wow.
SCG just opened themselves up to all kinds of liability. I hope they have a decent lawyer. This seems like the easiest civil lawsuit ever. I suspect a lot will hinge on the official wording of the DCI statement and the official rules of the SCG invitational.
Plus, if this is the tack they are going to take everyone under him should get bumped up and compensated. If the first place prize was 10k, and the second place guy is now first, he should legally get the prizes. This is reinforced by SCG officially giving the second place finisher the first place title. Third place gets second place title + prizes, and so on.
Sure the charity part is feels good, but it's not really relevant to the case.
Someone else in the SCG forums also mentioned the unfortunate possibility of a messy civil suit shinning a light onto unregulated gaming with large cash prizes.
I'm sure SCG consulted with a lawyer prior to issuing that policy and withholding the prize money. I don't see what Alex's standing would be to challenge their decision. Even if he proved a contracted existed, the fact he was found to of cheated by the governing body will be a difficult hurdle to overcome. Additionally, from a strictly rules based standpoint, SCG didn't violate their own rules or break a contract. The rule prior to the statement issued on Friday was that players were to be paid out regardless of standing with the DCI. The new rules indicates they will not pay out players who are banned/suspended by the DCI; they're applying the new rule to him since he had not been paid as of Friday. Wording it this way prevents them from specifically targeting Alex and the fact it was instituted immediately would lead one to believe that SCG has the right to change the rules of their events whenever they want to. As an aside, if Alex has something he could sue on, it would be when, if and how SCG can alter its prize policy. Furthermore, SCG could also argue that since Alex was found guilty of cheating at previous Open events, he obtained access to the Invitational through cheating (fraud) and that would of been disqualified from participating.
The cash comment is probably true; especially in the Midwest and South were the more conservative laws of those regions prevent cash as the reward for games of chance (except Bingo). As an aside, does SCG payout in cash or it is a prepaid Visa? The latter would probably be a way to get out of some of those laws.