What should I be aware of before hosting an online paid tournaments for video games? 1 Answers as of June 06, 2014

Hello. I run a large community of gamers for an industry leading, skill based, online computer game. We are interested in hosting paid entry tournaments with cash prizes. Users would only be able to pay an entry fee and would not pay additional money or be allowed to bet on other users play. I have secured permission from the publisher of the game to run the tournaments, but I would like some advice on what questions/concerns I should be aware of, before talking with an attorney. 1. Does hosting online paid tournaments with cash prizes fall under gambling laws in the state or Federally? 2. Do I need to be concerned about laws in other states where we have no presence? If so, suggested states? 3. What is the best state to run this venture from or should we look at another venue? 4. Are there any questions or topics I should make sure to cover with an attorney? Thank you very much for your help and assistance!

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Lawyer for Independent Media | Sue Basko
I think your questions sound good and you should get a lawyer on board immediately. If the lawyer is experienced in this area, they will be able to tell you things without you even asking. One of my concerns would be what to do about those under 18 who will surely want to be in the competition. Another area of concern is to follow privacy laws as to what information you will gather and what notice you will give about that. Privacy laws are much greater for those under age 13, so you may want to limit plan to those age 13 and up, unless the parent joins for the child and supervises play at all times. I think California is the best state to run anything internet from, because the laws are well developed. Yes, this means that California has more restrictions, but they are the right kind of restrictions based on real life experience.
Answer Applies to: California
Replied: 6/6/2014
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