Written by: Wei Fuhai, Attorney at Mankiw LLP
I haven't written an article for a long time. Compared with the prolific guys in our law firm, I really haven't produced anything for a while. Coincidentally, I'm working on a case involving an NFT digital collection platform recently, and I thought I'd take this opportunity to write something about digital collections. This is just my personal opinion, and it may not be correct, but for your reference.
Someone recently asked me, I am playing a certain NFT digital collection, but the platform was shut down because it involved gambling. As a player, do I have any legal risks?
In fact, to answer this question, we need to consider three aspects:
First, we need to determine what gambling is;
Secondly, we need to determine which gameplay methods on the NFT digital storage platform may be suspected of gambling;
Only then can we determine whether we, as digital treasure players, have any criminal legal risks related to gambling.
What is gambling?
Gambling is the act of betting money or other valuable items, with the outcome of random events determining the winner. In most countries and regions, gambling is an activity that is strictly regulated by law. Some places may completely prohibit gambling, while others allow it in certain places and under certain conditions.
It can be seen that there are two key points in gambling behavior.
First of all, the bet must be something valuable. The joke that if you lose the bet, you will be slapped in the face obviously has no value in terms of betting. The only value is that if you are beaten hard, you will have to go to the hospital and incur medical expenses, but that is another story.
Secondly, another point in defining gambling is that winning or losing must be determined by the results of random events. If the results of an event are not random, but inevitable, then use your smart brains to think about it, what is it called? It's called fraud! This kind of behavior that determines winning or losing through random events is called "speculative behavior" in the law.
Okay, now that we have solved the problem of what gambling is, we are going to deal with the next question.
How does Shuzang involve gambling?
There are many ways to play NFT digital storage platforms, not to mention that Chinese people are so smart that they can always develop some novel ways to play. After a rough inventory, common ways to play include airdrops, snap-ups, lotteries, whitelists, blind boxes, synthesis, empowerment, etc. Among these ways to play, I think blind boxes and synthesis are more likely to involve gambling.
First, let's look at the definition of blind boxes: users do not know the specific contents before purchase, and can only reveal them after purchase, which increases the fun and expectation of the purchase. Through this explanation, we can see that the act of buying blind boxes is a sexual act in the legal sense, but the nature of this gambling is different from real gambling, so there is no criminal prosecution. And whether it is purchased with digital currency or legal currency, aren't they all money or valuable items?
The second is synthesis. In fact, the nature of synthesis is similar to that of blind boxes, except that blind boxes are purchased with money (in a broad sense), while synthesis is to synthesize the collections after purchasing NFT collections. The price of the synthesized collections may be higher or lower than the collections before synthesis. Therefore, this is also gambling with an uncertain random event.
There is another gameplay that was very popular some time ago. Several lawyers from Mankiw Law Firm also participated in the evaluation (playing), which is the battle royale game. After playing it, we all agreed that it is also a game related to gambling. For this reason, we also wrote an article "How to avoid gambling in blockchain games with "Battle Royale" gameplay?" If you have played it, think about the gameplay and whether it is very similar to the above definition of gambling.
What should the Shuzang players do?
After introducing the above gaming methods that are prone to gambling, some people may ask: So, the NFT digital collection platform can easily become a gambling platform, so does that mean I can’t participate in anything?
As a criminal defense lawyer, in my opinion, the above-mentioned ways of playing NFT digital collection all involve criminal issues. Therefore, whether you are an entrepreneur who wants to build an NFT digital collection platform or a player who uses and participates in the NFT digital collection platform, my advice is usually not to recommend it. However, we can only give a reference answer. Whether you can play it and how to play it depends on your own cognition and value judgment.
Perhaps more people will ask: If the NFT digital collection platform I play is involved in gambling, will I be in trouble? Will the police come to arrest me?
Indeed, the "crime of gambling" is stipulated in the Criminal Law, but we also need to look at how the Criminal Law stipulates the crime of gambling - Article 303 of the Criminal Law stipulates that anyone who gathers people to gamble or makes gambling a profession for the purpose of profit shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or control, and shall also be fined.
First of all, as NFT digital collection players, we are all at home in front of computers and mobile phones, and there is no problem of gathering. More importantly, the second point is "taking gambling as a profession". What does this mean for gambling as a profession? It means that you have no other job, gambling is your job, and your main or all source of income depends on gambling. To put it bluntly, making money by gambling is called gambling as a profession. In French, this is called "regular occupation offender".
Everyone that Mankiw Law Firm has come into contact with, whether it is players defending their rights on the platform or victims of the NFT digital collection platform, is not relying on this to make a living, and all have other serious jobs. Therefore, this does not meet the characteristics of a "habitual offender" in the criminal law, so most players will naturally not be implicated by the NFT digital collection platform involved in gambling (but it does not rule out administrative detention for violating the Public Security Administration Punishment Law).
Attorney Mankiw's Summary
So, having said so much, some of the gameplay on the NFT digital collection platform does have criminal risks. As players, we can participate in the game appropriately and make a little money, just as an extra chicken leg tonight. But you need to know how to control the amount, otherwise the final result will not be so wonderful.