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Sports Betting Question

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bluebarracudas

Junior Member
What is the name of your state (only U.S. law)? Indiana

I have the opportunity to participate in a sports betting venture where I run what is called a node and process the results of sporting events and then execute contracts between two betting individuals. The premise is that the two individuals will enter into a contract on the blockchain and that I(the computer) will determine the victor of the bet as well as capture a small commission for doing so.

Part b of this is where a player can bet against the house. Like the first example, my only role is to process the result and collect a commission.

I am not the house, and none of my money is used by the house. The way I see it, I am introducing person A to person B and collecting some amount of money for doing so.

As a "mediator" of sorts between bettors, is any of this considered illegal by U.S. law? I was somewhat vague with my description of what the business model is, so let me know if you need a more detailed description.
 


quincy

Senior Member
What is the name of your state (only U.S. law)? Indiana

I have the opportunity to participate in a sports betting venture where I run what is called a node and process the results of sporting events and then execute contracts between two betting individuals. The premise is that the two individuals will enter into a contract on the blockchain and that I(the computer) will determine the victor of the bet as well as capture a small commission for doing so.

Part b of this is where a player can bet against the house. Like the first example, my only role is to process the result and collect a commission.

I am not the house, and none of my money is used by the house. The way I see it, I am introducing person A to person B and collecting some amount of money for doing so.

As a "mediator" of sorts between bettors, is any of this considered illegal by U.S. law? I was somewhat vague with my description of what the business model is, so let me know if you need a more detailed description.
So you are a facilitator? Or are you the organizer?

Does the betting have anything to do with fantasy sports?
 
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Taxing Matters

Overtaxed Member
As a "mediator" of sorts between bettors, is any of this considered illegal by U.S. law? I was somewhat vague with my description of what the business model is, so let me know if you need a more detailed description.
Given that federal and state laws on gambling are extensive and can result in serious penalties if violated, I strongly recommend you consult an attorney who has considerable expertise in gaming law. You need to be concerned not only about federal law but also the law of each state and local government where your service would be available.
 

FlyingRon

Senior Member
My read of the statutes is that is illegal. THe act (whether between the "house" and a gambler or between two gamblers) is illegal under Indiana statutes. The Indiana statutes cover devices and mechancism to achieve gambling, even if you are not personally taking the bet. It also covers operating a physical facility under which gambling is taking place. Indiana Code makes these all Felonies.

Further, with slight exception alluded to by Quincy (fantasy sports), using eletronic means (internet, phone) to transfer gambling information interstate is against Federal law. Even places that have legitimate sports books like Nevada, have disclaimer signs all over the place warning you that this is illegal.
 

bluebarracudas

Junior Member
Thank you for such quick replies. This will be Sports betting based on not fantasy. A quick run down of how a transaction happens:

I provide lines on a website. Individuals can bet against the set line or create a line themselves. They would just need a second individual to accept that line for a set amount. I then confirm that a bet has been made. Once an event result is completed, I report the outcome and then determine who is the winner and loser. I process out the completion of the contract to tell the network who to send the winnings to.

In it's most basic form I:

provide sports lines
execute a contract between two individuals

It seems like from what has been mentioned here, it would certainly fall under the category of illegal on both a federal and state case.

WHAT IF??? If i had my computer located in a separate country that did not have these rules. Do the state and federal statutes discuss residency or physical location of the act? Purely hypothetical, but just curious. Thanks everyone!
 

FlyingRon

Senior Member
That's more or less what I figured. My analysis is still that it is illegal under Indiana and Federal laws.

If you the server overseas, you have another problem. It is illegal for any bank to process funds transfers for gambling from the US even to overseas sites. A large amount of the off-shore poker rooms collapsed under this (and also some outright corruption) a bunch of years back.
 

bluebarracudas

Junior Member
Thanks Ron. For those interested in more detail here is a link to the white paper. Cryptocurrency is beginning to take off and I'm trying to do my due diligence in researching each project. Considering its such a large industry, if executed properly then it would be a good investment. The legalities for me as an american to run what is called a "masternode" are a different matter.

I'm certainly not interested in playing games of cat and mouse with the U.S. government, but I'm curious if they could even track something like this since it would belong in the crypto network and not through centralized institutions
 
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FlyingRon

Senior Member
You misunderstand. This is not the "HOW DO I BREAK THE LAW AND GET AWAY WITH IT FORUM."

We can't explain how to break the law and what the chances you have of eluding prosecution.
 

quincy

Senior Member
Thanks Ron. For those interested in more detail here is a link to the white paper. Cryptocurrency is beginning to take off and I'm trying to do my due diligence in researching each project. Considering its such a large industry, if executed properly then it would be a good investment. The legalities for me as an american to run what is called a "masternode" are a different matter.

I'm certainly not interested in playing games of cat and mouse with the U.S. government, but I'm curious if they could even track something like this since it would belong in the crypto network and not through centralized institutions
I agree with all that FlyingRon has said.

There is growing support in this country for making gambling legal in the US, including a move to repeal the Professional and Amateur Sports Protection Act, but what you are proposing is illegal.
 

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