GameStop’s Digital Trading Card Product Leans Dangerously Close to Being Online Gambling
Credit: Minh Hoang/Flickr
GameStop revealed on Tuesday that it’s launching a trading card product that lets users buy packs whose contents are revealed.
Available cards will include Pokémon, football, baseball, and basketball. Dubbed “Power Packs,” each one includes a Professional Sports Authenticator (PSA)-graded card. After purchase, users have options that include selling the cards back to the company.
The business model is likely to come under legal scrutiny. Similar products have been the targets of lawsuits and been criticized as gambling or gambling-adjacent.
Box Breaks Face Legal Challenge — So Could Repacks
GameStop told investors that Power Packs would become available for purchase on April 15. During the afternoon hours, the product’s home page switched from a beta sign-up to listing Power Packs, both digital and physical, for sale.
Power Packs retail for between $25 and $2,500:
- $25 for Starter
- $50 for Silver
- $100 for Gold
- $500 for Platinum
- $1,000 for Diamond
- $2,500 for Lunar
“Higher pack levels give you a chance at getting higher-value cards but do not guarantee it,” the Power Pack FAQ says.
After opening a pack and seeing its contents, users can have the physical cards shipped to them, store the cards in their “vault,” or instantly sell them back.
The average sell-back price isn’t made clear, but similar physical Power Packs only guarantee a $22 value on a pack that costs $99.99.
Repackaging valuable trading cards as GameStop is doing could be thought of as a sort of “derivative market” for collectibles. Box breaks, another form of collectibles derivative, is currently facing a legal challenge due to being too much like gambling.
In box breaks, fans of streamers would purchase “positions” or teams in a card pack. For example, if a viewer bought position No. 1, they were purchasing the first card out of the pack. If that card was a high-value one, the person who bought it had made a profit. In a “team” break, someone might purchase all L.A. Lakers cards, for example. Any cards in the pack that related to Lakers players went to that buyer.
Box breaks exploded in popularity a few years ago. However, some platforms, like eBay, are now restricting them to certain pre-approved sellers. Whatnot, a live-streaming shopping service, is facing arbitration claims that box breaks using its service amount to illegal gambling.
Instant Resales Exacerbate Potential for Abuse
Critics of box breaks have noted the functional similarities with gambling. From Birches Health, a behavioral addiction program:
“From a formal, legal definition standpoint, breaks are not a form of gambling. However, there are aspects of them that are either similar to and or even the exact same as gambling. Breaks and gambling both involve financial risk, uncertain outcomes (where losing is statistically more probable than winning), elements of chance and randomness, emotional swings and dopamine rushes, and most worryingly: the potential for addiction.”
Products that are not yet legally defined as gambling but share many traits with gambling have come under increased scrutiny in recent years. Most prominently, some states are suing video game companies for “loot box” mechanics that they say constitute illegal gambling.
What may be most damning to GameStop’s potential defense is the fact that Power Packs buyers have the option of selling back the cards they open, without ever needing to take physical possession of them. Purchasing a card pack, seeing its contents, then selling those cards back for a credit to purchase more packs feels a lot like playing a casino game.
Gaming America reached out GameStop and asked for clarification on what makes Power Packs a non-gambling product, but had not received a response at the time of writing.
Image credit: Minh Hoang/Flickr (license)
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