I'm a prospective law student currently conducting research on the legality of loot boxes in the United States, and I find Magic the Gathering very relevant. (Reference for Loot Boxes and Booster Packs below). The main debate is whether or not these type of products are illegal lotteries.
The law at question is California Penal Code 319, and specifically the definition of a lottery:
- A lottery is any scheme for the disposal or distribution of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property or a portion of it, or for any share or any interest in such property, upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle, or gift enterprise, or by whatever name the same may be known.
Does this constitute MTG Booster sales (physical sales) as a lottery?
- The definition makes no mention of receiving/losing "value" from any such property, only that you received it by chance. IMO, by purchasing a booster, you have purchased a chance at receiving individual cards on a statistical spectrum (rarity). The chance bit is all that matters, not even the value of the cards. Because there is no mention of inheriting some value, or the ability to obtain a greater monetary value after the lottery, then the argument around not acknowledging the secondary market is negated.
- The definition makes no mention of receiving anything vs receiving nothing, thus the argument of "everyone receives something" is negated
- The definition makes no distinguishment of such property having sole monetary value vs some other intrinsic value such as being able to play a competitive game.
- However, I believe that the nuance in this law is the definition of such property. Does a range of cards on a statistical spectrum of rarity each constitute an individual property vs the booster itself as the individual property? But, couldn't this argument be made about a lottery ticket? Would wizards need to make every card the same rarity and distribute each evenly if this were true? How can we navigate around a booster pack being purchased to receive a chance at some cards?
- One area I find difficult to research is Magic Repacks on eBay. Not sure if anyone has any thoughts on this?
For Magic Arena (electronic version of the game):
- The argument might stand that WOTC does not give up actual "ownership" of the cards, however, in the context of 319, there is no explicit mention of ownership. Only "distribution" of such property. The game aspect may not conceal the fact there exists a purchase of chance within the game.