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Swoopo and Gambling
Asiina
...WaterlooRegistered User regular
...WaterlooRegistered User regular
There's this "auction" site called Swoopo. It operates a little differently from most though.
From their About Us page:
So basically you pay 75c a bid, no matter if you win or not, to up the price by 15c. It's a pretty great deal for Swoopo. For example you have this wii which, at the time I'm making this thread is going for $148.50. So 990 people have bid on it, making this a $742.50 Wii for Swoopo, plus the $150 they get from the winner.
The question is, why isn't this gambling? You and others are putting your money toward something with a hope of winning, but if you lose you still don't get your money back.
According to USLegal.com the legal definition of gambling is:
Is it the element of chance? This seems to involve about as much chance as a game of poker, as you can't really predict the outcome since you can't tell when the auction will end. This website doesn't seem to have a gaming license, as far as I can see.
Do you think this should be listed as an auction website or are they basically operating an online casino? Or is it just a scam all-round?
From their About Us page:
Here is how it works: our online customers buy “bids†in advance. They cost $0.75 each and are sold in packs of 30, 50, 100, 300 or 700. Bidders have the choice of placing single bids, or, using an electronic bid assistant called the “BidButlerâ€. Alternatively, customers can bid via the phone.
Every bid placed, increases the price of the product by 15c and the auction countdown by up to 20 seconds. To help keep track of the money spent on bidding, each auction displays the amount spent on bids by the customer and how much the bidder would save overall, if they won the auction at that moment.
The ‘last bidder standing’ when the countdown reaches zero, wins the auction – usually at a very low price; winners save, on average, 65% when compared to the recommended retail price.
In December 2007, Swoopo was successfully launched in the UK, followed by Spain in May 2008 and the US and Austria in September 2008.
So basically you pay 75c a bid, no matter if you win or not, to up the price by 15c. It's a pretty great deal for Swoopo. For example you have this wii which, at the time I'm making this thread is going for $148.50. So 990 people have bid on it, making this a $742.50 Wii for Swoopo, plus the $150 they get from the winner.
The question is, why isn't this gambling? You and others are putting your money toward something with a hope of winning, but if you lose you still don't get your money back.
According to USLegal.com the legal definition of gambling is:
A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.
Is it the element of chance? This seems to involve about as much chance as a game of poker, as you can't really predict the outcome since you can't tell when the auction will end. This website doesn't seem to have a gaming license, as far as I can see.
Do you think this should be listed as an auction website or are they basically operating an online casino? Or is it just a scam all-round?
Asiina on
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Well, it's more like poker if the cards were removed and everybody was just upping the pot until somebody folded...or something. There's no element of chance because the user has absolute control over whether or not the auction ends; they can simply place another bid.
At least that's the way I'm seeing it.
It's still pretty scamtastic, though.
Overall, fucking brilliant and entirely evil way of making money.
It's almost credit cardtastic.
Okay, that might actually change my mind a bit.
While each bidder has the option to simply continue bidding, so in theory they can exert complete control over the end of the auction, there's still an element of expected value based on the cost of the bid, the difference between current value and retail (or fucking cash), and the odds that somebody else will simply bid after you (which is based on their expected value).
And because it costs $.75 to raise the price $.15, early bidders have no real control over the end of the auction....it would cost them far too much to get the price to the final ending price at that rate, so they're essentially just betting that nobody else will notice the auction, or whatever.
EDIT: I don't think it's ever going to be gambling according to the law, though. And the cash thing just makes it a hundred times more scamtastic.
The guy who thought this up is some sort of evil genius.
It'd be better to spend money on lottery tickets instead of this, really. Your odds of winning are probably better.
I wouldn't be surprised if, assuming this site lasts, whatever jurisdiction they're in eventually bars employees from bidding on company auctions. There's just way too much opportunity for actual (like, illegal) scamming there. Same way that employees generally don't get to win contests that companies throw.
EDIT: And yes, I'd say you have better odds at the craps table than you have in all but the latest stages of an auction there.
That would make it very scamtastic indeed.
http://www.swoopo.com/bidbutlerhelp.html
Where did you hear this? I wouldn't mind seeing their Terms of Service, as the only way that Swoopo employees bidding would be wrong is if it is strictly prohibited in their terms.
