| For a transaction between two parties or two | | | | In US Gambling Law, the element of chance means |
| entities to be considered gambling, there must be 3 | | | | that a given event is resolved by a random |
| separate and distinct elements present: 1) Chance, 2) | | | | occurrence which is not under the control of any of |
| Consideration and 3) Prize. I will cover all three | | | | the participants. For example, if an individual |
| elements as the pertain to the Dubli Online Auctions | | | | purchases a lottery ticket, skill will have nothing to do |
| 1) - CONSIDERATION: | | | | with outcome. The participant either picks the winning |
| In contract law consideration, when referred to in | | | | number or they don't. In other words, it is merely by |
| general terms, may mean anything of value. This | | | | chance that the participant either picks the winning |
| could include anything from money to giving up the | | | | number or they don't. |
| right to a future obligation or even a future act. | | | | In addition, for the element of chance to be present, |
| However, in American Gambling Law, consideration | | | | it makes a difference if the person placing a bet is a |
| refers strictly to money. The money must be put at | | | | participant in the event. For example, if two men are |
| risk in the transaction, and the player gets nothing in | | | | playing a game of chess, and they both agree the |
| return for his or her money, other than, the | | | | looser of the match has to pay the winner $30 that |
| opportunity to win a prize, determined only by | | | | is not considered gambling. If however, two |
| chance. In addition, he or she must also stand to lose | | | | onlookers place a bet of $30 on the outcome of the |
| the money permanently for no gain, services or | | | | chess game; that is considered gambling because the |
| goods in return. | | | | outcome of the match is not under the control of |
| The Standard Auction Model: In any traditional auction | | | | either of the onlookers. |
| the element of "consideration" does not exist in the | | | | In the case of DubLi, the element of chance does |
| gambling sense. At the end of the auction the highest | | | | not rise to the level required to be considered |
| bidder gains the right to purchase the item or items | | | | gambling. In the case of the DubLi Express Auction |
| being auctioned. Once the winning bidder pays for the | | | | the resolution of the event is not dependent on |
| item, the matter is resolved; assuming he or she can | | | | some random occurrence. Rather the resolution is |
| actually make the payment. The same is also true an | | | | strictly dependent on the conduct of the participant. |
| "ordinary" reverse auction. There are numerous | | | | The price of a given item is decreased only by the |
| examples of Fortune 1000 companies' utilizing the | | | | actions of the participants. If for some reason no |
| "ordinary" reverse auction with their vendors. | | | | one clicks on Show Price, then the price never drops |
| Companies such as IBM, for example, have used | | | | and there is no resolution to the auction. |
| reverse auctions in the past. | | | | The "Unique Bid" Auction is very much in the same. A |
| The DubLi Auction Models: DubLi operates two | | | | participant's success in placing a winning "unique bid" |
| auctions in their North American Market; the Express | | | | has nothing to do with anything other than the |
| Auction and the Unique Bid Auction. In the express | | | | efforts of the active participants in the auction. More |
| auction a consumer, in order to see the current price | | | | than one participant may place an identical bid, but |
| of a item, must expend one dubli credit, or 80. Here | | | | this is not caused by any random event. |
| the consumer is not actually purchasing a chance to | | | | The element of chance, as defined in American |
| buy; they are merely paying for the right to view the | | | | gambling law, is minimal if not nonexistent. Although |
| current price of an item. Dubli does however, | | | | the outcome of a given reverse auction is not under |
| guarantee the consumer that the initial start price of | | | | the control of any one participant, the combined |
| that particular item is the lowest price they can find | | | | actions of all of the participants is the only input that |
| anywhere online. In addition, all of the items in the | | | | can affect the final result. Therefore by definition, |
| auctions are brand new brand name and fully | | | | there is no random dispositive influence acting outside |
| warranted by the manufacturer. | | | | the control of the participants. |
| Each time a consumer clicks on the "Show Price" | | | | 3) - Prize: |
| button, the price of the item drops 25. Therefore, | | | | Again, in US Gambling Law, the definition of "prize" |
| the price of the item continues to go down until | | | | means essentially anything of value. Because the |
| someone decides they like the price and they click on | | | | purpose of participation is to obtain valuable items |
| the "Buy Now" button. | | | | such as iMacs or even brand new luxury cars at |
| In the Unique Bid Auction, the participant must | | | | substantially reduced prices is the whole point of |
| expend an 80 cent credit in order to place a bid. In | | | | participating in Dubli's reverse online auctions, the |
| both auctions, the participant is spending an 80 cent | | | | element of price is obviously present. |
| credit to either check a price or to place a bid, and | | | | In conclusion, because the element of chance, as |
| once that credit has been spent there is no refund | | | | defined in American gambling law, is not present in |
| possible. So in that sense, the element of | | | | the Dubli auctions, these online auctions cannot be |
| consideration is present in the DubLi online auctions, | | | | considered either games of chance or lotteries and |
| both in the Express and the Unique Bid. | | | | therefore do not rise to the level of gambling. |
| 2) - CHANCE: | | | | |