Swedish Gaming Board file World Ventures report
I’m not sure when exactly the Swedish Gaming Board began investigating World Ventures, but it appears that they’ve recently concluded an investigation into the company.
The verdict?
A report has been filed with the “Police Authority” in Stockholm.
In the report, the Swedish Gaming Board provides details on their suspicions that World Ventures has breached Sweden’s Lotteries Act. Specifically, World Ventures is involved in an ‘alternative chain letters game for the promotion of an organized lottery abroad‘.
A “chain letters game”, as defined by Sweden’s Lotteries Act, is
a game where the possibility of winning principally depends on the number of participants that gradually enter the game.
Or in the MLM industry, otherwise known as a pyramid scheme.
In the BehindMLM World Ventures review I myself concluded as much, given that World Ventures has no retailable products or services and generates revenue solely through affiliate membership fees.
On the Swedish Gaming Board website, the regulator advises
We are an agency with expertise in issues related to gambling and lotteries. It is we who must ensure that the Swedish gaming is legal, safe and reliable.
The Agency is headed by a board appointed by the government. The Director on the Board, who has full responsibility for the business.
And if you’re wondering why the Gaming Board has submitted a police report instead of taking action against World Ventures themselves, that’s because
are not permitted to investigate suspected violations of gambling and lotteries. But we will inform the authorities in charge of solving crime, namely the police and prosecutor. This is done primarily by the police.
In order to establish suspicion of violations an investigation needs to be carried out, but as above, anything beyond that in Sweden is handled by the police (who begin their own investigation).
I’m not sure what the timeframe for a police investigation typically is in Sweden for pyramid schemes, but I imagine we’ll hear something in the first half of next year as the investigation continues.
My thanks to the BehindMLM reader who forwarded their email correspondence with a Swedish Gaming Board compliance officer, who advised them that a police report has been filed (dated 19th December).
At the time of publication nothing is up on the Gaming Board’s website, but that might be due to it being close to the end of the year. If anything is officially published I’ll be sure to link to it here.
Norway’s Gaming Board opened up a World Ventures investigation earlier this year. Last I heard they were still in the process of exchanging information on the company, with a decision expected to be handed down shortly.
Most American jurisdictions use the term “endless chain”.
Here’s a list of all 50 state laws as provided by our friendly MLM attorney KT
http://www.scribd.com/doc/21293376/MLM-and-Pyramid-Laws-in-50-States
HKJ. There are plenty of “legal” companies but just because they are legal doesnt make them ethical or practical for the average person.
Look for a company that publishes their financial reports. One that has more customers (at least 4 times) than distributors, which shows the products actually sell. Look for one that has and Income disclosure showing more than 30% earning an income above operating expenses which is normally $2500 – $5000 a year. And, One that is not tied into manufacturing and has multiple product lines in multiple markets.
If they mention ONE word about “being legal” or talk about their “legal team” RUN far and FAST.. REAL companies do not have to even mention Legality. Rule of thumb is, If they have to “say” they are legal. THEY ARE NOT.
I like to think of it this way. Does a person with NO drug or alcohol issues have to go around telling people they are NOT an addict? Would a “normal” person have to go around telling people they are “normal” ??
Spot on advice. I now always compare to the Big 3…Avon, Mary Kay, and Tupperware. Wanna know just how strong their retail is?
There is a MARKET for vintage, collectible Avon and Tupperware. My grandmother was buying Avon’s Skin So Soft years ago, and it is still one of their mainstays. And Tupperware has really outdone themselves with new product offerings over the years, while their originals are nothing short of American icons.
And all women know that if they want to look younger without surgery or needles, they stand a good shot at it by committing to Mary Kay’s superior time tested and proven products. Get the picture? 😀
Thanks Naabo. Something I can add is that many companies dont give out the proper information to make sound business decisions on. (there is probably a reason for that).
One way to investigate is to look at the DSN top 100 reports. Look at the number of distributors compared to the sales $ volume. If a company has 120,000 distributors and $144M in sales that means they have virtually ZERO Real or repeat customers. Typical autoships are about $100/month. $100/month X 120,000 = $144M.
If you want to take it a step further find out what the companies autoship requirement is then do the math from there.
Grantid MANY companies put their customers in the pay plan which skewes this number. There is a reason for that too. No right minded accountant, marketing department or sales company would EVER want to include their customers with their sales force.
How can you measure sales to effectively grow a business without accurate info. Again there is a reason they do that and its to hide their actual performance.
