My idea: pay a small amount (~ 2$) to enter prize draw and to win 50$ per week.

Hi guys
I would like your feedback on a concept I have for a website: users play buying and selling "stocks", and if they pay a very small amount (say less than 2$ per week) they can enter the where the best "portfolio" of the week will win a 50$ Amazon gift certificate.

What do you think about this idea? Are values (2$ for a "ticket", 50$ as the prize) right? Do you think players will come and play (note that the game should also be quite fun by itself...)?

Thanks for your ideas and feedback!

 

$2 for $50 is not a very impressive prize... imo

i mean you can buy a scratch card for £1 with a chance of winning £100,000 etc

 

Well, yeah, but what's the chance in winning it? This is the problem: if you pay 2$ to win 50$ and there are only 2 players then that's a very low price (should be 25$, that's the "actual" value of your "bet") - while if there are 1,000 players than it's way too much (based on the same calculation, your actual value is 0.05$, and this should be the price to pay)

So, another solution could be to give away, as the final prize, HALF of the total money collected (I would keep the other half as "administrative fees"). So, of there are 100 players who paid 2$ each, the winner's prize would be 100$ (2$ * 100 / 2) - while if there are 10,000 players the winner would bring home 5,000$.

Is this a better mechanism? In this case, thou, how can I create a "critical mass" of users ? And, after all, do you think this idea could work?!?

Thanks!

 

ah not bad a trick, but you should keep it free initially, then take $2 from members once they get used to playing it for free

 

Would this be considered gambling? If so, you may need a license.

 

Ok guys and dolls, IIUC you think that giving away half (or maybe even more) of the jackpot is a good idea, right?

Well, thanks for all your suggestions: as soon as I'll have the site running (maybe in beta...) can I write you here again so that you give me your feedback?

BTW, I'm a PHP programmer and at the moment I'm quite free, if anybody needs a hand on a project (a few of my sites: http://www.tradeover.net, http://www.votivation.com, http://www.peaknews.net (rolled my own blog script), http://www.trovanome.it, http://www.wineastinews.it (sorry these last two are in Italian))

Cheers!

 

Sounds like a good concept, but be very careful. Any time you start talking about stocks you may raise a red flag. There may be some legal issues with this. There's a lot of stories lately about the SEC getting involved in things.

I'm not saying it's illegal, but you should get legal advice before getting too deep into it.

I do like the idea though.

Have a great day,

Paul Falardeau

 

I don't think you'd get large scale paid participation for a few reasons:

1. There are a ton of contests already online with bigger prizes and no fees whatsoever.

2. If it's a new site, you have no reputation. Most people still have skepticism about giving someone money online. If you've not been around a while with a good track record, they may instantly assume you're scamming them, just trying to collect $2 from as many people as possible, and then you'll disappear.

3. $50 isn't a very big prize anymore. You may be better off offering something more tangible.

Jenn

 

All your points are good, here are my answers:

1) yes it's true, but they ask you "something" in exchange, be it your email AND postal address, a subscription - in my case it's just a small "lottery" where you buy a ticket and you get the right to aim at the Jackpot

2) providing a clean and professional site, good linking from other established sites (like the one in my sig, maybe a few, big directories) and, above all, a full explanation of who's behind the whole thing could make things better

3) as I said, my idea is to create a Jackpot and then distribute it (after taking out the "administrative fees") to the players - so the amount that could be won depends on the number of players, and can be quite big

I have another question for the forum: do you think I should give prizes only to the winner of the weekly contest or give smaller prizes to a higher number of players (first 3? 10?) In this latter case, what do you think should be the percentages for each winner?

Cheers!

 

Just about anyone can be listed even in big directories though. It's not likely to be enough to build trust. I'm not saying it can't work. But maybe a free option or intro period until at least the first prize is given away to prove you're actually providing them (and I'm not sayng you won't... just that it's a concern I'm sure people would have with a brand new site), and then move to the other model. You may even be able to find a way to keep it free, (or move to a completely free system) that would monetize even better for you ... such as building a reputation, and then approaching companies with relevant products to provide and sponsor prizes, and having them pay you sponsor fees for the promotion. Free is almost always going to lead to more interest, and with a large enough audience, a sponsor system wouldn't be too hard to set up.

