This week in the GME3 we have a report on “at risk” gamblers in Prince Edward Island, a massive lawsuit against Meta launched by several US states, and the potential for Bitcoin to be brought to the stock market. Read the full stories below!
Gambling
Islanders’ Gambling Risk Triples
According to a study conducted for the provincial government of Prince Edward Island, the number of Islanders considered to be “at risk” from gambling has tripled between the years of 2005 and 2019. Over 11,000 people (over 8.6% of the adult population) are at some risk, compared to only 2.8% as reported in a 2005 study.
The study also revealed that people between the ages of 18 and 34 are three times more likely to engage in problem gambling compared to those 55 or older. Furthermore, people who gamble online are 3.6 times more likely to be at risk than those who only gamble in person.
Reactions to the report have been mixed. Green Party representative Peter Bevan-Baker expressed concern over the figures, especially focused on the increased risks that come from online gaming. He went on to say that he hopes that the study’s results will finally put an end to the PEI government’s plans, which have been on indefinite hold since 2021, to launch its own licensed gaming framework through the Atlantic Lottery Corporation (ALC). As he said, “One of the worst places that government should be relying on [for] profit-making is from online gambling, because we know how that is destructive to lives, the lives of Islanders.” Bevan-Baker isn’t alone in his opinion – MPs from all parties in the PEI legislature have expressed opposition to the idea.
Even without registered online gaming in the province, the ALC (much like Ontario’s OLG) has reported a 25% increase in profits over the previous year. Looking at the success story of iGaming Ontario, which we wrote about previously, it’s hard to say whether PEI is making the correct decision. Registered igaming has been a windfall for Ontario, bringing in a significant amount of revenue that was otherwise lost to the grey market. We’ll have to wait and see how the situation evolves in other provinces going forward.
Media
Meta Slammed in State Suits
33 US states have filed lawsuits against Meta, the parent company of popular social media platforms Facebook and Instagram (and Threads), for contributing to the youth mental health crisis by designing features that intentionally addict children to its platforms.
From the official complaint: “[Meta’s] motive is profit, and in seeking to maximize its financial gains, Meta has repeatedly misled the public about the substantial dangers of its social media platforms. It has concealed the ways in which these platforms exploit and manipulate its most vulnerable consumers: teenagers and children.” The suit seeks financial damages and restitution, as well as an end to any practices violating the law.
New York Attorney General Letitia James publicly condemned the company, citing how it contributes to low self-esteem in teenagers. One study cited 13.5% of teen girls saying Instagram makes thoughts of suicide worse and 17% of teen girls saying it makes eating disorders worse. Since nearly all American teens between the ages of 13-17 report using social media, there is a significant number of people being affected negatively by social media use.
Meta responded, stating that it is also committed to providing teens with safe, positive experiences online, but is disappointed that the attorneys general have chosen this approach over collaboration to create clear, age-appropriate standards to protect kids on the internet.
It’s surprising to see these states taking such a hard stance against the actions of big tech companies like Meta and TikTok (which has its own lawsuit ongoing in Utah). These companies have been allowed to operate with relatively little oversight for a long time, and with more crackdowns occurring over privacy and mental health, we wonder how much longer social media will exist in its current form.
Entertainment
OMG, BTC ETF?
Bitcoin is on the rise again, surging 20% in the past week and topping $35,000 for the first time since 2022. The rise is due mostly to a BlackRock exchange-traded fund (ETF) for Bitcoin appearing on a list from the Depository Trust and Clearing Corp (DTCC). To zoom out a bit, a Bitcoin ETF would allow people to buy and sell Bitcoin on the stock market, as opposed to less-regulated (and often sketchy) cryptocurrency trading platforms like FTX.
BlackRock, the largest provider of ETFs in the world, applied in June of this year to register their Bitcoin spot ETF, which is still pending approval. While experts are claiming that the listing in the DTCC shouldn’t be taken as a sign that the ETF is guaranteed to launch, it’s definitely a sign that the company may be preparing to launch it soon.
BlackRock is not the first company to try and launch a Bitcoin ETF – earlier this year Grayscale Investments attempted to launch their own ETF, but was shut down by the SEC. However, in August a panel for the DC Court of Appeals overruled the SEC decision, citing the regulator’s failure to adequately justify the initial rejection. Despite the new ruling and mounting evidence that BlackRock is preparing to launch its ETF, the SEC has not yet approved the new fund.
This has the potential to bring new life to crypto. Since the decline of NFTs, controversies around the legitimacy of trading platforms, and general stigma around the technology, people tend to not take crypto especially seriously. Will a Bitcoin ETF bring legitimacy to cryptocurrencies, or is this just the most recent way to inflate the value for short-term gains? We’ll have to wait and find out.
GME Law is Jack Tadman, Zack Pearlstein, Lindsay Anderson, and Will Sarwer-Foner Androsoff. Jack’s practice has focused exclusively on gaming law since he was an articling student in 2010, acting for the usual players in the gaming and quasi-gaming space. Zack joined Jack in September 2022. In addition to collaborating with Jack, and with a keen interest in privacy law, Zack brings a practice focused on issues unique to social media, influencer marketing, and video gaming. Lindsay is the most recent addition to the team, bringing her experience as a negotiator and contracts attorney, specializing in commercial technology, SaaS services, and data privacy.
At our firm, we are enthusiastic about aiding players in the gaming space, including sports leagues, media companies, advertisers, and more. Our specialized knowledge in these industries allows us to provide tailored solutions to our clients’ unique legal needs. Reach out to us HERE or contact Jack directly at jack@gmelawyers.com if you want to learn more!
Check out some of our previous editions of the GME3 HERE and HERE, and be sure to follow us on LinkedIn to be notified of new posts, keep up to date with industry news, and more!