I'm not saying these guys are not evil. However, if they are within the boundaries of the law and are being clear to the customer how the system works (which they are), bravo to them. I mean, if you aren't doing the math then you get what you deserve.
I'd be extremely interested to see what happens if the law ever takes in interest in these guys. I'm sorry, but as soon as a company has a business model that allows them to sell cash it's pretty much either a scam or gambling...the former being illegal and the latter being heavily regulated.
Also, in the US at least, we don't always go in for the "well as long as the terms were made clear the customer deserves what they get" philosophy. We have consumer protections for a reason.
You have no control over whether other people bid after you, and are paying money in the hopes you'll win the prize.
It stops being an auction site when you pay money to place a bid.
http://technologizer.com/2008/09/17/is-swoopo-nothing-more-than-a-well-designed-gimmick/
http://technologizer.com/2008/10/09/swoopo-looks-to-set-the-record-straight/
The first is a news item about the site and how it works, and the second is a response by a Swoopo employee. Highlights include having a revenue of $15 mil in 2007 and $20+ mil in 2008, and also a large jump in sucker... err, customers when they launched in the US.
The company running their US operations is apparently called "Entertainment Shopping." Yet another strike against them regarding it being gambling.
Unless these dudes are located on an Indian reservation (they're not) I don't see them lasting too much longer. At least not in their currently, apparently unregulated, form. Whether they wind up regulated and taxed out the ass or just plain disbanded is the big question.
Wouldn't touch this site with a bargepole. It's not even gambling IMO, since your chances of winning are slim to none.
You clicked to bid when the timer was at 1 second and your bid didn't get recognized (due to uh, um, latency of course, beyond swoopo's control, nothing they can do)....
Oh look, a swoopo employee won the bid.
How is that not incredibly scamtastic?
In other words, you're better off just taking a grand to the casino, then buying whatever you can afford with whatever you have left (positive or negative), than you are trying to buy some shit on Swoopo.
Yeah I think informing the CA AG about this is a good idea.
If it weren't in their ToS I can't imagine how having employees bid on stuff would be legal.
Also, FYI Swoopo is basically a Dollar Auction.
This becomes even more amusing when you consider that they actually have auctions on money.
I stopped being aghast at the stupidity of people when I first learned about pyramid schemes and the lottery.
One of my favorite pyramid schemes/scams: Sell sugar pills to (mostly old) people that supposedly provide the body with nutrients it doesn't otherwise get but supposedly needs, then offer discounts to customers who convince others to start buying. As best I can figure the whole scheme runs on the placebo effect.
Someone in my office tried to get me to start buying/taking the pills, I went to a free "seminar on glyconutrients" to assess the level of bullshit....I assure you it is through the roof.
http://www.marksdailyapple.com/glyconutrients-mannatech/
https://www.mannatech.com/Country.aspx
Drink Brawndo! It's got Electrolytes!
MORE LIGHTS THAN YOUR BODY HAS ROOM FOR!
Damn this thread is depressing. Seriously, people actually do that? But then, how is it much worse than auction channels on TV where you're charged an obscene amount just to call in and place your bid.
I have no reason to not believe that sites like these use their own bots that put fake bids on auctions to assure that they don't sell too fast, meaning that even more people will throw their money away on buying bids. On eBay etc you can openly track the bidding process -- no such thing on these sites.
That feels even more scummy to me. "Hey, you can get some bids back if you don't win the item, just keep bidding!"
Wishing Well and Such
I was pretty floored that people would fall for this, but after showing it around the office and telling people about it in the order it's presented to the average internet user I can see how people never make the leap to 'scam.' I basically said 'hey look at this some guy got a 47" tv for $7' and people go 'NO WAI! and lean in close to find out the secret' and only really figure out its a scam when I break down how much money these people are making on this shit.
Oh god my wife's family keeps trying to get us to jump on the Mannatech bandwagon.
If so, they need to be perfectly clear that it's gambling and not dress up like it's an auction site.
The difference is that these scam things are just sugar pills that have no actual effect whatsoever. Gatorade, while they may market it as something special, is basically just oral rehydration solution - which does actually do something.