Legal online 'Gambling' in the U.S.

An interesting article was published on yesterday about how one man and his company had managed to create and put into practice a business model that in essence allows U.S. gamers to gamble yet not contravene any of the nation’s laws, especially UIGEA that has rocked the online gambling industry since its introduction in 2006.

As quoted in the article, attorney Chuck Humphrey (author of says that the three main elements that have to co-exist and thus break most gambling laws are “prize, chance and consideration”. Quite cleverly, founded by Victor Palmer from Texas, has managed to avoid using one of these elements making his business entirely legal.

How this online ‘gambling’ website works uses quite a simple model: Let people gamble for ‘play money’ and let them place any bet they like. If they win then they’re allowed to keep the winnings but if they lose, give them more money to keep on trying to win! Because players aren’t playing with their own money, this aforementioned ‘consideration’ factor is avoided.

Obviously there is a lot more to the system and there are stipulations (such as withdrawals are only able after $20.00 is made, when you are only given $0.10 at the start) but considering a gamer can never lose their money it begs the question, how does the company make any profit? - Simply by making members challenge other members for ‘community-pots’ limits the numbers of payouts. However advertisers hungry for exposure also provide a great deal of revenue for Palmer and CentSports, especially when you consider Palmer’s original monthly lease on the hosting server was just $5.00!

This model is certainly going to cause a few raised-eyebrows and many more people theorising the possibility of other ventures and expansion. Regardless of some members of CentSports not feeling the customer-care satisfaction they deserve (see its forum), this could possibly be a lucrative opportunity…until the Feds change the law again.

Editor, - 2008-06-13 12:03:11

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