Game + real-money esports platform launches on shaky ground

game + is coming to Android and iOS app stores today, providing a platform for users to earn (and lose) real money by playing popular video games against friends and strangers. It’s not a new idea, but it represents a collision of heavily regulated markets: video game intellectual property rights, banking services, online privacy, and something very similar to gambling.

Game + co-founders Adam Frank and Karim Sanford have answers to most of these concerns. They say the app is secure because it uses existing financial systems to verify users and encryption to protect card data. They take Game + away from gaming by calling it a skill-based competition platform and only offering it in 38 states in the United States where head-to-head play for cash is allowed. The application geolocates users during registration and each time they take up a challenge with another player.

However, when it comes to securing the rights to Call of Duty, Madden, Fortnite, Mortal Kombat, Apex Legends, Halo, Mario Kart or any of the video game franchises announced by Game +, Frank and Sanford do have no clear answer.

“We didn’t go to businesses, no,” Frank said.

The Game + website features over 50 games, along with the Xbox, PlayStation, and Switch logos. A disclaimer at the bottom of the main page states that the app is not affiliated with (Deep Breath) Apple, Android, Microsoft, Xbox, Sony, PlayStation, Nintendo, Electronic Arts, Activision Blizzard, Valve, Take -Two, Ubisoft, Capcom, Infinity Ward, Gameloft, Epic Games, “or any other company that markets a computer or mobile game.” In the eyes of Frank and Sanford, this disclaimer is sufficient legal protection to continue to advertise Game + on the back of mainstream video game franchises.

“We have obviously looked at these issues and have no doubts that what we are doing here is very permissible,” Frank said.

Overall, the editors disagree.

“The app and service described would constitute a gross violation of Epic’s policies and intellectual property rights,” said a spokesperson for Fortnite Epic Games studio told Engadget. “We have no involvement in anything similar to what you are describing and if launched, Epic will take appropriate action to end this exploitation of our players and the abuse of our IP.”

Several other publishers responded with surprise and concern to the description of Game + and made it clear that the app was not allowed to use their franchises. Publishers like Activision, Nintendo, EA, Microsoft and Sony are historically quick to defend their IP, pull the best titles Same as established gaming services when they don’t like how they’re used.

Not to mention that the video game industry is allergic to the term “gambling” and publishers are eager to stay clear of regulators’ radar. Game + is touted as a skill-based competition app, thus avoiding a game label on its face. At the same time, Frank and Sanford had the application certified under the 2006 Illegal Internet Gambling Law Enforcement Act, which describes the regulation of online gambling.

As a proof of concept, a spokesperson for Game + pointed out the existence of services like Players lounge and GamerSaloon, which also advertise individual competitions for cash using iconography from popular games. The spokesperson is right to say that these programs exist. And, as demonstrated by the iOS app Play One Up, they raise millions.

These services also appear to have risky legal bases.

In response to a question specifically regarding the Players’ Lounge and One Up, both of which include Fortnite in their marketing materials, the Epic spokesperson said the rules remain the same: “Any organization of betting matches for Fortnite violates our policies. “

Game + differentiates itself with an integrated Discover card registration process. In order to fund challenges, Game + requires players to sign up for a prepaid Discover card, which is then issued by MetaBank. It is the same financial institution that Recently Distributed Coronavirus Economic Impact Payments via prepaid debit cards in the United States. Players load the card with their own money and challenge other users to matches in over 50 console titles, setting their own rules and betting between $ 2 and $ 250 on the outcome. Game + earns its money by taking 10% of each challenge, capped at $ 5.

It will also make money from the fees, apparently. The Game + Discover Prepaid Card requires a minimum of $ 20 each time it is loaded, and there are fees associated with funding and keeping the account active. If a user does not participate in a challenge of the month, Game + will charge an inactivity fee of $ 1.50. After six months of no activity – and likely $ 9 in fees – users will be billed extra $ 2.95 per month until their account is cleared. Game + reserves the right to collect these fees “by any other authorized means if the payment attempt is refused.” Additionally, ATM withdrawals using the Game + card cost $ 2.50.

“There are fees associated with putting money on the card,” Frank said. “For example, there’s a charge of $ 0.50 to load the card and that sort of thing. As far as the use of the card is concerned, it works like a prepaid card. If you went to spend money in a store or online or that sort of thing, there is no charge associated with that, but some charges are shown on a schedule. “

On the other hand, One Up acts as an escrow and allows users to download and withdraw money through PayPal, Venmo, Cash App, and other online banking programs. The app charges a 15% booking fee for tournaments and raised more than $ 4 million from investors last year.

The One Up Exam Section just might be a living prophecy for Game +. Among the positive judgments are dozens of complaints about missing funds, an inability to make withdrawals, broken customer service trees, surprise limitations, and misleading players. Some articles call the app an outright scam.

In Game +, Frank and Sanford have a conflict resolution system that involves players uploading photos of their contested endgame screens or replaying matches that are too hard to call. They rely on the Discover Card signup process to control players and prevent cheating.

Game +, One Up, Players’ Lounge and other skill-based tournament services take advantage of recent legal changes around the game and sports betting apps to try to establish a new breed of head-to-head video game competition. And they could do it, if the owners of the video games let them.