Web site sponsors gambling on grades at 36 colleges
Ultrinsic CEO says his site doesn't promote online gambling, because it relies on skill -- but others aren't so sure
Higher-education officials might have some concerns about a new web site, called Ultrinsic, that is taking wagers on grades from students at 36 colleges nationwide starting this month.
Just asLas Vegas sports books set odds on football games, Ultrinsic will pay you top dollar for A’s, a little less for the more likely outcome of a B average or better, and so on. You can also wager you’ll fail a class by buying what Ultrinsic calls “grade insurance.”
CEO Steven Wolf insists this is not online gambling, which is technically illegal in the United States, because wagers with Ultrinsic involve skill.
“The students have 100 percent control over it, over how they do,” Wolf says. “… The underlying concept is a little bit more than just making a bet — it’s actually an incentive.”
Parents might disagree, however, that it’s a smart way to spend money — never mind whether it’s legal. And a California gambling law expert says they might be right, once you take into account the factors besides skill that contribute to academic performance.
Here’s how Wolf says the web site works: A student registers, uploads his or her schedule, and gives Ultrinsic access to official school records. The New York-based site then calculates odds based on the student’s college history and any information it can dig up on the difficulty of each class, the topic, and other factors. The student decides how much to wager up to a cap that starts at $25 and increases with use.
Alex Winter, a 20-year-old about to start his junior year majoring in economics at the University of Pennsylvania, says he placed wagers through Ultrinsic after getting a flier on campus.
“I said, ‘OK, that sounds like an easy way to make money,’ so I signed up,” says Winter, who bet $20 to $50 each on six of the 10 classes he took last year and cleared $150 overall.
Students at Penn and New York University could play at Ultrinsic last year. Its expansion this month to 34 more campuses comes with new funding, Wolf says. He wouldn’t name the investors or say how much they put in.
Ultrinsic saves its longest shots for fresh-faced high school graduates: If you wager $20 that you’ll finish college with a 4.0 GPA and follow through, you’ll get $2,000 when you graduate. At 100-1 odds, that’s about like a typical seven-team football parlay bet in Sin City. Instead of picking the right side in seven games, though, a student has to win in every class over an entire college career.
Winter, who says his GPA is 3.7, says he never thought about whether his wagers were illegal because he liked being pushed to work harder.
“That never really crossed my mind,” he says. “Looking back, if there were to be any legal issues, I wouldn’t feel that bad because it’s for a good cause.”
Ultrinsic’s lawyers say it has nothing to worry about, because getting good grades takes skill and students are betting on themselves, Wolf says.
Legal definitions of gambling usually list three elements — chance, some sort of fee or wager, and a prize, says I. Nelson Rose, a gambling law expert and professor at Whittier Law School in California.
Carnival games offer prizes for a fee, but skill is ostensibly required to win. Contests advertised on cereal boxes offer prizes and winners are chosen by chance, but the box always says “no purchase necessary.”
With Ultrinsic, things are less clear.