A fast-growing segment of the collectibles market is attracting legal scrutiny, with lawsuits and arbitration claims asking if the popular practice of “box breaking” crosses into the territory of gambling.
Randomized Sports Card Breaks Draw Lawsuits Over Lottery Allegations
Box breaking is a format that has exploded in popularity in recent years, with sellers opening sealed packs of sports cards or memorabilia during livestreams. Participants buy spots in advance, typically attached to a certain team or a random outcome, and receive whatever items are revealed for their spot when the box is opened.
The idea has been around for ages in hobby shops and collector circles, but its growth online has exponentially increased its reach and its stakes. Some boxes now fetch thousands of dollars, buyers handing over big money with no guarantee they will get items of equal value. Many times, participants leave with cards that are worth a fraction of what they paid, but every so often, a high-value find yields outsized returns.
This imbalance is at the heart of recent legal challenges. Customer groups have sued some of the biggest live-selling platforms, saying some breaks are akin to unregulated games of chance because they are randomized, as reported by ESPN. The mechanics are based on digital wheels, dice rolls, or shuffled allocations to determine the outcome, so it depends on luck instead of a simple purchase.
Most definitions of gambling contain three elements: payment, chance, and the possibility of a prize, say legal experts. There are many breaking formats that satisfy all three, critics say. Some have also claimed that repackaged products, where contents are pre-selected and then re-distributed, are a kind of lottery-style “grab bag,” further raising concerns about transparency and fairness.
Court Outcome Could Force Major Changes in Online Card Breaking Market
The companies involved in the row have strongly denied the allegations. They say breaking is a legitimate extension of a long-time hobby tradition and note that strict policies are in place to prevent gambling-like behavior. Representatives also said a small percentage of sellers on their platforms are engaged in breaking activities.
However, there is no consensus among industry insiders. Some feel the practice has introduced a degree of risk that impacts less experienced collectors more than others, many of whom might not be fully aware of the odds. Others point out that the thrill of the hunt for rare items has long been a part of card collecting, even in the traditional retail environment.
The result of these court actions could have wide-ranging effects. If courts or arbitrators rule that some breaking formats are gambling or lotteries, platforms could be subject to major operational changes. The changes could be anything from tighter regulations to changed sales structures to money being paid to those impacted.