Archive for December, 2012

Life in the Grey Area

Wednesday, December 19th, 2012

Sweepstakes Internet Cafes: Life in the Grey Area

A “grey area” is a concept or topic that is unclear.

Sweepstakes Internet cafes are fascinating businesses. Sprouting from a business model that is over 15 years old, sweepstakes Internet cafes have added a powerful marketing tool to standard Internet cafes: Sweepstakes games. While the concept of promoting a product or service with sweepstakes games is nothing new, sweepstakes software has truly elevated the Internet cafe business to a new, much more profitable level. Just as marketing giants such as McDonalds and Coca-Cola have significantly increased their income through the use of this clever marketing tool, so have sweepstakes Internet cafes.

The difference between well-known brands, such as McDonalds, and sweepstakes Internet cafes is that most of the population is familiar with McDonalds (which has over 30,000 restaurants around the world) but nobody has heard of “Joe’s Internet Cafe” (which has a single location in a small town in Florida). McDonalds and Joe’s are doing exactly the same thing. McDonalds sells food and gives away sweepstakes entries. Customers participate in the sweepstakes, which involves chance, and can win cash and prizes from a finite pool of over $300 million. Joe’s Sweepstakes Internet cafe in Smalltown, USA sells computer workstation time and Internet access and gives away sweepstakes entries. Customers participate in the sweepstakes at Joe’s, just like they do at McDonalds, and can win prizes and cash from a finite pool.

Nobody seems to give it a second thought when someone wins $1 million playing the McDonalds sweepstakes, but if someone wins cash at Joe’s some may be heard to say “wait a minute – if you can win cash, that’s gambling!” Why is it gambling if you can win cash at Joe’s, but not if you can win cash at McDonalds? The answer is – it’s the same thing. Sweepstakes promotions follow a very specific set of rules and regulations, whether they’re at McDonalds or at Joe’s Internet cafe.

Some people will quickly chime in “yes, but when you reveal your entries at an Internet cafe it looks like a slot machine!” This is true, it DOES look like a slot machine. This is the method that many sweepstakes Internet cafes choose to reveal the entries. It’s interesting to note that Coca-Cola also uses slot-style revealers to display the results of its web-based sweepstakes games. Does the method of revealing sweepstakes entries make a sweepstakes any more or less legal? Of course not; just look at Coca-Cola!

Internet cafe sweepstakes games fall into what is called the “grey area”. This means that while they may LOOK like something that is not legal in many places in the United States, they actually follow rules that make them legal in many jurisdictions. This can be confusing to those who don’t understand the concept. At first pass, Internet sweepstakes cafes can certainly appear to be illegal. But when you dig through the facts and understand the way sweepstakes games work you will quickly determine that sweepstakes Internet cafes are very different from gambling. Simply put, if everyone would take the time to do a little research (seriously, 10 minutes online with Google) before rushing in and calling it gambling it would save a lot of trouble.

The scene from Monty Python’s “Holy Grail” comes to mind with the village full of idiots and the “witch hunt”. “How do you know she is a witch?” “She LOOKS LIKE ONE!” While watching the cult comedy we all laugh at the preposterous notion that without any facts simply looking like a witch makes the suspect a witch. When asked why Internet cafe sweepstakes games might be legally questionable, the most common answer is “It looks like gambling”.

Those who live, work, and play in Internet cafe sweepstakes industry have grown accustomed to the ongoing skepticism and criticism from the peanut gallery. Sweepstakes Internet cafes follow specific sweepstakes rules and can be a fantastic and highly profitable business model. Yes, it may look like a witch. But it is not a witch. Let’s end the witch hunt now and do some research before throwing the innocents into the fire!