Say there was a 2d fighting game released with online capabilities. The company that released it operates a server, which players subscribe to. The players can set up 16-64 player (bracket style) tournaments on the server, with entry fees from $1-$50. A 10% surcharge is added to the entry fee. Any payout structure is determined by the tournament organizer, such as: 32-player tourney $5 entry fee 3rd, 4th recieve $5 2nd place recieves $10 Champion recieves $140 Would that be totally illegal? If so, how is it different from say, Party Poker? Or any online casino? [Edited by - abstractimmersion on December 13, 2005 1:39:09 PM]

You would need to talk to a lawyer experienced in gaming (gambling) law. While not illegla gambling is very strictly regulated in most locations (and heavily taxed). Ultimately it will depend where the company is based.

Update: I think this would meet the legal criteria for a "contest of skill" rather than a "game of chance." It would probably be more legal than fantasy football, but then I'm not sure about the tournament structure. If anyone knows otherwise or has anything else to say, please do.

Hosting servers for gambling purposes is illegal in the United States. That's why all the poker sites you hear about (Party Poker, Poker Stars, etc.) are hosted outside the US.

Obviously, people still play these games within the US. I don't exactly know what the laws about playing them are, as I believe the US was trying to sue Party Gaming for allowing gambling online in the US...or something like that. (I could very well be wrong on this last point.)

But in any case, I'm positive about what I said in the first paragraph being true. :)

Quote: Original post by Mattman
Hosting servers for gambling purposes is illegal in the United States. That's why all the poker sites you hear about (Party Poker, Poker Stars, etc.) are hosted outside the US.

...

This is true, as far as I know, but if something like this does fall under "contest of skill" as abstractimmersion suggested (and I tend to agree), then you can run one in the US. Examples of (legit) sites that do exactly this in the US are www.SkillJam.com and www.WorldWinner.com.

Though, if you actually plan on doing this with real money, nothing beats talking to a REAL lawyer. =)

[Edited by - Obscure on December 13, 2005 5:01:35 PM]

http://coldfirestudios.com/

These guys used to host tournaments (for $$$) for Space (and the signup sheet still has a little note about it) and they are hosted in the US. I don't know if they contacted any legal representation before they ran any of their tournaments tho.

What about allowing people to wager each other? Say Bill & Bob have a grudge match, the loser pays the winner $50. Is that gambling? I'm in the UK so it's less strict but there's heavy taxation on gambing.