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Jim Reilly
Jim Reilly, Attorney
Category: Legal
Satisfied Customers: 1801
Experience:  California lawyer since 1976.
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I want to start an online website where people CAN buy fake

Resolved Question:

I want to start an online website where people CAN buy fake money to play games with, but they do not have to buy them. The reason they are getting fake money (aka bux as we call them) is to then buy things in a store. Can the items in the store be Gift Cards to amazon.com? Or is that considered against federal law? I am using poker rooms (Full Tilt Poker.com) as my citing on this, they allow you to earn points by playing for money or free (and we give each person 5k in "bux" to srart with and they can earn more for free as well) then you can use their points to buy entry into $$ tournaments AND buy things in their store which is the same thing we are doing on my site for the most part. Thanks for your help in advance I greatly appreciate it.
Submitted: 5 years ago.
Category: Legal
Expert:  Jim Reilly replied 5 years ago.
The real question here is with respect to these $$ tournaments you mention. What is the nature of these tournaments? What kind of games are being played?
Customer: replied 5 years ago.
Well the poker room that I was citing, has real $$ poker tournaments that you can buy entry into. My site will not be doing anything along those lines we will simply be selling amazon gift cards to start with, and down the road actual items.

The games I have people playing are all against a computer, they are all random based outcomes on their desicisions. Also there are non games of chance like charades and pictionary, which are the poker rooms version of playchips (non real $$). Since you do not spend the "bux" to win more, you just simply get them for playing the game.

I hope this has helped, I will be more then happy to supply you with the links to the poker site, and mine as well and anything else you would like to help me.

Thanks again.
Expert:  Jim Reilly replied 5 years ago.
There is no problem with giving gift cards to Amazon (or any other website) if the operation of your site is otherwise legal. In fact, I'm sure Amazon would appreciate the business.

The reason I asked about the nature of the games being played is that if the results are determined by chance, the games would be gambling and illegal under federal law and in most states (excepting only Nevada, and there you need a gaming license).

I'm not sure what youo mean that the results are "random based outcomes on their decisions". If this means the results are determined by chance, the operation is illegal.

Referring to the operation of the poker sites is not particularly useful because they are all operated from outside the United States and would all be illegal if operated in this country. I am very familiar with Full Tilt and most of the other poker sites (such as Bodog, Players Only VIP and Poker Stars, as well as those which no longer accept American players, such as Paradise Poker, Pacific Poker and Party Poker).

However, it might be helpful to look at your actual site if you'd like to give me a link.
Customer: replied 5 years ago.
If you don't mind checking otu the site I would greatly apprecaite it, it is still being built up, the games are all played in chat rooms on a site called www.justin.tv. My page there is www.justin.tv/whogotmylighter.

The games are games of chance for lack of a better term, they are random though in the fact that the code I have come up with is 100% random in what card, number etc gets rolled or displayed. The games themselves are free to play and noone has to buy the "bux" to play or buy anything from the store, but if they want to get more "bux" after they run out or etc, they can either play charades which is non skill, non chance or they can buy them. I have in my TOS that there is no purchase ness. because in theory there isnt.

The site I am starting is called www.Customer.com.

I look forward to hearing from you soon, since I really need this cleared up so I know what my next move is going to be. Again they do not have to buy bux to buy things in the store they choose to if they wish, their are free non chance ways.

****This was just added*******
I would like to give you another example as to what this site is like. Its like going to an arcade, and trading your $$ in for credits, tokens etc. Then you win tickets with your tokens and then you buy things with them. The only difference is here there is a game of chance, BUT its not real being gambled or spent, the bux have no real life dollar value. Just interms of my site and my store.
*************To here**********

PS. I thought Full Tilt was located here in the US, I know it used to be, sorry if my fact on that was incorrect.

Thank again for all your help and I am sorry for taking up so much of your time but I want to make sure this is done right the first time by me and my team.
Expert:  Jim Reilly replied 5 years ago.
Full Tilt is (and always has been) located on Alderney, one of the Channel Islands between Britain and the French coast of Normandy. Many of the best-known American poker players are associated with Full Tilt, which also advertises heavily in the US. Full Tilt continues to allow American players, taking the position that the Unlawful Internet Gambling Enforcement Act of 2006 does not apply because poker is a game of skill, not chance.

I will take a look at your site and come back here with a further response after I have done so.
Customer: replied 5 years ago.
I learned something new today thank you very much about Full Tilt Poker I always heard it was here in the US.

I am thinking of this as a ticket thing in a game room now though, where you dont always win a ticken when you start a game of lets say skiiball or etc.

I await your answer when you have checked out the sites I posted above, and again thank you so much for your help.

Flynn
Expert:  Jim Reilly replied 5 years ago.
There is currently no legal internet gambling site located in the United States. In theory, one could be operated out of Nevada with an appropriate gaming license. As of yet, none has been issued by the state of Nevada for internet gaming.

I did take a look at your sites. To the extent that your games are free, no problem. To the extent that the results of real money games are based on skill, not a problem. However, combining a real money buy in with results determined by chance to win prizes gives you gambling, which is not legal in New Mexico and is also a violation of federal law because it uses the internet (interstate commerce).

I got a bit of a kick out of your comment above: "The only difference is here there is a game of chance ...." precisely because that difference is the difference bewteen being legal and not being legal. Arcade games are legal, not because they use tokens, coupons or credits, but because the games are all games of skill, not chance.

