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Roblox Accused of Concocting Illegal Gambling Ring for Minors - Bloomberg Law
(news.bloomberglaw.com)
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this post was submitted on 21 Aug 2023
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Technology
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I have no love for Roblox, but if it's a completely different website, isn't this kinda...not their fault?
It sounds like those IRS scams that want you to pay with iTunes gift cards -- no one claims that Apple is running the scam.
The article claims they were aware and didn't stop it, and that's why they are at fault. Maybe they could've revoked the API keys for those gambling sites? But is that even how it's set up? (I don't actually know how Robux work.)
The difference is you can't cash out Apple gift cards, and this is precisely why games generally don't allow it either: when you allow cash-token-cash conversions, then you turn the token into a cash-equivalent, becoming responsible for any misuse just the same as if you offered a banking account.
But Roblox got greedy, and not only do they allow cash-token-cash conversions (at a crazy rate of $100 USD = 10,000 R$ = $35 USD), but they also allow third parties to interact with it, with fully centralized knowledge and control.
Oh interesting.
But you can sell apple gift cards on eBay, yeah? Sure you won't get the full value, but you get most of it. And as you said, in this case Roblox is taking a cut for the conversion anyway.
So it seems like they could've washed their hands of this by making Robux transferable/ebayable: the "casinos" would still exist, they would still benefit from the popularity of the casinos, and the Robux are still "worth something". But they got too greedy and dug too deep by trying to become the "eBay" in the situation and take a cut off both ends, and now they might be forced to make Robux effectively worthless.
Yup, pretty much that. I guess Roblox could remove the conversion back to cash, and convert to gift cards instead. They could still skim the 30% on both ends, by making the gift cards in like "Robux diamonds" or something, like what Instagram does.
I think a more important difference is that Apple isn't involved in the transfer of the card from one person to another.
It sounds like Roblox is involved in each transfer and could cut off access to the third party site once they find out it is actually a gambling site.
The combination is definitely worse, but if Apple allowed one person to charge a card, and a different person to get the cash out, they'd still be involved in the transfer of the cash, so they'd still fall under all the banking regulations.
Roblox in this case got the worst combination possible: cash transfer, full control, gambling, minors. Like, what were they thinking about (...unless, they got so much profit that they don't fear any fine).
They could've done something to prevent kids from gambling, but I guess it's hard to take action when ignoring the problem actually get them more money.