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Gambling & Gaming - Dispute Resolution

Presented at the Power conference - University of Queensland, November 2011

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Gambling & Gaming - Dispute Resolution

  1. 1. Gambling and Gaming Power relations in dispute resolution Darryl Woodford, / @dpwoodford
  2. 2. BackgroundUndergrad in UK, Postgrad inDenmark -- Games focussed.Between the two worked in the offshoregambling industry.PhD at QUT looking at mechanisms forregulating online environments.
  3. 3. TodayLess theory, more on the practicalimplications of power relationshipsParticularly focused on disputeresolution.How models developed in the offshoregambling industry could be applied toother online environments.
  4. 4. GamblingPost-up: Player deposits money togamble. Can request balance onceconditions met (rollover etc).Credit: Player enters contractual (intheory) agreement to pay after pre-determined period.Recourse varies.
  5. 5. Sources of conflictCompanies ruleset differs from industrynorms (Tennis sets, decided bets inabandonments)Players attempting to exploit mistakes(bonuses, bad lines, chip dumping).Rogue companies refusing to payout(rarely resolved).
  6. 6. Company recourseCredit agencies.Legal action (under certain regimes).Harassment / Threats (commonly seenin US ‘credit’ / ‘local’ bookmakers).Rules are codified, so disputesfrequently handled as if contract.
  7. 7. Player recourseUK: IBAS (Independant BettingArbitration Service), GamblingCommission.AU: State Regulators.Las Vegas: Nevada Gaming Comission.Online: ????Even formal mechanisms aren’t perfect.
  8. 8. IBAS / Totesport
  9. 9. SportsAlive / BetEzyACT Regulated - In theory.Submitted Financial Reports showingthey were solvent as recently as March.Bankrupted in 2011. Account holderstreated as “unsecured creditors”,minimal return predicted. Liquidatorclaims insolvent since 2008.
  10. 10. PowerPower is perhaps mostclosely related to whois holding the $, buteven then recourses areuneven.How might we re-address the balance?
  11. 11. OffshoreBooks based in countries such as:Antigua, Panama, Costa Rica.Targeting US Players, in violation ofWire Act, and now UIGEA. Faceprosecution if return to US (Jay Cohen).Formal regulation ineffective. Playerformed bodies stepped in...
  12. 12. OffshoreEstablished a presence, arbitrated.Reputation-based regulation.
  13. 13. But also a lot of success
  14. 14. How does it work?
  15. 15. How does it work?Re-frames the power relationship. Theseplayer-operated websites, through thepower of Google / reputation, give playersthe ability to share information.In some ways more effective / efficientthan the formalised processes. 1-2 weekoutcome, published results, significant/immediate bottom-line impact.
  16. 16. Failure here too...EnglishSportsBetting - Late 1990s,phone betting outfit just stopped payingBetPanam - Heavily promoted byforums, went all-in on Superbowl (+7.5when market 7). Lost.BetCascade -- This one is still officiallyrunning, they just don’t pay anyone.
  17. 17. GamingVirtual Worlds have much in commonwith offshore gambling. Multi-national. Hard to enforce judgments against operators/players spread worldwide. Lack of clarity around acceptable standards, behavioural norms.
  18. 18. GamingTwo primary sources of conflict: Player norms differ from developer norms (Eve Microtransactions) Players exploit regulatory framework (vs provider, or vs. other players)To consider either, we need to know thenorms (a PhD research objective).
  19. 19. Uneven powerCurrently, companies hold all the cards. Terms normally enable them to close accounts: no appeal, no compensation Ultimately, can (& have) shut down servers at any time (Disney). Is that right when VW’s are “Third place” with significant social capital?
  20. 20. RecoursePlayers have tried through the courts(Bragg vs Linden). Untested.Companies often have costly arbitrationclauses (declared unreasonable inBragg)Argue players require anothermechanism, perhaps in-environment.
  21. 21. Potential SolutionsPlayers & Developers want to avoid top-down systems Hard to implement anyhow multi- nationallyWould a self-governance mechanismsuch as the offshore solution work?