So I was thinking about this, what if you had an app where there would be hundreds of thousands of players competing against each other, in a MMO fashion, and the games would go in rounds, like weekly rounds, and there was a cash prize at the end each round for the single winner. I’m pretty sure thats legal isn’t it? Any company can set up a game where a cash prize is offered in some contest, with no legal stipulations.
Now what if the cash prize amount was basically a certain percentage of the in-app purchases for that round. Is that still legal? Because we are getting into a scenario here that is a little more like a lottery. The prize is dependent on how much the users purchase.
It depends on where you’re based. As a general rule, you can’t give cash prizes for games of chance (like lottery, betting on horses, etc.) where your own skill doesn’t come into play, unless you go through all the gambling laws.
However, this is a very hazy, gray area, since people debate which games involve skill, so I would say seek legal advice or just don’t do it. Too much risk.
I wouldn’t do it . For one you have all types of legal issues here . But you could get away with giving out Game Credits(although you’d have to make it clear the distinction between earned credits and paid for credits) .
Like think about all the work in paying users once they’ve won , and minors will probably play your game at some point and before you know it your on the news as they say your game lets kids gamble .
eSports cash prizes are legal, you just have to follow through with your end of the tax reporting obligations.
Though there are still going to be legal issues, it would be somewhat less problematic to offer an actual prize rather than cash. Just make it a prize many people would want. Even still, you really need to get qualified legal council before doing anything like this or you’re going to end up getting sued or shut down by some regulatory agency.
Giving out cash from a web site is not a good idea.
It’s an open avenue for money laundering.
Also you’ll have to make 105% sure that there’s no cheating or bug exploitation involved.
There certainly is a legal way to do this. I don’t think it’s as easy as creating a small app with Unity and selling it over the iTunes store, though.
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