Obviously we know not every individual performs, but look for a company that does at least. $400M for every 100,000 distributors. THIS is a great indicator of the products being in demand or not.
NOTE: DSN shows NET $volume. For product based companies you can add about 40% to figure the GROSS sales volume if they have a retail profit for the reps. For Service based it a bit of a different conversation.
The profit margins are only about 5% at best so dont get fooled by large overall sales volume. They might do $500M in sales BUT they would only have $25M to pay out in commissions. VS a product company who would have $300M going to the reps.
ANYONE can sell ANYTHING they believe in if its in demand. It doesnt matter if its a product or service. Personally I tend to gravitate toward the higher profit margins although their is companies that have both, so you dont have to alieniate certain markets.
Great info
What the Swedish board of gamling does in cases like this is more like having a whisle-blower function, where people can tip them off and thus collecting material. After this, they decide whether to carry on and send the matter further to the police – or not.
The board is not entitled to carry on its own investigations, asking for materials e.g. income disclosure, structure plan or carrying on detailed interviews with the company concerned.
It is a rare modus operandi for different reasons;
The level of expertise is low and dissimenated on several authorities (Gambling Board/Consumer Board/Police)
And once it gets to the Police, where this case is now, it must be picked up by a prosecutor who takes it all to court, which in turn must come to the conclusion that the company’s activites are criminal and people must be held responsible.
If we compare the Gambling Board’s possibilities with the Board of Finance’s possibilities to close down banks and financial businesses if it sees illegal activities, the Gambling board is completely short of muscles.
Or, The Gambling Board’s officers are just lazy/or short of time. I happen to believe that the board has more jurisdiction than it claims.
Accoarding to the Marknadsföringslagen (Law of marketing) all pyramid schemes are illegal, as are businesses where the majority of its turnover comes from recruitment instead of from selling products.
It can not be like climing Mount Everest to conclude that the membership in WV is not the product – the trips are.
Supplement:
And here, in this case with independent representatives that build up their own businesses, paying their own income taxes and social fees, it is also a matter whether their turnover comes from retail sales of trips vs recruitment.
To me, the case should be closed easily if we should start applying the law and not only claim that we do.
The Norwegian version of it can clearly make decisions, e.g. banning a program from operating in that market (“restraining order”). It can’t prosecute anything, that will require a different type of authority. But it can make decisions, and issue “administrative fines” if a decision is violated.
The Norwegian version also have the formal powers to collect information from the party/parties.
The Swedish Gaming Board had some jurisdiction issues in 2009 or 2010, resulting in that all pyramid scheme cases were delayed or temporarily stopped. I’m not familiar with what those problems were about, but I know there were some “issues” there.
@ M_Norway
Yes, I am aware that Lotteritilsynet has the jurisdiction to proceed with its own investigations. Lotteriinspektionen claims it does not.
To me, it sounds strange indeed, as a supervision authoroty it must definately have some kind of influence, otherwise there is absolutely no reason why we should let our tax money support its activities of protecting the Swedish citizens. And this is the same reason that I believe it has more jurisdiction that its officers claim.
The key here, and the problem as I see it, is that the acitivites of WV will either lead to convicions (now that its on the police’s table)or carry on its business as usual.
Due to the lack of putting efforts in the matter from the board, it all comes down to the competence of the individual investigator, so let’s hope it’s someone who takes its mission seriously and has the capability to separate WV’s product offer from the business opportunity.
I believe your investigation will become a bench-mark for the Swedish decision.
There is a big difference between recruiting to become profitable and recruiting BECAUSE you are profitable.
In my mind and correct me if I am wrong but If you cannot pull a profit without recruiting or having a sales team, then you have no legitimate “business” to offer for sale.
Plain and simple, if you cannot or do not make a significant profit by selling a product or service with ZERO affiliates, IBO’s, reps (or whatever you want to call them) on your “team” then its a ponzi deal by true definition.
How can someone possibly “sell” an opportunity, that is not profitable on its own, and say otherwise is completely baffling to me.
Like what you’re saying, touch base with me if you can.
@BJAM
Do you have any source? Or do you have more information about the source?
World Ventures has made many claims, but I’m not sure what an “EOY Winner” is.
Some WV affiliates have been referring to WV as Ernst & Young “Young Entrepreneur of the Year” award winner when they were only a finalist for that one year.
About the nicest summary there is. 🙂