Succeeding in Your Business by Cliff Ennico

"Some friends and I are setting up a website where people will be able to play a certain type of board game online.

"We plan to sponsor tournaments on this website, and are encouraging players to place bets on individual games, players and tournaments using a virtual currency that will have no value in the real world. People can use this virtual currency to pay for their subscriptions to the website, and eventually we will have an online 'store' where people can use their virtual currency to buy goods in the real world as well as virtual goods on the website.

"Our attorney has told us he's a little concerned that what we are doing may be viewed as 'Internet gambling,' which apparently is illegal. We did some online research and it seems that the prohibition on Internet gambling applies only to 'games of chance' — like roulette or dice games — and not 'games of skill' like the board game we are bringing online.

"How concerned should we be about this, and how should we set up our website so it's clear that no 'real' gambling is going on there?"

First of all, make sure you have the legal right to bring this board game online. If we're talking about chess or checkers, you're probably okay. If the game is trademarked or copyrighted, however — think Monopoly or Risk — you will need permission from the board game's owners to do anything with their game online.

In the United States, the federal Unlawful Internet Gambling Enforcement Act of 2006 prohibits businesses from "knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law." Many states in the United States have similar laws restricting online gambling activities.

Generally, laws prohibiting Internet gambling make a marked distinction between "games of chance" and "games of skill". While online betting on "games of chance" are generally prohibited, betting on "games of skill" is often permitted. Neither the 2006 Act nor any U.S. gaming law has defined these terms clearly, and there is currently much confusion about whether particular games — such as baseball, poker or chess — are considered "games of skill" or "games of chance" under these laws.

The 2006 Act defines a bet or wager to include risking something of value on the outcome of a contest, sports event, "or a game subject to chance." The "game subject to chance" restriction is designed to include Internet poker and other card games.

The 2006 Act then confuses the issue of skill by stating that betting includes purchasing an opportunity to win a lottery, which must be predominantly subject to chance. The 2006 Act expressly prohibits lotteries based on sports events.

Recent court cases interpreting the 2006 Act have focused on so-called fantasy baseball websites, which allow users to wager thousands of dollars on the performance of professional athletes. While the 2006 Act specifically exempted these websites, because the winners were not determined by the outcome of a single game or the performance of a single player, there is growing concern that daily fantasy games have a fundamentally different relationship to chance than season-long fantasy games. On a given day an injury, a hailstorm or a ball bouncing strangely could affect a result, making daily fantasy games seem very similar to placing a bet with a bookmaker.

As for a board game, who knows?

You should check with a lawyer familiar with gambling law to find out if there are any specific cases dealing with your board game. If there aren't (and there probably aren't), you should ask the attorney to draft a short disclaimer and post it both on your website's home page and in your Terms and Conditions of Service or user's agreement.

Here's what the disclaimer should say:

—That U.S. laws prohibiting Internet gambling do not provide clear guidance as to what is a "game of chance" versus a "game of skill"

—That you believe your board game is a "game of skill," and your reasons for believing so

—That if at any time you are advised by legal counsel, or by a government agency, that any activity conducted on your website violates federal or state law, you will cease that activity immediately and refund the players' virtual currency wagered on a game or tournament

—A statement in bold-faced type prohibiting cash wagering on the website (for example, in a "chat room"), punishable by a one-year banishment from the site; and

—A statement that online betting, even using virtual currency, may be prohibited by the laws of countries other than the United States.

It's not a perfect solution, but it may be the best you can do until Congress or the courts clarify the scope of the 2006 Act and what it was intended to prohibit.

Cliff Ennico (crennico@gmail.com) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.

COPYRIGHT 2013 CLIFFORD R. ENNICO.

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