James Gatto Discusses Legal Issues With Virtual Currency in Business Models
James Gatto, the leader of Pillsbury's SET Team, recently wrote about the increased trend of using contests, sweepstakes and gambling-like activities in social games and onling media, as creative models in Paybefore Magazine.
A few highlights:
Generating user excitement similar to the feeling of gambling, these strategies aim for balance to avoid crossing the line into illegal activity. While this is often avoided by not allowing a "cash-out" of the virtual currency, the legal issues with virtual currencies and virtual goods are complex, and lead to misunderstandings of what can and cannot be permitted. As these business opportunities continue to become popular, many social game, mobile app developers and companies in the gambling industry, are looking to utilizing them.
An example of a gambling company taking advantage of this new trend is with gambling equipment maker IGT. The company bought Facebook casino games developer, Double-Down for $500 million in January 2012. Many other companies are following in IGT's steps, as the $25 billion online gambling and social media worlds collide.