prize pool for an expected 9 entrants, and if they can both prevent a 10th player from entering and prevent the tournament from starting until a minimum of 9 players are registered, then this seems to violate #2 above. (The language in the rules they linked doesn't explicitly say that they are actually able to cap the entrants in a sit-and-go, so maybe they do technically have to allow more than 9 people into what they would like to be a 9-player sit-and-go.) So, is a membership site with no-purchase-necessary for sit-and-go play allowed? If so, then these are exactly the same as "normal" sit-and-goes.

----------------------------------------------------

If sit-and-goes paying out "points" prizes are OK, why can't sites like this offer cash games? A cash game is just a winner-take-all sit-and-go with blinds that don't increase and with the option for players to quit early and receive the fair value of their chips as a proportion of the total chips in play. Traditional cash games also allow players to rebuy, or to buy in short, or for new players to enter the game after others have quit -- do any of these violate possible sweepstakes rules other than #2? If not, then, perhaps with some creative tweaks, no-purchase-necessary cash game play should be just as legal as no-purchase-necessary sit-and-gos.

----------------------------------------------------

Forget about all of the existing structures; if there's a subscription-based site where a monthly membership fee gets you some number of "points" that you use to enter tournaments of your choosing (and a no-purchase-necessary option is available for these points), can the site let players play cash games with the "points"? Or would that be considered "gambling" because the points are a "thing of value", or something? If #2 can be ignored, then my intuition is that a cash game would be as legal as a tournament, but there may not be a way to structure something resembling a cash game within the confines of #2.

----------------------------------------------------

Taking a further step back from existing subscription models… could membership fees be charged, say, by the day (or even by the hour?) rather than by the month? That is, instead of paying $20/month for a month's worth of entries into tiny-valued tournament entries, how about paying $20/day for a day's worth of entries into what might amount to a few $5 or $10 tournaments? If the membership fee directly coincided with the incidence of the events (such as charging a daily membership fee for a site where one tournament per day was offered), this would effectively be the same as a traditional tournament buyin… does this run afoul of any part of sweepstakes law?

----------------------------------------------------

Here's another angle… would it be legal to have a no-purchase-necessary tournament where those who entered for free would get a smaller starting stack than those who paid? Or is the sweepstakes game legally required to treat each class of entrant symmetrically? (My guess is yes, but just throwing it out there.)

----------------------------------------------------


Basically, my motivation here is that the current subscription-based sites are doing their best to work like "normal poker", but are forced to operate within some constraints that don't necessarily all seem crucial to protecting the interests or intentions of what sweepstakes rules might be, or what no-purchase-necessary options might demand. A new company that was potentially able to innovate or to push the limits of existing laws could be a great boon to the large portion of the US player base whose needs are not suited by ClubWPT and the like.

I look forward to hearing some input from those who are more knowledgeable about how these laws work.

Just a random bump now that stuff has calmed down in this forum a little. There have been some other posts and threads on this topic with some good discussion, but I still wonder if there isn't potentially more here.

Interesting Repulse, I have wondered this myself. What is the key that separates "skill game" sites from the current poker sites and what minor modifications could be made to move poker to an "ok" status in 35-40 states.

Thought about this today, but not in depth. If a site like "ClubWPT" is doing this surely it can be done on a grander scale.

I would write and ask the existing subscription based sites regarding #1 and #2. Who knows, you might get an answer.

Sweepstakes are not defined or authorized by federal law. Their form and legality depend on state laws, but the basics of these laws are fairly uniform state to state. Generally, #1 & #2 are both necessary for legal sweepstakes. #1 is necessary as without it, the sweepstakes would technically be a lottery under federal law and therefore illegal. #2 is necessary per state laws requiring announcement of prizes in advance.

Here are few relevant articles:

Rules For Operation of Contests and Sweepstakes: Legal Guide (for Calif.)

Sweepstakes Law Basics

[PDF] An Introduction To Sweepstakes And Contests Law

You can't limit the number of entrants, so SNGs can't be run as sweepstakes. The current sites run SNGs for points only (points are used for entries to SNGs and MTTs). This is probably legal as a contest to win more play is not considered a sweepstakes or gambling in itself, although this is somewhat a grey area.

Cash games for points could similarly be allowed (as long as the points are only redeemed for more play, i.e. for MTT entries). I'm not sure why the current sites don't have that, so there are probably some other legal nuances that make them risky.

There cannot be any disparity between a free-entry contestant and a paid member contestant. There couldn't be different size starting stacks.

I think a site could have separate daily tournaments, each its own sweepstakes with a seperate membership fee. But there would a lot of difficulties for the site and players trying to implement this. For instance, each tournament would have to have pre-determined prizes (not based on # of entries) and open to all entries. Most of the time, these tournaments would have either too many entries (players lose out because prizes are far less than total entries) or too few entries (site loses because membership fees collected don't cover the prizes). There also may be some legal questions, running multiple sweepstakes from the same software at the same time.

IMO, the current sites are operating in a legal grey area as it is. Trying to make them more like real money poker sites would only put them at greater risk. Note also that sweepstakes must be based on contests of chance. If they were considered contests of skill, they would no longer be sweepstakes under the law.

fwiw: Just a brief search, but I assume WorldWinner doesn't serve these states because they don't allow skill gaming for money or something to that effect.

Very interesting. From everything I just read the biggest difficulty seems to be the prize pool. What if you had the same schedule and they publicly (to try and keep the "theyre cheating us" ppl happy) altered the payouts daily, basically more or less averaging on a rolling scale. Obviously this wouldnt be perfect since you never know if youre going to get an overlay or underlay, especially in the beginning itd be extremely hard to predict; however to the grinders who play the same tournaments nearly daily will, in theory, feel a little better know that the prize pool averages out in the end.

Edit: you would need to make it so that if you have an overlay of $X today you would need to try and make an underlay of that same amount the next day. Sweet on the overlay days, not so much on the underlay days.

Yeah, that's a good idea, I think I will go ahead and ask them. If I hear anything back, I'll post here. Thanks for the info. So it's clear that it's definitely not OK to give the "no purchase necessary" participants a smaller chip stack, and that probably eliminates all related ideas, such as having something like a $0 poker tournament with an optional one-time $100 add-on (for a tremendous amount of chips). That makes sense. I agree that running SNGs for points is likely grey. Cash games might be the same theoretically, but would perhaps attract unwanted attention to this greyness. Yeah, that all sounds about right. As tbremer notes above, it's possible that a site might be able to match pre-announced prizes on some sort of rolling average basis such that it might be palatable enough for players, and a viable enough business model for the sites. At least if such tournaments were attempted on a smaller scale at first. I agree. It definitely looks this way. This alone likely answers all of my questions, as far as practical results are concerned. Unless some new market entrants were willing to be bold and push the grey area. They'd probably need some very solid legal opinions before doing so, as we've seen plenty of aggression from the US on grey issues related to poker.
Yeah, the standard problem with the skill angle seems to apply to the sweepstakes angle as well.

From an economic standpoint, varying prize pools would only be possible if the amount of money coming in varied. From an economic standpoint then, the prize pools have to be fixed to deal with the money coming in pretty much being fixed.

I wish they could have a set prize pool but do payouts based on the actual numbers of players if the number of players is less than the prize pool structure anticipated.

I find it funny that WorldWinner has a lot less blocked states than ClubWPT.

Sorry if some of what I said has been covered by others, but I am posting this several hours after reading the thread.