Starting a New sports app and unsure of regulations

[cjmeyers321]

I am currently living in Iowa, USA, and a few friends of mine are thinking of starting a new app involving a type of fantasy style contest for the UFC. I am unclear on our options for two different categories.
The first is if we will run into any push back or legal problems from the UFC for having a contest involving their name, and or if we choose to expand to other MMA organizations such as Bellator or stuff of that nature.
The second is if it is considered illegal to take money from people to register for the event and give out a cash prize with the administration (myself and the two people starting this with me) taking out a percentage for keeping track of the contest and issuing the winnings at the end. I am unclear if this is considered gambling. If it is considered gambling and we were unable to go that route, would it be possible to take cash and then issue prizes such as cars, electronics, and other things of that nature.
I would appreciate any advice and anyone who could explain to me the options my friends and I have in this business we are trying to get started.

Thanks and I look forward to the responses.

Cory

 

[Zigner]

Most parts of the country call that bookmaking.
The participants are the ones that are gambling.

Ahh, I see that Iowa does too: https://www.legis.iowa.gov/docs/code/725.13.pdf

 

[quincy]

I am currently living in Iowa, USA, and a few friends of mine are thinking of starting a new app involving a type of fantasy style contest for the UFC. I am unclear on our options for two different categories.
The first is if we will run into any push back or legal problems from the UFC for having a contest involving their name, and or if we choose to expand to other MMA organizations such as Bellator or stuff of that nature.
The second is if it is considered illegal to take money from people to register for the event and give out a cash prize with the administration (myself and the two people starting this with me) taking out a percentage for keeping track of the contest and issuing the winnings at the end. I am unclear if this is considered gambling. If it is considered gambling and we were unable to go that route, would it be possible to take cash and then issue prizes such as cars, electronics, and other things of that nature.
I would appreciate any advice and anyone who could explain to me the options my friends and I have in this business we are trying to get started.

Thanks and I look forward to the responses.

Cory

You are likely to run into legal problems with your plans. I recommend you sit down with an attorney in your area before investing too much time, energy and money into developing your app.

Some areas to discuss with your attorney: trademark laws, copyright laws, privacy/publicity rights laws, gambling.

 

[FlyingRon]

Iowa, Federal, and most state statutes define gambling as taking anything tangible (money, etc...) for the promise of a chance of winning something else. There's limited exemption for fantasy spots, but I can't possibly see how a UFC or any similar non-team sport. To fit in the exemption you have to base your scoring on the statistical rules of individual players that do NOT correspond to the outcome of any particuar game or a particular athlete's performance in any one game.

That lets out fights, tennis match, golf, etc... It permits you to make up a "team" distinct in composition from any real team and use the individual player's stats within it.

Note that, you indeed may run afoul of UFC on this as well. The case law is far from decided on cases where the fantasy league is opposed by the league/team it is based on.

Further, while there is an exemption in the FEDERAL law against internet gambling for fantasy sports, IOWA law still makes it illegal. There was an attempt to legalize it earlier this year which did not pass.

 

[cjmeyers321]

Thank you

Thank you to all that replied to this. I was afraid that I would run into a lot of trouble with what we were initially wanting to do. Would it be possible for us to just give away prizes and ask for a membership fee? That would open up the opportunity to make money of advertisement and the membership fee would help us with start up money and not taking a huge loss financially off the bat.

 

[quincy]

Thank you to all that replied to this. I was afraid that I would run into a lot of trouble with what we were initially wanting to do. Would it be possible for us to just give away prizes and ask for a membership fee? That would open up the opportunity to make money of advertisement and the membership fee would help us with start up money and not taking a huge loss financially off the bat.

That does not eliminate for you the problems you have with trademark rights, copyrights, and privacy/publicity rights.

 

[FlyingRon]

Again, no matter WHAT you weasel call the payment, if you accept something from a customer for the promise of possibly winning something else, it is gamling (and ILLEGAL).
This is why most promotional contests allow entry with "no purchase required."

Now if you wanted to form your league without an entry fee and make your money selling advertisements (where the payment for the advertisements isn't keyed into the possibility of winning a prize) that would not be gamling.

 

[quincy]

Again, no matter WHAT you weasel call the payment, if you accept something from a customer for the promise of possibly winning something else, it is gamling (and ILLEGAL).
This is why most promotional contests allow entry with "no purchase required."

Now if you wanted to form your league without an entry fee and make your money selling advertisements (where the payment for the advertisements isn't keyed into the possibility of winning a prize) that would not be gamling.

FlyingRon, although I agree that your post is good enough to post twice , over an hour between the postings is interesting.

Are you experiencing glitches with this site? I have been fighting the "edit post" feature since yesterday (although all seems okay right now).

 

[FlyingRon]

FlyingRon, although I agree that your post is good enough to post twice , over an hour between the postings is interesting.

Are you experiencing glitches with this site? I have been fighting the "edit post" feature since yesterday (although all seems okay right now).

No, I think what happened is that I posted and then hit the back button and then went on and did something else for a while (despite appearanes FA postings is not my primary job). I hit POST again most likely.