I wonder if they're being regulated by California's Gaming Commission. From my understanding, the only lottery that is authorized to operate there is the official state one. Since it's on the internet, they'd be liable to comply with various other state regulations as well and that would enter into Federal territory. Hmm.
Edit: Yay for Google.
A lottery is a plan or scheme for disposing of a prize (money or something
of value) predominantly by chance to people who have paid something of
value for the opportunity of getting the prize.
Except for the state-run lottery, certain charitable bingo games, and
raffles conducted by certain private non-profit organizations, lotteries are
illegal in California.
A lottery is composed of three elements:
• A prize (for example, money, an automobile, a vacation, or the right to play a free game)
• Payment of consideration to be eligible to win a prize (for example, 25
cents in exchange for a bingo card, or the purchase of a product sold by the sponsoring company)
• Distribution of the prize by chance
If one of these three elements is missing, then the scheme is not a lottery
From the
California Department of Consumer Affairs
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