Is Dubli a Scam and Are the Auctions Considered Gambling?
| Posted in DubLi Training | Posted on 15-10-2009
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Many DubLi business associates have raised the concern about the DubLi auctions being compared to gambling. This post should debunk any of these claims with a closer look at U.S. Gambling law.
Gambling requires three distinct elements: 1) Chance, 2) Consideration and 3) Prize. Let’s look at each of these more closely.
1) – CONSIDERATION:
Consideration strictly refers to money in American Gambling Law. The money must be put at risk and the player gets nothing in return for that money, other than the chance opportunity to win a prize. The subject must also stand to lose the money permanently for no gain.
The Standard Auction Model: Traditional auctions are void of the “consideration” element in the gambling sense, since the auction ends with the highest bidder gaining the right to purchase. Once the winning bidder pays the matter is resolved, as is the case in a reverse auction. Today, numerous Fortune 1000 companies utilize the “ordinary” reverse auction with their vendors.
The DubLi Auction Models: In DubLi’s Express Auction and Unique Bid Auction, a customer expends one 80 cent credit to view the price and not to purchasing a chance to buy. The non-refundable credit represents the consideration element The Express Auction features prices continually dropping 25 cents with each “show price” click until the customer decides to click “buy now”. The Unique Bid Auction winner is the only customer to bid the lowest unique 25-cent increment price.
2) – CHANCE:
US Gambling Law states that “chance” equates to an event resolving by a random occurrence completely independent from the participant’s influence. DubLi does not exhibit this level of chance since the resolution is strictly dependent on the customer’s (participant) conduct. In either DubLi auction, if no one clicks on Show Price, then the price never drops and there is no resolution to the auction. Therefore, by definition, there is no random influence acting outside the control of the participants.
3) – PRIZE:
Once again US Gambling Law defines “prize” as anything of value. This is the only element that DubLi Auctions have in common with Gambling. The evidence of this is obvious since customers are rewarded with brand new (often luxury) items such as computers, designer clothes or gift certificates.
In conclusion, the DubLi auctions cannot legally be considered games of chance and therefore do not rise to the level of gambling. Please comment below with your thoughts or questions.
