The legal hurdles facing fantasy news service
OUT-LAW Radio, 10/07/2008
We talk to the team behind an entertaining new fantasy news
service about the legal hurdles they have had to leap to promote
their business in the US
A text transcription follows.
This transcript is for anyone with a hearing impairment or who
for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew
Magee.
Hello and welcome to OUT-LAW Radio, the weekly podcast that
keeps you up to date on all the twists and turns in the world of
technology law.
Every week we bring you the latest news and in depth features
that help you to make sense of the ever-changing laws that govern
technology today.
My name is Matthew Magee, and this week we talk to the man
behind a web service which lets you bet on the outcome of news
stories about the hoops he's had to jump through to keep his site
on the right side of the law.
But first, the news:
European Parliament rejects telecoms super-regulator
and
UK domain name body changes dispute rules
A European Parliament committee has rejected the European
Commission's plans for an EU wide telecoms regulator. The MEPs have
proposed an alternative body which will have fewer powers.
Viviane Reding, the Telecoms Commissioner, has criticised the
plan, saying that the alternative body would not be able to act
quickly enough.
The Commission announced its proposals for the new regulator
last November, when it said a pan-European body was needed to break
the government-endorsed stranglehold that some dominant operators
still have.
But the Industry, Research and Energy Committee (ITRE) of the
Parliament approved a report by Spanish socialist MEP Pilar del
Castillo which proposes the creation of a new, less powerful
agency, the Body of European Regulators in Telecommunications
(BERT), which will just be made up of existing national
regulators.
The committee's proposal will go before the full Parliament in
September, then before the Council of Telecoms Ministers in
November, at which point it could become law.
The body in charge of the .uk internet domain has announced changes
to its dispute resolution policies that will make it cheaper to win
unopposed disputes but will not address the high cost of preparing
those cases.
The cost of a judgment in unopposed cases will fall from £750 to
£200 but disputes expert David Barker of Pinsent Masons, the law
firm behind Out Law, said that the change does not reduce the main
cost of an unopposed dispute, which is preparing the case in the
first place.
Barker said the move is a step in the right direction, but it
does not deal with the main cost, which is a substantial work
involved in setting out your rights and explaining that the other
party does not have rights. It is advisable to get a lawyer to do
this, which is what pushes the costs up.
The change is intended to deal with the 52% of cases which are
unopposed. The dispute resolution policy is a basis of a mediation
service to save disputes always ending up in the courts. Either
party can appeal Nominet expert decisions through the courts
system.
That was this week's OUT-LAW news
The internet has helped gambling change out of all recognition
in recent years. No longer is it necessary to plod across sticky
vinyl in a dingy bookies to put a fiver each way on lucky jack in
the 4.15 at Uttoxeter; now you can lay a spread bet on the most
popular colour for winning jockeys' jackets at Ascot, or wager on
the exact minute of the first goal scored by a brown haired, left
footed twin wearing number 9 at the next World Cup.
You can participate in betting exchanges where any bet you care
to lay is taken up by another punter on the other side of the
world, or you can play fantasy football, fantasy cricket, fantasy
rugby: the world of sport is your oyster.
Well one Edinburgh company is intent on expanding that concept
beyond sport. Hubdub has invented fantasy news.
If fantasy football is played by predicting how footballers will
play, then fantasy news is about predicting how events in the news
will turn out. Think Gordon Brown won't last the summer? Lay a bet.
Think global sea temperature will inch higher this year? Have a
punt.
For now the money is all fake, but Hubdub plans prizes in the
future for the best news predictors.
Hubdub chief executive Nigel Eccles explained the concept behind
his business.
Eccles: Hubdub is a news prediction platform.
What that means is that people trade the outcomes of running news
stories. We use news in the broader sense so it runs everything
from world affairs, politics or elections obviously but it goes all
the way through to sports events. Users command the site. They
create markets or questions around these uncertain events like who
is going to be the next US president. Then other users come in and
then trade predictions on that using play money.
