I’m not the only one with a WorldWinner problem. Click through and you’ll see what I mean.
19 comments at XOM reviews: http://www.xomreviews.com/worldwinner.com
2-page essay: WorldWinner.Com: A Risk You Shouldn’t Gamble On
68 comments in response to an article about Skilljam and WorldWinner on Digital Media Wire.
28 responses to this complaint and 1 to this one on Complaints Board.
27 complaints on Ripoff Report.
On Cashgamers.net Forums there are 315 threads (many with dozens, a few with hundreds) of replies that come up when you search WorldWinner. These are not all complaints — but there are some critical comments among what appear to be some very serious players. See, for example: 1, 2, 3, 4, 5, 6
WorldWinner won’t take your money if you live in certain states. The FAQ lists 12 states [Q: Who is ineligible to play in cash competitions?], but Section Two, Conditions and Obligations, under Terms and Conditions is more explicit:
The rules governing sweepstakes, contests, and tournaments with entry fees and/or prizes are set up by each individual state, not by the federal government. Based on these 50 sets of laws; the Site DOES NOT offer games requiring a cash entry fee (“Cash Competitions”) to users accessing the Site from the following states: Arkansas, Connecticut, Delaware, Illinois, Iowa, Louisiana, Maryland, Montana, South Carolina, South Dakota, Tennessee and Vermont. Additionally, the Site (a) DOES NOT offer card game Cash Competitions if you reside in, or access the Site from, Indiana or Maine, and (b) only offers limited types of tournaments to users accessing the Site from Arizona and Florida.
I can’t figure out what these states have in common. Of these 12 [or 16], five — Illinois, Iowa, Louisiana, South Dakota, and Indiana — are among the 14 states with have legal licensed, commercial casinos. All but Arkansas have state lotteries (41 states plus the District of Columbia do).
In other words, those states banning WorldWinner are some with the most experience in regulating gambling.
But when you think about it, the idea of State laws dictating whether you can play for money at WorldWinner doesn’t make a lot of sense. You can be in Alaska, the company headquarters is in Massachusetts, but your bank could be in Arkansas, and all three of these are needed, so why should your body’s locale matter more than your money’s?
Or consider this scenario: You are flying from Chicago to Miami. You can’t play the cash games in Illinois, but when the plane is over Indiana and Kentucky you can, but a little later you’re over Tennessee and you can’t, but then you are over Alabama and you can, and then you are over Florida and maybe you can and maybe you can’t.
Does this make any sense at all?
Big Money
What is for sure is that WorldWinner stands to lose a lot of money if it loses its legality. So it isn’t so surprising then to see that it makes use of lobbyists at the State and Federal levels.
For example, its parent company, GSN spent $24,000 on lobbyists [ Francis, Edward, & Cronin, Inc] in 2009 in Massachusetts. From July 1, 2009 – September 30, 2009, WorldWinner itself hired GrayRobinson PA at the cost of somewhere between $10,000 asnd $20,000 to lobby the Florida legistature, and spent up to $10,000 on this for the other three quarters of last year.
At the Federal level, opensecrets.com reports these figures:
- 2003: $20,000
- 2005: $100,000
- 2006: $120,000
- 2009: $110,000.
- 2010 [first quarter]: $30,000
The site implu.com, “an online tool for prospecting, networking and market research,” lists the firm hired by WorldWinner as Crowell & Moring LLP, and notes its top issue of interest to be “Gaming / Gambling / Casino.” Specifically, it wants to influence
ISSUES RELATED TO THE REGULATION OF SKILL GAMES INCLUDING, H.R. 2267, THE INTERNET GAMBLING REGULATION, CONSUMER PROTECTION, AND ENFORCEMENT ACT. ISSUES RELATED TO REGULATIONS IMPLEMENTING THE UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT, INCLUDING, H.R. 2266, THE REASONABLE PRUDENCE IN REGULATION ACT, AND H.R. 34, THE MIDNIGHT RULE ACT.
And what is H.R. 2267? Here’s its description at http://www.govtrack.us/congress/
Internet Gambling Regulation, Consumer Protection, and Enforcement Act – Grants the Secretary of the Treasury regulatory and enforcement jurisdiction over the Internet Gambling Licensing Program established by this Act. Prescribes administrative and licensing requirements for Internet betting. Prohibits any person from operating an Internet gambling facility that knowingly accepts bets or wagers from persons located in the United States without a license issued by the Secretary. Requires the Secretary to assess: (1) fees against licensee institutions to cover the cost of administering this Act; and (2) specified civil money penalties upon licensees or other persons for willful violation of this Act or related regulations.
