Foundational Legal Questions About Online Real Money Gaming
by: Brian C. Schaller and Max Landaw
As interest in online real money gaming (RMG) continues to grow in the U.S. and globally, many businesses—tech companies, marketers, payment processors, platforms, and others are asking the same foundational questions. Whether you're considering entering the space or just want to understand your legal exposure, here are the key issues to consider:
1. What is real money gaming, and how is it defined under the law?
Real money gaming generally refers to online games where players wager actual money (or something of value-also known as “consideration”) in exchange for the chance to win prizes, money, or other benefits. Specific legal definitions vary by state and jurisdiction. The definition often hinges on whether the game involves chance, skill, or a combination of both. Real money gaming is not synonymous with gambling, because there are types of online real money gaming (such as skill gaming) that are not considered gambling. Rather, gambling is a subcategory of real money gaming. That is why we typically do not use the more specific term “online real money gambling.”
2. Is “real money gaming” referred to by other terms in the industry?
Yes, alternatives include:
iGaming
Online Gambling
Interactive Gaming
Regulated Online Wagering
Some specific subcategories are:
Online Sports Betting, Online Betting, Online Wagering, Interactive Event Wagering
Advanced Deposit Wagering
Online Cash Games
Daily Fantasy Sports, DFS
Esports
Social Casinos
Sweeps Casinos
The terminology often reflects regional preferences or regulatory categories.
3. Does operating in this space require a license or other form of authorization?
In most states, yes, for some types of gaming. Licensing in the U.S. is at the state level, and the requirements depend on the type of game and where users are located. Even entities that are not directly operating games such as platforms, vendors, or affiliates may be subject to registration, licensing, or other requirements.
4. What steps should I take to reduce legal and regulatory risk?
Start with a comprehensive risk assessment: understand the jurisdictions you’ll touch, how your game is classified (gambling, fantasy sports, game of skill (competition), sweepstakes, sweeps casino, sports betting, bingo, raffle, etc.), and which laws apply. A sound compliance program typically includes licensing review, Anti-Money Laundering (AML) and Know Your Customer (KYC) safeguards, user eligibility controls, and privacy protections.
5. What are some risk areas in online real money gaming?
Some of the scrutinized areas include:
Operating without a license.
Accepting players from restricted jurisdictions.
Misclassification of game types (e.g., marketing a gambling product as a contest).
Relying on a novel (untested) legal theory for the legality of a game.
Advertising and affiliate partnerships.
Inadequate Anti-Money Laundering (AML) and Know Your Customer (KYC) controls.
Each of these can trigger regulatory action or even criminal exposure.
6. What types of real money gaming models exist online today?
Common types include the following:
Sports betting
Daily fantasy sports, including Pick ‘em.
Skill-based games with entry fees for example:
Chess
Rummy (real‑money rummy)
Trivia & quiz contests
Puzzle & word‑challenge games (e.g. crosswords, Wordle‑style)
Arcade/puzzle reflex games (e.g. match‑3, bubble shooters)
Fantasy sports (daily/seasonal)
Mobile casual skill games (tournaments across multiple titles)
Casino games, including
slots
table games
Blackjack
Roulette
Baccarat
Craps
Video Poker
Sic Bo
Poker (including variants like Texas Hold’em, Three‑Card Poker, Caribbean Stud, Pai Gow Poker) though note that some jurisdictions treat peer to peer (P2P) versions of poker different from table game versions of poker where the user plays against the house
Promotional games (e.g. sweepstakes and contests)
Social casinos
Each model may be regulated differently depending on how chance, skill, and consideration factor into the structure.
7. What does due diligence look like in the online real money gaming space?
Due diligence typically involves verifying licensing status, reviewing ownership and control structures, assessing financial and operational integrity, and conducting background checks. It’s essential for operators, vendors, and investors alike. For a more detailed breakdown, see our article: Doing Business With A Gaming Operator? There Is Plenty To Know.