The range of events on which users can bet is staggering. Anyone
with a penchant for doom might want to bet, for example, on the
outcome of the first use of the large hadron collider in Geneva.
You can be the first to bet that just Switzerland will be wiped
out, or you can join the people who think there is a 3% chance that
the event will destroy all life on earth.
The company aims its service squarely at the American market,
but that presents some legal problems. The US banned most internet
gambling two years ago in a controversial move that forced online
betting companies out of the country.
Hubdub, then, needs to be careful if it does not want to fall
foul of the laws.
Eccles: We targeted the US market and 80% of
our users are based in the US so we cannot have a cash product
unfortunately. We are a UK company but we are targeted US news and
US is our target market so there certainly is an argument that we
probably have to comply more with US law, focus more on US law that
UK law. Just to give you an example in the US, betting online is
largely illegal and it is treated very differently from fantasy
sports which again is treated very different from lotteries or for
skills based games. So what we want to do with the product depends
very much on which definition do we want to sit under and then
therefore how should the game be structured.
It is because of those restrictions that Hubdub uses fake money
in its bets; but this is also because it does not want to alienate
the vast majority of people who do not bet, said Eccles. He does
plan, though, to introduce some financial rewards.
Eccles: One thing to realise is that 90% of the
population don’t bet and that is not going to change and we want
this to be a mass market product. So while 90% of the people don’t
bet they still have opinions and what we really want to do is to
have a mass market free product where people aren’t risking money
but can voice and share their opinions and their predictions. So
that is free and will always remain free but at a later point what
we might want to do and what we are certainly thinking about is,
there is a percentage of those say 10% of our user base who say
this is great and we would like it even more even we could have a
monthly prize fund or even if one day potentially we could risk
money on each prediction. It actually becomes a real world bet.
Say, for example, the Olympics, we could have a prize fund and have
competitions around the Olympic events and that would be a premium
product. So at the moment focus on user growth at a later point and
that is quite some way off sort of one to two years and focusing on
what other premium products we would lay on top.
The service faces other legal problems: with users posting
material related to the news there is a very real danger of
defamatory or offensive content being published, or of users
suggesting unsuitable subjects for bets.
Eccles: We post-moderate so we do not moderate
comments that come into the site. We only moderate them on response
from users so if those comments break our terms of service then we
would pull them. Now we believe that post-moderation means that we
do not therefore act as a publisher of those comments until after
the point we moderate it. Therefore we believe again is that we
would not be liable were somebody to post something libellous if we
hadn’t moderated at that point. Initially when we launched we
pretty much launched to a blank canvas because we were keen to let
the community decide where the boundaries were. Early on we had
questions around assassinations or even a death in Iraq sort of US
soldiers die in Iraq how many would die in the next month. And
pretty much there has been a consensus on those ones is that there
is a kind of a tasteful guideline that users tend not to create
questions that the majority would find distasteful.
Like any site containing user-submitted content, Hubdub also has
to contend with copyright laws, said Eccles.
Eccles: So users can post text and also images
to the site and there is some risk that they could publish
something that was copyrighted. Again what we would do is we
certainly would adhere to the DMCA which is you know if we were
contacted by a copyright holder we would take down that content but
it is not really possible for us to pre-check all the content
coming on the site.
The company has eight thousand registered users, and aims to
raise a proper first round of venture capital later this year,
having been run so far on angel investor funding.
Its future will depend largely on how it navigates some of the
tricky legal issues it faces, particularly in relation to US
gambling laws. The lively, entertaining and innovative service is
one that Eccles will hope pays off; he's got more than just Hubdub
dollars riding on this one.
That's all we have time for this week, thank you for listening.
Why not get in touch with us at OUT-LAW Radio? Do you know of a
technology law story? We would love to hear from you on radio@out-law.com.
Make sure you tune in next week; but for now, goodbye
OUT-LAW Radio was produced and presented by Matthew Magee for
international law firm Pinsent Masons.
