FOX agrees to end ‘illegal’ American Idol text lotteries

Here’s an interesting bit from THR today. FOX, NBC and other media companies have agreed to a settlement in a class action lawsuit involving text message games like the “American Idol Challenge” where viewers answered a trivia question for 99 cents.

The lawsuit alleges that the games are illegal lotteries. Apparently, this has been going up and down the courts in California for the past four years.

As usual for cases like this, the law firm gets a bulk of the “settlement” — in this case $5 million while each individual who sent a text gets their 99 cents back.

The media companies also agreed to not hold any contest of this nature for 5 years.

From THR:

Media companies strike an agreement to resolve class action litigation over text message games run for ‘American Idol’ and ‘Deal or No Deal.’ Settlement includes five-year injunction and millions of dollars in pay-outs to contestants and the class action lawyers.

NBC Universal, Fox Broadcasting Company, and many of the production companies behind some of the most successful reality TV competition shows have agreed to an extraordinary five-year injunction that will prohibit them from operating any contest or sweepstakes where viewers make a submission via text message for the possibility of winning a prize.

The text-message contests were alleged to violate California Penal Code § 319, defining an illegal lottery as a contest where prizes are distributed based on chance and individuals have paid some valuable consideration to participate.

The plaintiffs, who didn’t win the contest, argued that their 99 cent text message fee was that consideration.