Say WorldWinner, I’m available for hire as a non-lobbyist. My fee? What I had to send the IRS last year, thanks to you, taxes on my “winnings” that went right back to join much more of my money in your coffers, never gracing my pocket or bank account. Had I gambled and “won” the same amount, I could have deducted my losses, and owed nothing. But since I was playing “skill games” [yea, right] I was screwed.
WorldWinner makes a big deal out of its “commitment to fairness.” Here’s another of its FAQ answers.
Our Pledge:
1. WorldWinner makes no money on the outcome of a competition. While we take a nominal fee for organizing and managing competitions, our revenue is not contingent upon the end result. 2. WorldWinner never participates in a competition. We do not fill spots in competitions with employees, nor do we contract with regular players to do the same. 3. Whether you are a beginner in Free Cell or an expert in Solitaire Rush, WorldWinner works hard to match you against players of similar skill. Occasionally that requires us to inform you that there are no open competitions with players of comparable skill. The FairMatching System
WorldWinner matches players based on the FairMatching System. The goal of our FairMatching System is to provide each player with opponents of an equal skill level in a timely fashion. Using a sophisticated set of algorithms, the FMS continually monitors game scores, win/loss ratios, recent and overall player performance, as well as many other factors. The FMS uses this information to provide each player with the closest possible match from the pool of available opponents.
Sounds impressive and reassuring, right? But has anyone ever had access to this FMS?
Has anyone ever witnessed it in action?
Does anyone regulate this site?
No, because it has carved out a special niche for itself. It isn’t regulated by those agencies charged with overseeing gambling operations because of its dubious claim to be all about skill and not chance.
In a previous post I looked at another of its claims cited in a FAQ regarding whether players participating in the same competition get the “same hand”:
In Matched Competitions for most games, all unique players will receive the same first “hand”; subsequent “hands” will be of similar difficulty as determined by our proprietary game rating analysis software. In Unlimited Entry Tournaments, all players will receive hands of similar difficulty and equal scoring potential, again based on our proprietary game rating analysis software.
Note that proprietary repeated twice in two lines.
To me, it suggests, don’t think you’ll ever see this in action — it’s a secret.
Remember Tinkerbell caught by the pirates? To restore her light we all had to chant: I do believe in fairies. I do believe in fairies.
Now let’s chant together: I do believe in fairness, I do believe in fairness.
Because that’s all you have to go on: faith.
Oh, and that sentence above in the first quotation about fairness —
While we take a nominal fee for organizing and managing competitions, our revenue is not contingent upon the end result —
I’d be laughing if not gagging. Nominal fee? Nominal?
I don’t know about you, but when I look at a 2-player $.99 entry fee tournament with a prize of $1.55, I see a roughly 25% fee. Or 5-player entry fee $1.85 [total entries=$9.25] with a $6.50 prize, I see WorldWinner raking in $2.75.
Nominal is a meaningless word, really. It implies smallness, trifling, just covers bare necessities. But it has no absolute meaning.
If you want to believe that 25% is nominal, go right ahead. But again, what we have is WorldWinner stating as fact something widely open to debate.
At WorldWinner, there are some competitions that are limited to a certain number of players: 2, 3, 5, 15, 18, for example, and others that you can enter as many times as you like, paying the entry fee again and again, of course. Even on the limited number of player games, you often get a chance to “play again to better your score” if there are still open slots in that particular tournament.
Now then, if all players in a tournament get dealt the same hand, how is it possible for the same player in that tournament not to be at an advantage when he makes his second or third attempt? WorldWinner explains it this way in its FAQ [Do all players participating in the same competition get the “same hand”?] :
WorldWinner provides its players with equivalent opportunities to solve any given game. This ensures game play of equal difficulty for all players within each individual competition. WorldWinner does so by doing the following:
- In Matched Competitions for most games, all unique players will receive the same first “hand”; subsequent “hands” will be of similar difficulty as determined by our proprietary game rating analysis software.
- In Unlimited Entry Tournaments, all players will receive hands of similar difficulty and equal scoring potential, again based on our proprietary game rating analysis software.
Please note that by “same hands” we mean the same deck, same roll, same board, etc. as it applies to every WorldWinner game.
So we have to trust that the “proprietary game rating analysis software” is legitimate.
