CLIENT HYPOTHETICAL QUESTION
The general counsel for Peppy Cola, a longtime client, calls you to get your impression on a new promotion Peppy wants to run for its new product Peppy NRG MAX Cola. Peppy NRG MAX Cola is a cola with two times the sugar of regular cola, has three times the caffeine of regular cola, and contains energy enhancing herbs. The new ad slogan is "NRG MAX Is So Powerful - The Energy Is Measured in Octane." Peppy's new product and promotions are designed to build its reputation with young males who are increasingly interested in modified cars and the modified car and bike culture, as made popular by TV shows such as Pimp My Ride, Overhauln', Top Dead Center, and Ride With Funkmaster Flex, and by video games such as Need For Speed Underground, Juiced, Forza Racing, and Grand Tourismo. The promotion features a series of local contests in every state and one national online contest.
The local contests are STOP ON THE DIME contests to be held at race tracks nation wide and are being co-sponsored by the Chevrolet division of GM, though GM is relying on Peppy to clear and run the contests. Peppy will embed a dime on the drag strip at each race track and paint a white X on the drag strip to highlight the position of the dime. Drivers will be required to accelerate a modified Chevrolet Cobolt SS to at least 80 mph before trying to stop on the dime. In practice, a driver will need to slam on the brakes just as the car makes 80mph to get close to the dime. Each run will result in a lot of tire smoke from braking since the anti-lock braking system is replaced in the car with a performance oversized braking system. In the interest of safety, the car's brake pads and tires will be checked every two runs and replaced as necessary. Given the inherent danger associated with driving a skidding car that is doing at least 80 mph when the brakes are applied, the contestants must sign a personal injury waiver and a rights of publicity waiver, and must pay Peppy a $5.00 entry fee to cover gas and insurance costs. The contest will be run in conjunction with the first ever National Hot Sport Compact Night car show, and thus should have a ready crowd of contestants. Any driver that manages to actually stop the car with any of the tires of the car landing on the dime wins the car they are driving. Approximate retail value of the car is $30,000 less wear and tear.
Ignoring tort issues, is the local STOP ON THE DIME are there any federal gaming issues involved with the contest or promoting the contest on TV (cable and broadcast) and Radio (FM and XM)? Explain.
The national online contest is an online based contest with a similar theme to the local contest, though Microsoft is teaming up with Peppy and will rely on Peppy to clear the contests. Contestants must use an XBOX 360 to play. Contestants are presented with a downloadable limited use version of Forza Motorsport 2 (a video game) which simulates driving a modified Chevrolet Cobalt SS (to get an idea see Video 1 or Video 2 on You Tube). Contestants drive the simulated car up to a reported speed of at least 80mph and try to stop on a dime embedded on the simulated drag strip. The game will be served from an Microsoft's XBOX-LIVE server farm in Washington State. Each contestant enters by entering their name, phone number, e-mail address, age, street address, and a code found in the bottle cap of specially marked Peppy Energy Max Cola bottles. Contestants can enter as often as they wish, provided that each code may only be used once. The contestant that lands on the dime in the online car game wins a brand new modified Chevrolet Cobalt SS. The contest will be promoted heavily on Viacom's Spike TV as well as on TLC and MTV, and the car will be modified on MTV's Pimp My Ride and featured on Spike TV's Ride With Funkmaster Flex. Since there is only one prize, there is only one code that will provide the performance attributes in the simulation capable of landing on the dime. If there is no winner at the end of the contest period, the car will be awarded through a random drawing of code numbers.
Microsoft and Peppy will have clusters of XBOX-360's for product demonstration and free contest use at major malls and retail center's nation wide. For those that own and XBOX-360, XBOX-Live will be complimentary for the contest.
Are there any gaming issues associated with this contest? If so, then please explain.
If the contest is deemed to be an illegal gambling contest in Florida, are any federal law violations potentially implicated, and if so, which ones?
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