Navigating the Legal Maze of Skill-Based Gaming in the United States
The skill-based gaming industry in the United States operates in a complex and fragmented legal landscape. Unlike other industries, there is no overarching federal law governing skill-based gaming. Instead, gaming operators must navigate a web of state-level regulations to determine whether their game can legally operate in the U.S. market.
For gaming operators looking to launch a new game or bring an existing game from overseas to the United States, understanding this legal framework is critical. Here’s an overview of the challenges and the steps needed to ensure compliance.
The Absence of Federal Regulation
One of the first hurdles for gaming operators is the lack of a clear federal law to guide their operations. While federal law addresses certain aspects of gambling, skill-based gaming often falls outside these parameters. This leaves regulation largely to individual states, each with its own definitions and requirements.
State-by-State Legal Frameworks
Because there’s no universal standard, legal analysis for a proposed game typically involves a comprehensive 50-state survey. This review examines each state’s legal framework to determine:
What constitutes gambling versus skill-based gaming.
Which games are permissible under state laws.
Any specific restrictions or conditions for offering the game.
For gaming operators, this process often results in a legal opinion letter. This document is invaluable, as it:
Serves as proof of compliance for app platforms like the Apple App Store.
Helps secure partnerships with payment processors by confirming the game’s legality.
The Role of Legal Counsel
Given the complexity of state-level regulations, having experienced legal counsel is essential for gaming operators. Legal advisors at Jacobs Counsel provide critical support, including:
Conducting state-by-state legal analyses.
Drafting legal opinion letters to satisfy regulators, app stores, and payment processors.
Responding to inquiries or enforcement actions from state gaming regulators.
Advising on whether an existing game can be adapted for the U.S. market or whether new game concepts comply with state laws.
Without this expertise, operators risk costly delays, rejected applications, or even enforcement actions that could jeopardize their business.
Key Considerations for Gaming Operators
For those planning to launch a game in the U.S., several factors should be top of mind:
Understand State-Level Regulations: The definition of “skill-based gaming” and its legality varies significantly across states.
Secure a Legal Opinion Letter: A comprehensive legal analysis is often required by platforms and payment processors to ensure compliance.
Plan for Long-Term Compliance: Regulations are not static—ongoing legal advice is essential to stay compliant as laws evolve.
Collaborate with Payment Processors and App Stores: Legal clarity helps secure partnerships necessary for monetizing and distributing games.
Why Legal Expertise is Non-Negotiable
The U.S. gaming market presents enormous opportunities but also significant challenges. Successfully navigating the maze of regulations requires not only a deep understanding of the law but also the ability to address questions from regulators, payment processors, and app platforms.
At Jacobs Counsel, we help gaming operators bring their games to the U.S. market while ensuring compliance with state-specific laws. Whether you’re launching a new game or adapting an existing one, we provide the legal expertise you need to succeed. Contact us today to learn how we can support your entry into the dynamic world of skill-based gaming.