internet software business gambling
Making games with multi-level marketing in game
<p>I have a plan to create an online game with multi-level marketing.</p>

<p>Is it legal to create a game which costs money to buy, and then reward them with more money than they used to buy the game if three more people join using their username? (The money they are rewarded with is real money.)</p>

<p>If so, would it be legally classified as gambling, and would people have to be ~18 to play it?</p>

<p>EDIT: Please note, that all information will be present in the disclaimer, and there will be a warning of diminishing returns.</p>

<p>EDIT: It's an Egyptian-themed pixellated dungeon crawler .  Zero gambling in game. The only way that even vaguely resembles gambling, is to simply the possibility of buying a character, in the hopes you will be rewarded. Almost everything is accessible through one character that you can control. You might consider buying more than one character, either because you want to access different class features or for the (potential) monetary reward.</p>

<p>If you're selling your game <em>as</em> a game, and particularly if it's well within the range of prices for similar games, you should be OK. If your game costs more than its competitors, it may raise some flags. But as long as the point of buying the game is to play it, you should still be OK.</p>

<p>If the perceived primary value of the game is the MLM component, though -- ie: if your average customer would buy the game not to waste a few hours playing a fun little game, but to profit from recruiting new players -- then it might be classified as a pyramid scheme. It doesn't really matter how many warnings you slap on the box; if it's a pyramid scheme, it's probably illegal.</p>

<p>Either way, whether the game qualifies as "gambling" depends on the game itself;
MLM doesn't affect that classification. You may want to restrict it to 18+ regardless, though, for your sake. In promising to exchange money for sales, you are effectively entering into a contract with your players, and minors often can't enter into a contract.</p>

<p>This is not gambling.</p>

<p>In fact calling it MLM is a huge stretch - MLM implies <em>multi level</em> and this would not qualify.</p>

<p>Assuming for the moment that this did qualify as MLM, its legality would be dependent on jurisdiction - which you have not specified.  In most places, MLM is legal (as distinct from Pyramid schemes which are not.  The distinction being that MLM provides a product, while a pyramid scheme derives value primarily from those who are persuaded to join - the problem is often working out if something is MLM or a pyramid scheme).   From my very limited experience, countries in Asia seem to have more prohibitions against MLM schemes then european countries, with much tighter regulation)</p>
