GME3: D&B Goes Bust, Classroom Clicks Clash, & GME Recognizes GME

In this edition of the GME3, we’re looking at an interesting new initiative from popular arcade/restaurant chain Dave & Buster’s, an impending showdown between Ontario’s Minister of Education and representatives from social media companies like X, Meta, and Tiktok, and the return of Roaring Kitty and rise of GameStop stock (the other GME). Read the full stories here!

Gambling

D&B Goes Bust

At the end of April the popular arcade/restaurant chain Dave & Buster’s announced that they intended to introduce real-time betting on arcade games between friends. The idea was to add functionality to their pre-existing app to allow people to make bets on the results of the games they’re playing with friends in real life. Simon Murray, the senior vice president of entertainment and attractions, said that he believed the initiative would give “loyalty members real-time, unrivalled gaming experiences, and reinforce our commitment to continuing to elevate our customer experience through innovative, cutting-edge technology.”

To achieve this goal, Dave & Buster’s is partnering with Lucra, a company that makes gamification software, including “cash, e-commerce, or cashless contests on partner platforms.” A Lucra representative has said that they plan to place a limit on bets. While they are unable to share the exact number, they have noted that the average bet between users is $10. The companies argue that since the games are skill-based, they will not be subject to the same licenses and regulations gambling operators face with games of chance.

However, it appears that this distinction may not be enough – only two weeks after the announcement several states have come forward against the initiative. Nevada regulators shut down the idea in the state immediately.  Kirk Hendrick, the Chairman of the Gaming Control Board, announced that Dave & Buster’s has agreed to not offer wagering at either of their Nevada locations after the Board took a “hardline stance against unlicensed gaming.” Hendrick went on to explain that the hard stance was because the initiative could have the side effect of promoting underage gambling, as the company has a large base of underage clientele.

Other states have also taken steps to counter the new initiative. In Illinois, Representative Dan Didech, who is also the chairman of the House gaming committee, filed “The Family Wagering Prohibition Act.” This act, which already has 36 co-sponsors, would explicitly prohibit “family amusement establishments” from allowing wagering on their games and ban advertising of the same. Representatives in Ohio and Pennsylvania, while not taking the same hardline stance as Nevada or Illinois, have committed to reviewing the legality of the idea. While they haven’t committed to a specific course of action yet, these state regulators still have “serious concerns” over the new business model.

Media

Classroom Clicks Clash

Ontario’s Minister of Education, Stephen Lecce, has announced that he wishes to meet with social media executives to work out how to reduce distractions and enforce bans on specific apps in Ontario classrooms. This comes as part of the legislation that the Ontario provincial government plans to enact that would give the government powers aimed at cracking down on privacy issues, cyberbullying and age-appropriate internet use.

Lecce will be meeting with representatives from Snapchat, Meta, and TikTok. Among other things, the province is looking for assistance from these companies in how to cut distractions, prevent youth from bypassing age-restricted sites, and stop students from getting around blocks on the apps in places like school wifi networks.

Lecce had this to say in advance of the meeting:

“I look forward to that conversation and I believe that they’re willing to have that conversation in good faith, recognizing we have powers through the legislation, or we will have should the legislation pass, possible authorities to further protect children.”

Ontario recently announced its intention to ban access to all social media on school wifi networks and school-owned devices, while also cutting down on when students are allowed to use their phones.

This approach is clearly distinct from how the school boards are attempting to curb these issues. As we’ve written about previously, 4 Ontario school boards have banded together to sue social media giants like Meta and TikTok. They’re seeking billions of dollars in damages, alleging that these companies have fundamentally changed how youth think and operate, making the jobs of teachers and administrators significantly more difficult.

This suit has not been publicly endorsed by the Ford administration, and Lecce has announced that he plans to take a “different approach” to resolving the issue. We’ll have to see which tactic will be more successful in negotiating with these social media giants.

Entertainment

GME Recognizes GME

In our final story for the week, we’re celebrating the return of an internet micro-celebrity. Roaring Kitty, legally known as Keith Gill, has re-emerged on the internet to, once again, plug GameStop stock. After taking an almost 3-year hiatus from Twitter/X, Roaring Kitty returned to the platform and has been posting consistently since.

For those who aren’t in the know, in 2021 Wall Street hedge funds and major investors were shorting the stock of GameStop (or $GME), believing that its shares would continue on a drastically downward trend. It looked like GameStop was destined to go under until a ragtag group of independent day traders organized on the r/Wallstreetbets Reddit forum altered the trajectory of the company. They bought up thousands of GameStop shares, ballooning the value to an all-time high of over $80 per share in January of 2021 (compared to the trading price of under $5 per share in December 2020). Eventually, the stock crashed and has continued to decline back to a more standard valuation. 

Until now! Roarin Kitty’s return marked a serious uptick in the $GME stock, which is now trading at close to $30 per share. Due to the volatility of the stock, trading was halted 8 times before noon when the markets opened this past Monday. However, we are unlikely to see such an explosive result as the last time $GME was on the rise, as the short position on the stock is significantly less than the 140% of shares that were being shorted last time (a ridiculous number that could only be arrived at due to traders shorting already shorted stocks to build even bigger bets against the company). Even so, we here at GME Law are happy to see another GME get some attention!