But consider those games where “same deck, same roll, same board, etc.” doesn’t apply, for example, JEOPARDY! and TRIVIAL PURSUIT TURBO. I’ve already explained why I think luck is more important than skill in these competitions, and the effect is multiplied with subsequent entires. Now consider this. I played a series of warm-up games the other day to see how often I got categories that were good for me and how often I got ones I found hopeless. I tried to finish quickly to get the “play again to better your score” option so I could see how categories compared. In one tournament, as the same player, from the same ISP, in the same tournament, I got the same category [Inventors] twice. The questions were exactly the same, but the order of the multiple choice answers had changed. The second time around I picked up $600 more than I had the first time, since I now knew who the brother of the sewing machine inventor was (or something like that). Of course, that got me to wondering how often that happens in cash tournaments. Anyone out there have this experience?
And think about Hangmania. Sometimes you are lucky, and the word pops right out at you. Sometimes not. And sometimes there’s not an aha, but of course, moment even when the word or phrase or phrase is revealed. Think about this 5-person tournament. Say the category is person and the answer is some Hip Hop personality. I wouldn’t have a prayer; I wouldn’t recognize the solution. So I “play again to better my score” and this time it’s still a person, but it is a hockey player. Same level of hopelessness. Spend another buck and it’s a Classic Rock era personality, and I win the tournament.
How could this scenario be defined as a game of skill? Did I become more skillful on my third try? Of course not, just luckier. And by putting $3.00 in the game rather than $1.00 I tripled not my skill but my chance of getting a puzzle that was easy for me. Is this really fair to those who just put $1.00 into the game?
Now let’s consider the skill vs. chance issue in the cases of these Worldwinner games: JEOPARDY! and TRIVIAL PURSUIT TURBO. It might seem at first glance that whether you win or lose doesn’t depend on chance but on whether or not you answer the questions asked correctly, right? Think again. I submit these are may be the chanciest games of all.
Why? Because these have nothing to do with skill. They have to do with knowledge and luck. This is easiest to see in the case of JEOPARDY! If the three categories of questions are ones matching your knowledge base, you are in luck, and all you need be is most knowledgeable and fastest. But if even one of the categories isn’t something you know anything about — you are out of luck, unless, I guess, your four or however many opponents are equally ignorant. And no amount of skill is going to trump my bad luck if the categories are Country Music, Football, and Meteorology, for example. But if the categories are The Beatles, Modern Novels, and Anatomy, I might well be
. . . in skill? No, in luck.
In TRIVIAL PURSUIT TURBO you come up against the same problem. If you are lucky, the questions are ones you can answer. And if you aren’t lucky, well, you lose.
I just can’t see where skill comes into this.
Card Games
Play the hand that you are dealt. Luck of the draw. There’s a reason why metaphors for luck and card games go together. Even when players are dealt the same hands, it isn’t skill, but luck that matters because in a true game there are lots of little choices that close down some possibilities and open up others, and when two equal choices present, and one must be chosen, then whether that choice is a winning or losing one is down to luck.
Worldwinner can’t get away from acknowledging this. For example, here are a couple of Worldwinner’s comments on Strategy for Solitare Rush under Game Rules [emphasis added]:
In the 3-Card variation, when you remove a card from the wastepile, it will cause different cards to appear the next time you go through the hand – but only beginning from the point in the hand where you just removed the card. This may help or hurt, depending on your current situation.
In the 3-Card variation, it is sometimes useful to leave a card in the wastepile even if you have a place for it in the tableau, so that you can remove that card from the wastepile at a later point in order to “shake up” the hand.
And, interestingly, if you look at Worldwinner’s Terms and Conditions page, under Section Two, Conditions and Obligations, you’ll discover:
Additionally, the Site (a) DOES NOT offer card game Cash Competitions if you reside in, or access the Site from, Indiana or Maine,
Courts generally have defined a bet or wager as any activity that involves a prize, consideration, and chance. A prize is anything of value. Chance is usually determined by assessing whether chance or skill predominates. Consideration is what the person must pay to enter and must be something of value, such as money.
No. Gambling is defined by most states as involving a “consideration” (wager), an activity involving chance, and a monetary or merchandise reward. Since all WorldWinner games are based on skill, it’s the skill of the player, not luck, which determines the outcome of any competition, so they are not considered to be gambling activities.
Equally important, players play against each other, not against WorldWinner. WorldWinner never makes money from the outcome of a competition. We are in the business of organizing and managing competitions, and we take a fee for doing that but we have no vested interest in the outcome of the competitions.
What is the entry fee to a Worldwinner tournament if it is not a “Consideration” — a wager — by a player that she can beat the other entrants? And indisputably prizes are involved.
It’s the third condition –chance — that makes all the difference.
So let’s look at the claim that all “WorldWinner games are based on skill, it’s the skill of the player, not luck, which determines the outcome of any competition.”
