The Rise of Case Breaks

Case breaks are an exciting trend on social media. But are they a form of under the radar gambling?

7/18/20233 min read

The world of collectible trading cards has experienced a significant evolution over the last few years, with sports card breaks (or box breaks) becoming a hot trend. These events, conducted in real-time on social media platforms, involve a group of collectors pooling resources to purchase unopened packs or boxes of trading cards and subsequently splitting the spoils. This innovative approach has certainly stirred excitement, but it has also raised critical legal questions around its nature: Is it a form of gambling or just a new way of collecting? This article aims to delve into the complex legal terrain of sports card breaks.

What Are Sports Card Breaks?

Sports card breaks are an increasingly popular method of distributing sports trading cards. A break host (often a retailer) will purchase an unopened box or case of sports cards. The host then sells slots (spots) in the break, which are often aligned with specific teams. When the break happens, the host opens the packs on a live video stream. Any card of a specific team goes to the person who bought the slot for that team.

The Legal Quandary: Collectible Exchange or Gambling?

The primary legal consideration around sports card breaks concerns whether it can be classified as gambling. To determine this, we need to delve into the three common elements that define gambling: consideration, chance, and prize.

  1. Consideration: This refers to the wager made by the participant. In sports card breaks, the payment made to the break host for a slot clearly satisfies this requirement.

  2. Chance: Chance plays a major role in sports card breaks. The value and desirability of the cards in the box are unknown until it's opened, and some participants may receive cards of significantly more value than others.

  3. Prize: The cards received by the participants constitute the prize.

Given these factors, it might seem like sports card breaks fit the legal definition of gambling. However, this interpretation isn't universal. Some legal experts argue that sports card breaks resemble collectible exchanges more closely, where all participants receive something of value in return for their investment.

The 'Rudy Rule' and Other Legal Precedents

Historically, legal issues around similar practices were addressed in the case of the 'Rudy Rule.' In 1999, eBay banned the sale of 'mystery boxes'—parcels with undisclosed contents—on its platform. The rule's namesake, a seller named Rudy, had been auctioning off boxes that he claimed contained valuable items. This ban was justified based on the principle that selling an item without disclosing its value resembled a lottery.

Nevertheless, the 'Rudy Rule' isn't universally applicable. The contents of sports card boxes aren't entirely unknown, as manufacturers usually disclose the minimum number of special cards per box. The primary unknown aspect is which teams the players on these cards will represent, making it debatable whether this uncertainty is sufficient to constitute gambling.

The Role of State Laws

Whether sports card breaks are legally classified as gambling largely depends on local laws. In the United States, for example, what constitutes 'gambling' varies from state to state, adding another layer of complexity to the situation.

Texas law defines gambling in Section 47.01 of the Texas Penal Code. The law states:

"Gamble" means to agree to win or lose something of value solely or partially by chance. A bet does not include:

  1. Agreements to purchase or sell a commodity for delivery at a future date;

  2. Contracts of indemnity or guaranty or life, health, property, or accident insurance; or

  3. An offer of a prize, award, or compensation to the actual contestants in a bona fide contest for the determination of skill, speed, strength, or endurance or to the owners of animals, vehicles, watercraft, or aircraft entered in a contest.

Moreover, it's important to note that the state of Texas has long been strict about gambling laws. Casinos and sports betting, for instance, are largely prohibited except for certain instances (like some Native American reservations and charitable bingo).

Towards A Clearer Legal Landscape

While this legal uncertainty persists, both break hosts and participants should exercise caution. Hosts should seek legal counsel to ensure they're operating within the law. They should also strive to be as transparent as possible, disclosing information about card packs to potential buyers. Participants, on the other hand, should be aware of the risks involved and make informed decisions about participating in breaks.

The sports card break market is rapidly evolving, and it's only a matter of time before the law catches up. Until then, participants and hosts alike should tread carefully, making sure they understand the potential legal implications of their actions.

Disclaimer

This article is intended for informational purposes only and does not constitute legal advice. Always consult with a qualified attorney if you have legal questions related to sports card breaks.wing popularity of sports collectibles and how it is impacting the market. Learn about the most valuable items and the collectors driving the industry.