Fantaz Review: Gaming commissions and MLM?

There is no information on the Fantaz website indicating who owns or runs the business.

The Fantaz website domain (“fantaz.com”) was registered in December 2004 and lists Brett Kelly as the administrative contact. On Kelly’s LinkedIn profile, he credits himself as the CEO and President of Fantaz Holdings LLC (registered in Delaware), dating back to 2008:

Fantaz was supposed to officially launch in late 2010 but doesn’t seem to have effectively launched until mid 2011. Fantaz is registered out of the US state of Nevada, however it appears management are primarily based in California:

FantaZ is a business that was started by four friends: Brett Kelly, Terry McEwen, Glenn Cadrez, and Brian Weiner.

Fanta-Z Holdings LLC, is a Delaware LLC. They have an office in Las Vegas, but most of them live (and work) in Southern California.

In addition to the names above, SEC filings also name Robert Crager, Warren Stout, Jen Kusar and David Micale as “Managers” of the company. 37 anonymous investors are also cited as having bought shares in the company.

I wasn’t able to find an executive MLM history for Brett Kelly, indicating that Fantaz is his first MLM venture.

Read on for a full review of the Fantaz MLM business opportunity.

The Fantaz Product Line

Fantaz has no retailable products or services, with players required to sign up to the company website as affiliates – either free or paid.

Once signed up, Fantaz affiliates are then able to participate in a range of online games, with some games paying out cash commissions if an affiliate wins.

The Fantaz Compensation Plan

The Fantaz compensation plan pays out game winnings as commissions. These commissions generate volume points which are also used to pay out monthly residual commissions to Fantaz affiliates using a unilevel compensation structure.

Commission Qualification

In order to qualify to receive commissions, an affiliate must generate at least 10 PV each month. This PV can be generated by an affiliates own spending within Fantaz’s games, or via that of their recruited downline.

Recruitment Commissions

Fantaz offers a commission on the recruitment of new Expert affiliates, paying out $5 each month per three personally recruited Expert affiliates.

Gaming Commissions

Fantaz affiliates can play the various games available on the Fantaz website, earning cash commissions if they win.

All the Skill game tournaments at FantaZ have preset cash prizes for the winners and in larger tournaments for the runner up as well.

The amount of commission won naturally depends on the game being played.

Unilevel Commissions

Fantaz’s residual commissions are paid out using a unilevel compensation structure. A unilevel compensation structure places an affiliate at the top of the structure, with every personally recruited affiliate placed directly under them (level 1):

In turn, if any of these level 1 affiliates recruit new affiliates of their own, they are then placed on level 2 of the original unilevel structure. If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth.

Using the above unilevel compensation structure, Fantaz pay out commissions down seven levels of recruitment. Commissions are generated via the game commissions won by recruited affiliates.

Each month, an affiliates own gaming commission volume is added to that of their unilevel downline. Ten percent of that volume is then multiplied by 30 cents per point, with the resulting commission paid out.

Eg. If an affiliate and their downline generate 100 volume points a month, 10% of 100 is 10 and multiplied by 30 cents results in a $3 commission.

Expert Volume Pools

Each month Fantaz takes 10% of the gaming commission volume generated by affiliates company-wide and divides it into eight volume pools.

Expert affiliates are able to earn shares in these eight individual pools, with shares qualified for based on an affiliates monthly GV (gaming commission volume generated by the affiliate and their downline).

• 10,000 GV Pool – 2% (of 10%)
• 25,000 GV Pool – 2%
• 50,000 GV Pool – 1%
• 75,000 GV Pool – 1%
• 100,000 GV Pool – 1%
• 250,000 GV Pool – 1%
• 500,000 GV Pool – 1%
• 1,000,000 GV Pool – 1%

Shares are equal within each pool, and only Expert affiliates can qualify for them.

Multiple shares can only be earnt in the 1,000,000 GV Pool, with multiple shares requiring an additional 1,000,000 GV points having been generated for that particular month.

Recognition Pools

10% of the gaming commission volume generated company-wide each month is placed into six Recognition Pools. Expert affiliates are able to qualify for shares in these pools, with qualification tied into how much GV an affiliate and their downline generate over specified qualification periods:

• 100,000 Silver Bracelet Pool (quarterly qualification) – 2% (of 10%)
• 250,000 Double Silver Pool (quarterly qualification) – 2%
• 500,000 Gold Bracelet Pool (quarterly qualification) – 2%
• 1,000,000 Double Gold Pool (quarterly qualification) – 2%
• 2,500,000 Platinum Bracelet Pool (half-year qualification) – 1%
• 5,000,000 – Double Platinum Pool (annual qualification) – 1%

Note that qualification periods for the Recognition Pools follows the calendar year and is not tied into when an affiliate joins Fantaz as an affiliate.