I think some of its games are based more on skill than on chance. SCRABBLE Cubes would be one. Given the same set of cubes, players could come up with entirely different solutions, and more importantly I don’t think there are any predetermined dead ends. In other words, the puzzle design might have an ideal solution in mind, but that wouldn’t preclude someone with an outstanding vocabulary taking a different and better approach.
In contrast, consider Wheel of Fortune (its name alone should be a clue). Yes, the winner has to be able to solve Hangman type puzzles. But whether the player even gets a chance to do so depends on if she avoids landing on — purely by chance [unless the thing is rigged] — the Lose a Turn command. And even if she sucessfully solves the puzzle and makes no mistakes, winning depends on how much cash she ends up with — and that depends on the dollar amounts that the wheel of fortune spins garner.
Skill component: minimal. Chance: critical. Right?
So it appears. But according to Worldwinner, the element of chance has been eliminated this way:
In order to reduce the element of luck in the game, spins of the wheel are not actually random. Instead, each pair of phrases in the Main Round has a specific set of spins associated with it. All players trying to solve that pair of puzzles will receive the exact same set of spins. In order to remain fair, the wheel spins for the same amount of time with each and every spin, and therefore, all players experience the same effect on their time bonus.
So I tried this, using a free warm-up 2-person game. The puzzles differed — and so did the dollar figures the wheel landed on. I tried again. This time, the dollar figures differed — and the puzzle answer was a single word. Question: how does “each pair of phrases in the Main Round has a specific set of spins associated with it” work when in the same tournament I had one puzzle with a 2-word answer and one with a single word answer?
Anyone have an explanation?
Before getting into how gambling has been defined in US law, let’s look at this tax situation a little bit more closely.
Here we have the IRS’s decree on gambling winnings:
Backup withholding on gambling winnings. If you have any kind of gambling winnings and do not give the payer your social security number, the payer may have to withhold income tax at a flat 28% rate. This rule also applies to winnings of at least $1,200 from bingo or slot machines or $1,500 from keno, and to certain other gambling winnings of at least $600.
And here we have Worldwinner on submitting a W-9:
Worldwinner is required by the U.S. Internal Revenue Service (IRS) to report when a US player’s Net Winnings reach $600 in a calendar year. Upon reaching that threshold, you will be asked to submit a W-9 form. If you choose not to submit a W-9, we are required to withhold 28% of your winnings and send them to the IRS.
And for foreign players, the IRS says:
Generally, gambling winnings paid to a foreign person are subject to 30% withholding under sections 1441(a) and 1442(a)…
And for foreign players, Worldwinner says:
All players who are not citizens of the United States are subject to a mandatory withholding of 30% on their Net Winnings (competition winnings minus entry fees for competitions which resulted in winnings
Interesting, isn’t it, that 28% and 30%. Could it really be just a coincidence?
Must be. After all, Worldwinner, as it insists in its profile on Squidoo, “is emphatically not a gambling site.”
But while we are looking at the IRS documents regarding reporting gambling gains and losses, and answers on Worldwinner’s FAQ, here are another two bits to compare.
Here’s Worldwinner on how it reports account activity:
Net Winnings are calculated as your total winnings less the entry fees for the competitions that you won. For example, if you played ten $3 entry fee competitions and won five of them for $10 each, your net winnings would be $35. That is, your total winnings of $50 (5 X $10.00) minus the entry fees for the games won ($15 or 5 X $3). Entry fees for games that were not won are not calculated. We do realize that some players may prefer to have their Net Winnings calculated differently, but this is the calculation the IRS has required us to use and, unfortunately, we are not at liberty to change it. After reaching $600 in Net Winnings, WorldWinner will display the following: your total winnings; your entry fees spent in competitions that you won; your net winnings, and entry fees spent in competitions lost.
And now some passages for gamblers from the IRS:
Sweepstakes, Wagering Pools, and Lotteries
…The wager must be subtracted from the total winnings to determine whether withholding is required and, at the option of the payer, to determine whether reporting is required. The wager must be subtracted at the time of the first payment.
and
You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.
See any parallels?
Finally, can someone help me reconcile the answer in Worldwinner‘s FAQ to the question, “Why is money being withheld from me?” with a statement that appears under 2.3 Legality and Taxes, on its Terms and Conditions page?
