Is it technically a gambling site if there's no pay-out?

August 18, 2006 11:05 AM

I've made an online game that involves gambling with worthless chips. If I were to sell (but not buy) these worthless chips, would I become subject to various laws concerning gambling? What if I sell membership, and that comes with a free allotment of chips? Basically I want people to feel like they're actually losing something when they lose to keep the game interesting, but I don't want to run an actual gambling site where people play for profit. If it matters, I'm thinking about something like $1 for enough chips to last a week or two, and I'm in the US.
posted by scottreynen to Law & Government (11 answers total)

Check out gpoker.com -- it's play money and there's no cost for entering, but the action is rather fast and furious and people start to take it very seriously. Why? Because of the top ten lists, the ranking next to your name, the badges you win according to where you were in that month's competition... And best of all? Every month chip counts reset, giving everyone a fresh slate. The site does a lot of really smart things to ensure that you'll want to keep coming back to play poker there, but it never charges money and it never rewards money. Although it's not quite what you're asking about, check it out to see how gpokr accomplishes making a player feel like they've won or lost something tangible without charging money. Much of this, though, I believe hinges on competing against other players, so if this is just a player-against-the-house game, then I guess disregard.
posted by incessant at 11:14 AM on August 18, 2006

Thanks, incessant. I have gpoker on my list of sites to look at. I think someone posted it to the blue a couple days ago. Currently what I'm doing is a mix of player-against-player (e.g. poker) and player-against-house (e.g. slots) play. I'm not completely set on charging for membership, but I'd like to know what sort of legal responsibilities I'd be taking on if I were to do so.
posted by scottreynen at 11:30 AM on August 18, 2006

I think you'd definitely not run afoul of any laws if you charged an access-fee instead and specifically said it was "entertainment poker" and not to be gambled on (but what people do on their own outside of your business is NOT your business).

BUT... IANAL.
posted by shepd at 11:30 AM on August 18, 2006

Quick note- gpokr.com, not gpoker.com (which is Golden Palace)
posted by mkultra at 11:33 AM on August 18, 2006

IANAL...

With the recent crackdown in the US on online gaming (where even linking to online casino affiliate programs can run you afoul of state laws), it seems like an awfully big chance to take without seeking sound legal advice.

The amount is fairly meaningless (at least up here in Canada) when it comes to lottery/gambling concessions. I've heard of small charity bingos being shut down.

As for membership being a viable option... it seems a bit fishy to me, so if the above becomes true, I don't really see it being a barrier to enforcement.
posted by Vantech at 12:09 PM on August 18, 2006

I think the real issue here is whether the chips can be cashed in. If not, then there really isn't any gambling going on, legally speaking. It's only gambling if the players are actually capable of winning something (beyond simple enjoyment).
posted by Steven C. Den Beste at 12:20 PM on August 18, 2006

Ah, SCDB just said what I came in here to say. If there's no way they can get their $1 (or more) back, then they're not gambling. The only thing I add is that, unfortunately, cuts both ways. If "want people to feel like they're actually losing something when they lose," that may not work, since they'll generally be smart enough to realize that they lost their $1 when they signed up for membership, not when they lose their chips at the table. IANAL.
posted by DevilsAdvocate at 1:23 PM on August 18, 2006

Just call them "game pieces."
posted by desuetude at 1:36 PM on August 18, 2006

I think the real issue here is whether the chips can be cashed in.

There will be no way to sell chips on the site, though obviously I can't prevent people from selling their accounts along with the chips off-site. I hoped that was all that matters, but I thought maybe someone would come up with an counter example.

they'll generally be smart enough to realize that they lost their $1 when they signed up for membership

Right, but how much play they get out of that $1 depends on how well they gamble, whereas if it's free, they're only risking the trouble of creating a new account.
posted by scottreynen at 1:56 PM on August 18, 2006

Right, but how much play they get out of that $1 depends on how well they gamble, whereas if it's free, they're only risking the trouble of creating a new account.

Reread incessant's post... there are way to manage the incentives via the game interface without charging any money. Give some kind of "points" for either account age or time spent playing, something that people can accumulate over time that cannot be quickly obtained by dumping one account and starting a new one.

To solve the "bottomless wallet" problem, make a 24 waiting period before refilling people who have run out of chips, and/or create rankings that automatically drop you when you refill your stack. I can't offer legal advice on whether you'd be in trouble with the law for selling the non-refundable chips, but there are so many ways around it, why bother?
posted by rkent at 2:59 PM on August 18, 2006

In retrospect, I shouldn't have explained why I'm asking, as it's irrelevant to my question. Let's assume I'm definitely charging for chips that will be used in a gambling game. Do I need to approach that any more cautiously than charging for a t-shirt? How do other sites handle pay-to-gamble games?
posted by scottreynen at 4:18 PM on August 18, 2006