Also note that multiple shares can only be generated in the Double Platinum Pool, with each additional share requiring an additional 5,000,000 GV points.

Corporate Leads Pool

Fantaz group affiliates who join the company without an upline each month and distribute them out amongst Corporate Leads Pool qualified affiliates.

To qualify, a Fantaz affiliate must be generating at least 25,000 GV a month (their own volume and that of their downline).

Leads are divided into shares, with the amount of leads distributed to each affiliate depending on how many shares affiliates qualify for. What happens if not enough unsponsored leads join the company in a particular month to ensure at least one lead per qualified affiliate is not clear.

Joining Fantaz

Affiliate membership to Fantaz is available in two options:

• Regular affiliate – free
• Expert affiliate – $49.95 a month

Conclusion

Whenever you hear “gaming” and “commissions” in an MLM company presentations it’s hard not to go past the issue of gambling. One of the primary excuses used by Ponzi scheme players is that participation is much like gambling, with all players aware of the risks they take when investing.

Fantaz are quick to address this potential issue, stating on their website that the company is ‘100% legal and compliant with state and federal laws‘:

FantaZ’s games are not gambling because they are based on the player’s skills and not on luck.

Skill games typically rely on a combination of knowledge, experience, speed, hand-eye coordination, or power of recall.

Skill-based games are legal in most U.S. states and throughout the world.

FantaZ uses advanced technology to prevent users from participating in cash games in the few states that do not allow skill games for money, or to limit the types of games that can be played in those states.

I’m not sure about declaring yourself to be 100% legal and compliant, but as I see it there’s a big grey area with Fantaz over the question of where does the winnings money come from?

Commission winnings money has to come from somewhere and if it’s from affiliates (Expert affiliates pay $49.95 a month to participate), then effectively, even if you do require your affiliates to play “skill-based” games, you’re taking new affiliate money and paying it out to those already in the system.

Some “tournaments” cost money to enter but again this is still money source from affiliates.

How this would translate over legally I’m not really sure but on the MLM side of things I’m failing to see any retail source of revenue within the business opportunity.

One could argue that free affiliates constitute retail however they are able to generate commissions and have access to the compensation plan, clearly defining them as participants of the business opportunity and hence not retail.

Again, the nature of Fantaz’s business opportunity draws the question of how this would play out regulator wise but on paper, it appears to primarily be an affiliate funded game (no pun intended).

Then of course there’s the blatant recruitment driven pyramid scheme component of the compensation plan, where if a paid Expert affiliate recruits another Expert affiliate, they earn a $5 commission:

The Expert ZBO Width Bonus rewards Expert ZBOs for building width in their level 1 with other Expert ZBOs.

For each of these qualified ZBOs the sponsor receives $5 per month commission as long as they both stay commission qualified. There is no limit to the potential of this reward.

Isolated alone this “width bonus” drags the entire Fantaz opportunity into question, let alone any potential grey areas exhibited by virtue of combining online gaming and MLM.

Curiously, despite the obvious problematic nature of the width bonus above, Fantaz state in their affiliate “terms and conditions” that:

18. Enrolling Not Compensated.

FantaZ ZPLAYERS may sponsor other ZPLAYERS into the FantaZ program, and such persons may be enrolled if otherwise qualified.

However, ZPLAYERS are compensated only on Personal Tournament Volume (“PTV”), Group Tournament Volume (“GTV”) and Commissionable Tournament Volume (“CTV”) as set forth in detail in the ZPLAYER Compensation Plan, and never for enrolling additional participants into the program.

What Fantaz are basing the above on I have no idea but clearly the company pays out a $5 commission on the recruitment of new Expert affiliates.

All in all when you combine the grey area of online gaming and MLM along with the width bonus recruitment scheme there’s probably too big of a question mark over Fantaz as a business opportunity to take seriously.

To their credit Fantaz have been around a few years now and state on their website they have 40,000 members and have paid out $82,000 in game commissions, but I’d probably still sit this one out.