Not the game itself, but tournament level Smash.
I was listening to a story on NPR about the NCAA tournament and that, depending on your state, participating in office pools is technically illegal because it's gambling. That reminded me of a conversation I had a few years ago with crew mates about whether a Smash tournament is actually legal in our home state of Connecticut. CT general statutes state:

Oh yeah, my source- http://www.gambling-law-us.com/State-Laws/Connecticut/
I was listening to a story on NPR about the NCAA tournament and that, depending on your state, participating in office pools is technically illegal because it's gambling. That reminded me of a conversation I had a few years ago with crew mates about whether a Smash tournament is actually legal in our home state of Connecticut. CT general statutes state:
So gambling in CT is illegal. But is Smash gambling?Sec. 52-553. Wagering contract void.
All wagers, and all contracts and securities of which the whole or any part of the consideration is money or other valuable thing won, laid or bet, at any game, horse race, sport or pastime, and all contracts to repay any money knowingly lent at the time and place of such game, race, sport or pastime, to any person so gaming, betting or wagering, or to repay any money lent to any person who, at such time and place, so pays, bets or wagers, shall be void, provided nothing in this section shall (1) affect the validity of any negotiable instrument held by any person who acquired the same for value and in good faith without notice of illegality in the consideration, or (2) apply to the sale of a raffle ticket pursuant to section 7-172.
I guess it all hinges on whether or not the law considers the playing of a videogame to be a contest as opposed to a game of chance (which is a legitimate question for the uninitiated). This is all academic anyway, as I doubt that the state troopers are going to start raiding Smash tournaments even if it is illegal. But just think how cool it would be if we were all outlaws!(2) "Gambling " means risking any money, credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance or the operation of a gambling device, including the playing of a casino gambling game such as blackjack, poker, craps, roulette or a slot machine, but does not include: Legal contests of skill, speed, strength or endurance in which awards are made only to entrants or the owners of entries; legal business transactions which are valid under the law of contracts; activity legal under the provisions of sections 7-169 to 7-186, inclusive; any lottery or contest conducted by or under the authority of any state of the United States, Commonwealth of Puerto Rico or any possession or territory of the United States; and other acts or transactions expressly authorized by law on or after October 1, 1973;

Oh yeah, my source- http://www.gambling-law-us.com/State-Laws/Connecticut/