LAS VEGAS - Think you're going to ace freshman year? Want to put money on that?
A website called Ultrinsic is taking wagers on grades from students at 36 colleges nationwide.
Ultrinsic will pay you top dollar for A’s, a little less for 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.
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“The students have 100 percent control over it, over how they do. Other people’s stuff you bet on – your own stuff you invest in,” Wolf said. “Everything’s true about it, I’m just trying to say that the underlying concept is a little bit more than just making a bet – it’s actually an incentive.”
Your mother may disagree, however, that it’s a smart way to spend money – never mind that it’s legal. And a California gambling law expert said she may be right, once you take into account the factors besides skill that contribute to academic performance.
Here’s how Wolf said the website 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, said 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,” said 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 said. 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 said his GPA is 3.7, said he never thought about whether his wagers were illegal because he liked being pushed to work harder.
“That never really crossed my mind,” he said. “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 said it has nothing to worry about because getting good grades takes skill and students are betting on themselves, Wolf said.
Legal definitions of gambling usually list three elements – chance, some sort of fee or wager and a prize, said 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.
“It’s not entirely within the control of the (player),” Rose said, offering the example of a professor of his who gave everyone A’s after learning he wouldn’t be considered for tenure. Another teacher could be equally capricious in handing out C’s. “But it is mostly within their control.”
And Winter questions how well Ultrinsic’s algorithms set odds: Ultrinsic bet 2-to-1 that he wouldn’t get an A-minus or better in an African history class he’s heard most students ace.
“I shouldn’t have made $100 on top of the $50 I got back,” Winter said.
Still, a common test to determine the role of skill – whether you can purposely lose – seems to apply to Ultrinsic, Rose said.
Given the role of skill, Ultrinsic might be legal under federal and state law, Rose said. Tell that to Internet poker players, who have been fighting a 2006 federal ban on online gambling, hoping to get online card rooms legalized.