Gambling remains a contentious issue for both individuals and governments alike. Nonetheless, numerous state and federal laws have been passed that regulate this activity.
Gaming law refers to the rules and regulations that govern games of chance, such as lottery tickets and casinos. While these laws differ from jurisdiction to jurisdiction, they usually address legality, regulation, taxation and advertising related to gaming activities.
Legality
Legality of gaming is a complex area of law and it varies from state to state. This encompasses state-run lotteries, gambling on Native American trust lands and other forms of gambling.
Some games require skill, while others solely depend on chance. It is essential to recognize this distinction when determining if an activity should be classified as gambling or not.
Legality of games varies, but all play must adhere to certain guidelines in order to avoid being classified as gambling. Courts will not tolerate games where participants have no right to a prize, have been duped by fraud or where the play runs counter to public policy.
In addition to common law, state and federal laws also regulate gaming. In the United States, illegal gambling is a federal offense. Furthermore, state governments have regulatory boards that oversee gaming operations.
Regulation
Laws and regulations that pertain to the gaming industry encompass prohibition or restriction of gambling activities as well as regulations for operating gambling establishments.
Gaming laws can differ between jurisdictions and are usually set forth by state legislatures. They may also be enforced by the federal government or tribal governments.
In addition to these comprehensive laws, state governments often pass additional rules and regulations related to gambling. These may cover topics such as responsible gaming, alcohol consumption, gaming addiction, child support obligations and gambling debts.
Laws and regulations affecting gaming companies and casino operators can have a substantial effect on their financial condition, as well as the outcomes of their operations. They may also influence public perceptions and publicity around the gaming industry.
Taxes
Governments often impose taxes on gaming, such as sales and excise duties, at either the federal, state or local level.
Taxation takes many forms and depends on the nature of a property, activity or income. Common taxes include income taxes, sales taxes and other excise duties.
Taxes are generally levied against real property and tangible personal property (TPP). TPP includes business equipment, machinery, inventory, furniture, and automobiles.
The Trans-Pacific Partnership (TPP) encompasses intangible property such as intellectual property. Although the TPP tax system accounts for a relatively small share of total state and local tax collections, it is complex, nonneutral, and favors certain industries over others.
The globalization of eSports and online gaming presents game companies with unique tax challenges. While they may be based in one country, they often hire talent from around the globe to develop and distribute their titles. As a result, these firms may owe taxes in other countries and must understand their tax implications.
Advertising
Advertising is a multifaceted phenomenon, deeply intertwined with society, culture, history and the economy. It provides new information, motivates behavior change, persuades others and sometimes even sells messages.
In-game advertisements (IGAs) are on the rise, with many video games now including them into their gameplays. This can take the form of pop-up messages, cut scenes, on-screen adverts, billboards and background displays.
In the United States, advertising is heavily regulated. Laws such as “truth in advertising” and “fairness in advertising” set limits on what can be said through advertisements.
Free-to-play video games often incorporate advertising into the experience as a means of generating revenue. However, these claims must be truthful and not deceptive or unfair to players.
In-game advertising presents advertisers with the unique chance to reach a broad and diverse gaming audience. But, as with any channel, brands must be creative when crafting their approach to gaming content and understand how gamers play the game.
