EDITORIAL
I know it when I see it!
If it walks like a duck, swims like a duck, and quacks like a duck, then it is probably a duck. You are certainly familiar with the abductive logic reasoning in the Duck Test. It is used to argue that a subject or phenomenon can be identified by observing its common characteristics and behaviors. In other words: It is what it appears to be! Lootboxes, prediction markets, prize draws. Even the provisioning of platform services. It is the gambling duck! Sometimes these characteristics may be so seemingly present (or absent!) that it is tempting to make conclusions even in the absence of a precise definition. US Supreme Court Justice Potter Steward famously argued in his concurring opinion in Jacobellis vs Ohio (1964) that criminal obscenity laws – that would effectively limit free speech – were permissible only when applied to “hard-core pornography”. He explained “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description, and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.” Even in the presence of a precise definition of ‘gambling’ though, things may effectively turn out to be ambiguous and obscure. Hence, we need to take a close look at each specific case and not miss the trees for the forest.
Accordingly, in this issue, several articles look at specific examples of law in action. In the US, Elon Musk’s political action committee launched a high- profile prize draw offering lucky winners the chance to “win” US£1 million. Under the Duck Test, it appears to be waddling, swimming and quacking but Mark Balestra concludes that the courts are likely to see things differently. Another high-profile case occupying time in the US courts is that of Kalshi, which is continuing to argue that its Prediction Market offers do not constitute sports betting even though its marketing efforts allude to it. Daniel McGinn provides an analysis on cases from the district and appeals courts in New Jersey, Nevada and Maryland and concludes that a lot of water is likely to pass under that particular bridge before it is resolved. The outcome of such cases is regularly of vital importance for the company’s product or services. If the courts qualify the offer as ‘gambling’, it will usually become either illegal or subject to substantial regulatory requirements. By contrast, staying beyond the regulator’s reach may dramatically reduce legal risk, licensing costs and compliance burden. If, as in the Kalshi case, the company can demonstrate that it is operating legally, it potentially opens up US states which currently do not permit sports betting. Two of those – Texas and California – alone represent huge untapped markets for which it may be worth paying high legal fees in court proceedings.
SIMON PLANZER PHD Editor in Chief IMGL MAGAZINE
Contents 6
The forbidden Apple: liability of online service providers in Europe Federation vs States vs Municipalities: Brazil’s Supreme Court weighs in
12 20 24 32 38 42 46
State of play: Prediction Markets
Recent regulatory developments in Spain Is Elon Musk’s “Earn a Prize” an illegal lottery?
Argentina: could weak enforcement of the law endanger a regulated ecosystem?
DFS and Sweepstakes in California
Winning hearts and minds: how the gambling industry can influence the push for tighter regulations and higher taxes
50
IMGL autumn conference: all roads lead to Lisbon
PAGE 4
IMGL MAGAZINE | JUNE 2025 IMGL MAGAZINE | SEPTEMBER 2025
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