I got interested in business models involving prediction markets and I am wondering at which point such a thing is considered gambling.
Here are the cornerstones:
Is this gambling? Which aspect makes it so, if yes?
Do you know about how this topic is dealt with in the US compared to the European Union?
Gaming is legal gambling.
In the eyes of (my understanding of) the law, your proposed model becomes gambling when the person has the option of converting their virtual dollars to something of value.
I actually have been in a similar position for awhile as I've been tossing a few angles around for a venture and when it comes to the US, I recall reading awhile back some exact definitions the governments use when it comes to defining gambling.
This is far from a full guide as you seem to be overlapping with securities along with gambling regulations.
This provides a wealth of links to official government and reputable codes/laws/etc. (which is why I'm providing a Wikipedia link: http://en.wikipedia.org/wiki/Online_gambling )
In addition, this ruling is something which was brought to my attention by a contact of mine who does angel investing -- as while I thought it was just for online poker and such, it also extended to numerous other entities:
And it all went down earlier this year.
Aside from that, I believe that as long as the games are for virtual currency, you are good. When you do cashouts for tangible products, it's gambling.
Zynga however mastered the art of getting people to pay money for virtual currencies and goods for games -- so that's probably a good company to focus a case study around.
Long answer. The definition of gambling includes skill vs. luck. There are some who are even trying to de-list poker as gambling, but ultimately there is luck involved. Why is picking stocks not gambling? Good question.
Now to answer your question - if there is no money being exchanged by your users to you for the credits - it probably doesn't matter.
I assume you will be charging vendors to put coupons on your site and the vendors ultimately don't care if 1,000 people redeem the coupon because it means business.
I'm not sure it really answers your question, but I think you have to ask - does it matter? If it's truly free to play - I think you could look at companies like Zynga or any gambling app for precedence. Your reward system seems completely separate from the act of gambling so I'm not sure its as litigious as edralph implies.