8. What are the potential consequences of non-compliance with gaming laws?
Penalties can include regulatory enforcement, fines, criminal liability, civil litigation, reputational harm, and denial of future licensing. In some cases, “aiding and abetting” or “facilitating” unlicensed gambling can expose third parties to enforcement, even if they’re not operating the game.
9. I’m not a gaming operator—why could my business still be at risk?
Vendors, payment processors, ad platforms, and even influencers may be considered third-party facilitators, vendors, or marketing affiliates under state or federal law. Aiding and abetting statutes are sometimes broad, and regulators may pursue those who knowingly assist or promote illegal gaming activity.
10. What should be considered when setting up a compliant program?
A strong compliance program includes:
Jurisdictional mapping
Obtaining licensure and/or registering
Geolocation and age-verification tools
Player onboarding policies (e.g., KYC and AML)
Website/App Terms of Use
Game Rules
Responsible gaming measures
Obtaining a legal opinion letter
Vendor and Platform Contracting
Player and Consumer Privacy
Data Security and Incident Response Planning
Advertising and Marketing Compliance
State Reporting, Testing, and Audit Requirements
Tailoring these elements to the regulatory landscape is key.
11. How do legal frameworks distinguish between different types of gaming?
Games are often classified as:
Chance-based: Subject to full gambling regulation
Skill-based: May be exempt or lightly regulated
Promotional/sweepstakes: Typically regulated under separate consumer and marketing laws
Understanding how your offering is classified is essential to determining what legal obligations apply.
12. What are geolocation, geoblocking, and geotargeting—and how are they used in gaming compliance?
Geolocation, geoblocking, and geotargeting are technical tools used to determine and control where a user can access or interact with an online platform. In the RMG context, these tools play a central role in meeting state-specific regulatory requirements to ensure that users are actually located in the state(s) where the game is offered.
Geolocation refers to the process of determining a user’s physical location, typically using IP address, GPS, Wi-Fi triangulation, or other location data. This information is critical for verifying whether a user is located in a jurisdiction where a specific game or service is legal.
Geoblocking is the practice of restricting access to a website, platform, or specific game based on the user’s location. For example, if a user tries to access a game while located in a state where that game is not licensed or permitted, the platform must prevent access.
Geotargeting is the flip side: it allows platforms to show users content, promotions, or advertising based on their location. In RMG, this may include state-specific offers, landing pages, or compliance disclosures that vary depending on where the user is accessing the site.
These technologies are typically deployed at multiple points in the user journey, including:
During account registration, to prevent unauthorized users from signing up;
At the time of gameplay, to ensure active play only occurs in approved jurisdictions;
When displaying marketing or promotional content, especially in connection with affiliate or performance-based advertising programs.
Because gaming laws vary dramatically from state to state in the U.S., regulators—and often platform partners—require that operators implement robust geolocation and geoblocking solutions. Many licensing jurisdictions also mandate the use of certified, third-party geolocation providers or audits to ensure accuracy and prevent circumvention.
Failure to implement effective geolocation controls can result in regulatory penalties, loss of license, and contractual breaches with vendors or partners.
13. What is age gating, and why does it matter for real money gaming platforms?
Age gating, also known as age verification, age screening, or age restrictions, refers to the process of confirming that users are old enough to access and play real money games. The required minimum age can vary depending on the jurisdiction and the type of game, but it is often set at 18 or 21.
Age gating is sometimes required by statute/rules/regulations, or are part of a general effort to promote responsible play. Common approaches include asking users to declare their age during account creation, using third-party identity verification services, or requiring government-issued ID. The methods used can differ depending on the risk profile, legal requirements and operational footprint. While the specifics vary, taking steps to prevent underage access is generally viewed as a key aspect of maintaining credibility and operating responsibly in the real money gaming space.
Need guidance navigating the legal landscape of real money gaming?
The issues above only scratch the surface. If you're exploring opportunities—or risks—in this space, our team can help you assess the regulatory landscape and structure your approach with compliance in mind.
Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.