In short, I don't see any way to legally operate a US-based online gaming site in which people can risk real money to win prizes of any kind, regardless of whether the competition is between and among the players or against the "house" and regardless of how the prizes are represented or awarded.
Customer: replied 5 years ago.
So there is no way I can sell the "bux" and they let them use that buy things in a store? Is that correct?

If that is correct, what If I dont sell them but give them away? If I give them away from time to time, and they play to get more of them, can I sell amazon giftcards legally? Since there is a game of chance, but they are not paying to get the bux.

Also if a site was selling "bux" and they were not offering anything in a store would that be illegal as well? I am asking this because my competiion in this market has stated that his selling of "bux" is legal because there is nothing to gain from them.
Expert:  Jim Reilly replied 5 years ago.
You can sell the bux and let people use those bux to buy things in a store; that part is okay. The problem comes if in between the purchase of the bux and their use in the store they can use them to play a game of chance which provides the opportunity to either win or lose bux.

If you give bux away and people play to win or lose them, then redeem whatever is left, no problem since there is no risk to the players. However, giving them away "from time to time", if you are selling them the rest of the time, would not cut it.

You can sell Amazon giftcards whenever you like, and you can allow the players to redeem free bux (or bux won with free bux) to obtain Amazon giftcards, since the players are not paying to get them. If you do that, however, you have to have some other way to earn income on the site (advertising, for example). That would be okay.

I'm not sure I understand your last comment. Why would anyone buy bux if there is nothing to gain from them? The fact that items are available to be purchased from a store really has no bearing on the legalities involved. It's all about how the players get the bux to spend in the store.
Customer: replied 5 years ago.
No since you have told me I can not sell them, and then allow them to use them in the store I would not do that, I am taking what you tell me very much to heart and following your word very closely on this I am going to copy and paste this to my design team if thats is ok with you so they are up to date on what we can and cannot do since they are moslty asleep at this time (they are east coast).

I dont know why anyone would buy fake money either, but its been done in the past people have bought them for poker sites on ebay and my competition has sold them in the past and he told me tonight that what he was doing is legal and what I was doing was illegal, so since I have you here, I figured I would ask.

By the way, what if they get bux as part of a package, lets say they get a membership to the site, or they get something that is not used to buy something, is there anyway I might beable to work that angle? Like a special badge to put on their profile or etc? This way they are getting something, for their real money and the fake money is just an added bonus.

I am sorry I am trying to beat the system I am sure you get this all the time, but this was the best idea i had in a while to start a business and get going with, and I just hate to see it crippled because of legalities. By the way with the upcoming laws possibly passing that would make poker depositing ok again would that change what I could and could not do? (I do not know about this very much but I had heard of it possibly passing or something long those lines.)

Thanks again for everything I wish I had a frist name to call you with, but I apprecaite all your help.

Flynn S.
Expert:  Jim Reilly replied 5 years ago.
Let me be clear ... you CAN legally sell bux and allow people to use them to buy things in your store. There is no problem with that. What you cannot do is have people participate in a game of chance in which they bet bux (either against other players or against the "house") to try to win (or risk losing) bux.

Turning real money into "fake" money does not change the legalities if, in the end, the "fake" money can be reconverted into real money. The crucial issue remains whether there is gambling taking place in between those two events. If there is, not legal. If not, legal.

I don't know how you could work out the membership angle. What would you do if someone lost all of their free bux? Would they then "renew" their membership to get more free bux? If so, you're right back where you started.

The proposed changes to the laws that repeal the restrictions of the Unlawful Internet Gambling Enforcement Act will not actually make online gambling legal in the US. They will simply once again make it possible for Americans to deposit funds into accounts on offshore gambling sites. That would not have any effect on what you are proposing, unless you move your site offshore.

Please feel free to pass this on to your team. Sorry I can't be more optimistic about this, but the botXXXXX XXXXXne is really pretty certain ... if it's gambling, it's not legal. And if results are determined by chance, it's gambling.
Customer: replied 5 years ago.
I appreciate all your help in this matter, I will not be selling the bux since 1/2 the fun and 1/2 the object of this is to get them gambling with the fake $$ so i dont lose an arm and a leg on this start up.

I apprecaite all your help in this matter and I apprecaite you lettin gme share this with my team as well.

I see your point as well on the membership thing, but could I do a package that included them? Like as an example giving them a profile badge or something special in their account that others could see?

I would ask about donations but I am sure that would be same thing as buying bux since in return for their donation I would be giving them bux thus being back to the gambling aspect again.

How is though that my comp can sell his fake $$ legally, and I can not? His doesnt end up going to a store, but his does involve the gaming like mine does games of chance, he might offer it as a package plan like get this and this and X bux for free when you buy this plan. Thats kind of why I ask about the package thing where I give them something and they get something + the free bux. I will be happy to accept your next answer and move on sir, I do apprecaite all your time and I know you must have others that needyour services.

Thanks again for your help, and I will defiently recommend you to anyone I know that may need assitance in legal matters.

Flynn S.
Expert:  Jim Reilly replied 5 years ago.
I would have to look at this other site to see what I think about it, but can say this:

He can sell fake $$ legally. But then what do people do with them? If they use them to gamble and then convert the fake $$ back to real cash, that is not legal. Once again, as I said, it's what happens in the middle that counts. It doesn't matter how the fake money is sold -- if it is used to gamble for the chance of ending up with more real money, it's not legal.
Jim Reilly, Attorney
Category: Legal
Satisfied Customers: 1801
Experience: California lawyer since 1976.
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