I think, in regards to your new question, that it would depend on how big the prize was. If it ends up being low during one contest, splitting it between 10 people would certainly be a bit much. And if the prizes fluctuate in value (and maybe I just misunderstood that), then there would be no way to promote a prize value, and it could end up pretty miniscule once in a while if it's split up too much.

Just be careful with this kind of idea. Check with government sources and make sure you don't fall into the "sweepstakes" category, because different countries and different states even have laws regulating them and who's eligible to participate. So you might not be able to open it up to everybody. I'm not sure what the rules are... just suggesting it would be a good thing to look into.

Jenn

 

Well, first of all thank you for your reply.

I see two issues here:
1) if the game is considered a sweepstake or a lottery I could run into legal problems
2) users might think it's a scam

About 1), in order to "win" the game you need to do stuff (as I said it's kind of a stock simulation - only not with stocks): in this case, IIUC, the thing is not a sweepstake anymore but become a CONTEST - read here: http://www.fredlaw.com/articles/marketing/mark_0310_srb.html - and under a legal point of view I should have much less problems (anyway, I guess I'll open a thread in the 'Legal Issues' board of this forum...)

2) is a bit trickier, I think: a good thing would be to have the testimonials of previous winners but:
- people could think they are fake
- I cannot have winners if nobody plays (it's a chicken and egg problem...)

My problem with free memberships is that I'm not sure the game is so fun and exciting by itself (it could be for a short while) and so putting money in it could be a good way of having people come back and play it.

The ideal solution, at least at the beginning, is to have sponsors who offer prizes: but how do you find them - especially for a new site?!?

Thanks for your time!

 

office Pools are only legal because exactly one person keeps *all* the money. In otherwords, all participants are equal.

Anything else is gambling; some people have a higher probability of gain than others. In the typical scenario the "house" wins the most.

So if you have no intention of giving all the money to one individual who paid into the pool, you're going to need to speak to the local governments about starting up a gambling site. And good luck with that.

You will also need to keep spotless records to prove that all parties in your game were equal participants.

 

Uh oh... So you mean that if I collect an "administrative fee" that's gambling?
In any case I don't like this option since, as you say, I should keep records and proof that all players are equal - and that's a PIA if somebody really wants to screw you.

So, another idea: what about prizes ("solid" prizes, I mean an IPod, an Amazon Gift Certificate, ...) given only to Premium Users - who will pay say 5$ a month to become Premium?

What do you think about this - under a legal AND business point of view?

Thanks every body, cheers!

 

What you are doing can technically get you into trouble, even if it's it's legal. But you will probably not recieve much attention unless this site gets really HUGE. Yes, you can offer a premium acct but make sure you stress that the premium acct gets more advanced features, and the ability to win cash prizes is just a side bonus. Look at BlogShares for a good example of this.

As a business idea, getting a critical mass is extremely hard. Even if everything is free, you will still have trouble gaining participants. If you want to do something that is a good business idea, you need to make it real like TradeSports. Research shit about creating an offshore gambling company.

 

I fully agree on the fact that the risk is to make a gambling game out of my idea, and that's NOT something I want (for example, in my country - Italy - the TradeSport site has been blocked by the State...). So probably the best idea is to offer a premium service that:
- won't have any ads
- will have a few more features (uhm... still need to figure out which ones, thou...)
- will offer BIGGER PRIZES (that should be the main driver, right?)

About the critical mass: why do you think it's so hard? A good thing about games in general and these kind of games in special is that they create a quite strong loyalty in your users - that keep coming back to check their portfolio and see how they rank against the others: for example I've got an Indian specific trading simulation, and it makes an average of 1,200 adsense impressions per day with only 750 users...

Anyway, I'd be really happy to hear suggestions about how to make this critical mass...

Regards!

 

What exactly do you think gambling is?

to risk something of value for the chance of winning a prize

Risk $2 / Win Prize = Gambling

 

a site like yours always exists apart from I don't think there's an entry cost.

I used to be a member but i can't remember the site name anymore...

 

IMO its a stupid idea.

Trying to be realistic here, between the possible legal problems...and just the logistical problems of getting any "players" its not worth your time.

BTW, what you just described is basically on online version of 50/50 tickets...you can go a sporting event, spend $2 on a 50/50 ticket and win tens of thousands of dollars.