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I'm a developer and have a poker site that I've created. I have some questions that I need advise on to avoid going down the wrong paths and being taken away in cuffs by some federal agency.

Right now my site is using testnet bitcoins to simulate deposits and withdraws. These testnet bitcoins can be obtained for FREE and have NO VALUE. So the site is basically using PLAY MONEY so I don't believe I've done anything illegal.

  1. If we give away PLAY CHIPS to allow users to play in our games for FREE is that somehow put me at risk of being charged with a crime?
  2. If the site used real bitcoin as a payment system am I violating the WIRE act or any other federal law?
  3. If the site was using real bitcoin, If I never take any RAKE for users to register and play our games does this protect me?

The next two question assume it's okay to use a PLAY MONEY system where user can play game at no cost.

  1. Can I sell additional PLAY CHIPS for some cost? Users could never cash them out so they have no value.
  2. Can I sell services for bitcoin like allowing users the ability to host a private game where they can control the parameters of the game and who can play the game? Still no real $ prize given out my software or site.
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    Gambling laws vary by jurisdiction, even within the United States, primarily from state to state and on Native American reservations. The laws are complex and even the definition of what is gambling varies substantially. There are also Federal laws which affect this, some of which are non-obvious without legal knowledge. There's big money in gambling (billions). Online Poker has been a thing for ~20 years. If it was fully legal, there'd be multiple big companies already doing it and advertising. Your best bet is to get competent legal advice from a lawyer specializing in this area.
    – Makyen
    Mar 25, 2021 at 19:29
  • The short answer here is: Any and all of the activities you've listed potentially open you up to criminal and/or civil liability, depending on jurisdiction within the United States, the exact circumstances, and, potentially, the actions of others. The issues are, frankly, just too complex to reasonably cover in the space available for an answer. Even if you limited this "question" to only one of the five enumerated questions which you've asked, a comprehensive answer wouldn't fit in this format.
    – Makyen
    Mar 25, 2021 at 20:21
  • Even if we are playing for fun using PLAY CHIPS with no cash value violates some laws somehow? If we are using PLAY CHIPS I don't believe it could ever be considering gambling because players are never wagering anything of value.
    – Nutzs
    Mar 25, 2021 at 23:23
  • It depends on the specifics. Talk to a lawyer. For example: if you allow people to set up a table with only the users which they select, then those people may use your software to set up a private game where those chips have real value to those people. Depending on what, exactly, happened and which jurisdiction each of those users is individually in, you could have both civil and/or criminal liability for facilitating the game, with potential jail, fines, or even being liable for whatever amount of money the users lost. The laws are complex and vary substantially by jurisdiction.
    – Makyen
    Mar 26, 2021 at 1:59
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    I’m voting to close this question because, this question is asking for a legal opinion. This is beyond the scope of poker SE. The OP should take the question elsewhere, like an attorney's office. Relying on any answer here, beyond talk to a lawyer, would be a fools errand.
    – Jon ♦
    Mar 27, 2021 at 19:46

1 Answer 1

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Unfortunately, in the USA this is a very slippery slope. The most difficult part of navigating these laws is they vary greatly state by state, in a few states it would be completely legal to offer online real-money gambling (with a license). There are federal laws as well, and I would suggest you get familiar with these laws and call your states gaming commission as well as try to get ahold of any federal office that would handle gaming. It surprised me that I was able to get a hold of someone for a question related to a poker club I ran in my state of California to ask a specific question about what I could/could not do related to playing poker within the club.

I will assume you offer this app/platform to all USA customers and will give my thoughts based on my experiences with these laws keeping that in mind.

  1. Yes, as far as I know this is legal, as there are other play money poker sites/apps out there that are available. You may want to check with a lawyer or gaming commission to see if any disclaimers/legal requirements are needed in order to operate such a platform.

  2. This I would stay away from, as I know there are ways of getting around the wire act like using cryptocurrency. Although the wire act is technically circumvented here, I am aware that there are issues with hosting online poker within the US. This is why popular online poker sites in the US like Americas Cardroom are based in Costa Rica, to avoid any issues this may cause. I would look into it further but if other sites do not operate out of the US then it is likely that you will not be able to operate your site out of the US.

  3. This is an interesting question, many states allow home games that do not take rake and are held within private residences, but many others do not. Federally, it could be allowed but it would require some digging on your part. The main issue is that it is an online service and those generally are not considered home games if they are operated from a central server.

  4. Yes, assuming you meet all of the legal requirements that other applications on the app store meet then this should not be an issue, as there are other sites/apps that do this already within the US.

  5. I believe this would be legal, but I would again check the laws and ask questions before you do anything.

Main idea here is that it is not black and white, checking the federal/local laws is required to guarantee that you can operate safely. There are gaming lawyers that specialize in this kind of law if you are in the position to spend some money.

Using bitcoin is good/bad, it is good because it is untraceable and circumvents the wire act and other laws that prevent real money gaming, but it is bad because using bitcoin raises suspicion, you could be doing illegal things in the background and the law-enforcers have no way of knowing and you could be shut down because of that.

Look into what other apps are doing (WSOP app, pokerbros, pokerrrr, pokerstars.net, etc.) and call the agencies responsible for poker and gambling within the US to make sure what you are planning on doing is legal.

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  • Thank you for your answers. The way you answered was my basic understanding as well. I've reached out to lawyer already but the consult fee seem to be targeted at big business.
    – Nutzs
    Mar 25, 2021 at 23:43

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