First, the FAQ answer:
The U.S. Internal Revenue Service (IRS) requires WorldWinner to withhold a portion of the winnings paid to certain players. You are subject to withholding if you fall into one of the two following categories. International players: All players who are not citizens of the United States are subject to a mandatory withholding of 30% on their Net Winnings (their competition winnings minus entry fees for those competitions which resulted in winnings).Unfortunately, there is no way around this. . . .U.S. players who have won over $600 and have not submitted a W-9 form:If you are a U.S. citizen and have won over $600, you are required to submit a W-9 Form for tax reporting purposes. If you choose not to submit this form, WorldWinner is required to withhold 28% of your winnings (your competition winnings minus entry fees for those competitions which resulted in winnings). [bold replaces underlining found on website]
Now, from Terms and Conditions, 2.3 Legality & Taxes:
It is the policy of the Site, and in compliance with United States Internal Revenue Service regulations, the Site may send an IRS Form 1099 or other appropriate form to any person who wins in excess of $600 (USD) on the Site in any given year. Depending on the jurisdiction in which you reside, the Site may also send you additional tax forms. We do not withhold any taxes and you remain solely responsible for paying all federal and other taxes in accordance with the laws that apply in your local, state, province, and/or country of residence.
What am I missing here? How can both be true: “Worldwinner is required to withhold 28% of your winnings” and “We do not withhold any taxes”?
I guess it could mean that they simply hold on to 28% of your winnings and don’t send them along to the IRS. Well?
I want some answers from an internet gaming site that I have played on now and then for the past six years, Worldwinner. I want to hear from others about their experiences on this site.
Although Worldwinner denies being a gambling site, I think I can demonstrate otherwise. I think it has gotten away with practices that are of dubious legality because it has big money behind it. Worldwinner is part of GSN, which is owned by DIRECTV and Sony Pictures Entertainment.
At Worldwinner you pay to enter tournaments, and the winner gets a cash prize that in theory can be withdrawn, but if other gamers are like me, ends up being spent on entering future tournaments. If you’ve ever paid slot machines, you know exactly what I’m talking about.
OK, fine. It was entertainment. No problem. I lost more than I won: no surprise. I have no problem with gambling.
So what is my problem?
Taxes. I believe that Worldwinner can and should be more explicit about what is and isn’t permissable when it comes to taxes.
It is clear about its duty to report winnings to the IRS:
WorldWinner is required by the U.S. Internal Revenue Service (IRS) to report when a US player’s Net Winnings reach $600 in a calendar year. Upon reaching that threshold, you will be asked to submit a W-9 form. If you choose not to submit a W-9, we are required to withhold 28% of your winnings and send them to the IRS.
What it won’t comment on is whether or not “entry fees spent in competitions lost” can be listed as itemized deductions.
Worldwinner says instead:
This information is for your records and further tax processing if needed. If you have any further questions on how to report your WorldWinner activity, WorldWinner advises consulting with a tax professional. Since each person’s individual tax situation is different, we cannot provide specific tax advice to each player.
Come off it, Worldwinner.
We aren’t talking about state income tax, but Federal tax law. Specific advice for each player isn’t needed. All that is needed is to know whether Worldwinner comes under this IRS guideline Topic 419 regarding deducting gambling losses:
You may deduct gambling losses only if you itemize deductions. Claim your gambling losses as a miscellaneous deduction that is not subject to the 2% limit on Form 1040, Schedule A. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.
Either it does or it doesn’t, right?
So why the hedging?
If Worldwinner does come under those guidelines, then it is a gambling site. But Worldwinner says, “WorldWinner is emphatically not a gambling site.”
Then what is it? And how exactly would “consulting with a tax professional” clarify the nature of the beast? And why would the answer differ according to “each person’s individual tax situation”?
Don’t you think that Worldwinner’s/GSN’s/Sony’s tax professionals know the answer? So why send each player scurrying off to pay for someone who is less familiar with the site to research and provide what would likely amount to a speculative answer?
Like all Worldwinner players who itemize deductions, I was left with these options:
1. simply report winnings, bumping up my income, although I never saw a cent of these. 2. report winnings and deduct losses since I itemized and hope that was legitimate; or 3. “consult a tax professional” — pay for what may or may not be the right answer.
Option 1 would cost me money because I’d have to pay tax on my winnings, although these winnings were a fraction of my losses. Option 3 would cost me money because the tax professional would require payment. Option 2 wouldn’t cost me money, but it would cost me peace of mind since I’d have to worry that I shouldn’t have deducted losses and wonder if I’d be audited, fined, and redflagged for audits the rest of my life.
So I chose Option 1. I lost at Worldwinner, and then I lost again.
Next time, I’ll start with my list of reasons why I think Worldwinner is a gambling site.
Wldwinner, it will cost you 