My journey through tournament legality.

[metalmonstar]

Every so often a new member comes here and ask the question of whether or not tournaments are legal or not. Almost always people come in and state that tournaments are a contest of skill which is not considered gambling. My hopes is to clear things up once and for all.

So here is how everything begins. Back in December I was planning a tournament with this venue. There was some concern that our proposal would be rejected due to the idea that what we were doing could be considered gambling. Of course we replied what we had heard from many a gaming site. The venue did not fully agree but allowed us to run the event anyway with some minor restrictions. We were to hand out money off their property, we were to give vouchers until we were off property, we were to call the fees admission and entertainment fee, and no one was to know of these policies and procedures.

It seemed fair enough to us. They wanted to cover their a** and had no concern for what happened to us. We went a long with it because we were short on time.

Then began the advertisement phase. We were not allowed to mention the cash payout in our flyers. Also several places we talked to stated that what we were doing was lillegal, particularly gamestop. This brings us to our first question.

How can gamestop claim what we are doing is illegal when they run tournaments as well?

Well my partner became quite paranoid because he heard about a lady getting fined for playing bingo. He didn't want to go to jail or get fined. Well we messed up on some of the conditions that the venue had asked us to keep. As you can imagine my partner pretty much lost it. So we haven't really done any tournament since then.

tl:dr We held a tournament and got told it was illegal from gamestop employees.

Well the first part is just a little background, so if you skipped it you didn't miss much.

Now here we are today actually looking into tournament legality. We went to a lawyer who is a friend of mine. However he deals with business and such not gambling. When I told him the procedue, he stated that it was a contest of skill and seemed to be ok. He didn't want us to get in trouble because of what he thought, so he gave me the number to a friend of his who does work in gambling sector. We have an appointment for the 15th.

Well I didn't want to just sit around until the 15th, so today my partner and I went to the gaming commission to talk to them. Gaming commission from what we understood regulates all gambling activities. When we talked to them they mentioned some "Amusement fees" that one would have to pay. They also stated that if we did a prize pot then it would fall under gambling in which we would get in trouble for. If there was no money exchange then it seemed alright to them. They also seemed to believe that if we took money as payment we could do that as well, provided we have an amusement licensce.

We were then finally informed that the gaming comission doesn't handle this type of thing. They only handle slots, tip jars, bingo, and such. Game consoles not included. They told us that we should ask the venue that we are trying to hold things at.

So really it seems like we are back at square one.

Question 2: The gaming commission stated that the amusement fee is 100 dollars a year per device. How would this even work when you don't know how many wiis or such you are going to get at a tournament?

...To be continued....

tl:dr We are back at square one. Seems like it could be considered gambling but there aren't really any regulations on it.

Now let us look at some law.

http://www.gambling-law-us.com/State-Laws/Maryland/

according to wikipedia
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.

The arguement against it is that we are wagering money on an outcome. The competitve community seems to justify this by stating that we are competing in a game of skill not chance. So really we are looking at two conditions that must be satisfied. From the defintion our arguement seems to be stronger. However it would really come down to proving that the outcome isn't uncertain. I can see there being some room for subjective intereptation.

If we go on through the law, you will see no mention of video games at all. Also it states that Gaming event without personal benefit - Allowed. In which tournament organizers aren't making money.

So can anyone shed some light on this?

 

[AlphaZealot]

MLG sponsored 4 underground Smash tournaments in 2007. These tournaments had standard entry formats of pot distribution by percentage based on attendance. I would assume that if MLG could enter into legal agreement about these tournaments that it is legitimate, since they are a company afterall that is on the up-and-up tax wise in terms of reporting all financial transactions. Not only this, but they run more tournaments than anyone and I'm sure they have checked into this.

Regardless, what I've heard over the years is basically as you have said: tournaments are a test of skill. The money at the end of a tournament is a "prize" in the same way an NBA player recieves a "prize" for doing well in a season (ie performance based bonus's-make the playoffs get x money, do this get x more). In this way, you can also liken the entrance fees (which is what most tournaments call it) to the entrance fees for basketball games and the like. While the process is much more linear in the Smash community (entrance fee > TO collects, subtracts possible charges > players receive winnings), it is basically the same in any professional sport (entrance fee > owners collect > owners distribute to players).

Also, regarding randomness/test of skill: sudden bursts in wind speed =/= making the entire game of football random, just as some of the elements in Smash that are "chance" related =/= the whole game being random. Also also, the unpredictability of results (ie really good player vs really good player, who will win?) does not make the game random, since you aren't BETTING on the outcome, you are in control of it.

 

[Emperor Time]

This cleared up a lot of the misconceptions I had about tournament play....

 

[metalmonstar]

Well we finally talked to the lawyer today. It turns out that legally he sees no problems with tournaments. However there are some licensing and business issues that one would have to go through if the tournament was not kept on the low.

Much like what we have been stating this whole time tournaments are a test of skill. As long as the rules are well written and clear then there should be no issue. So MD players you have nothing to worry about when you run a tournament...well legally that is.

He did suggest that TO's try not to hold tournaments at their house. This is because of liability issues. If someone gets hurt they can legally press charges against the organizer. That was my understanding at least. I don't believe any of us have full coverage umbrella Insurance to cover should something go wrong. Which is why he suggest running them at venues in which you could be placed under their insurance plan. He also suggest that we have people sign up for the event, a sort of liability form. Stating that they have read and understand the rules, and that the TO is not responsible for lost possessions, injuries, etc.

For the most part a tournament under 50 people should have no problems with licensing. However any more than that and the TO is advised to be more formal in their approach. Business and Entertainment licenses will be needed.

Putting it shortly. Tournaments are legal in the state of Maryland. Small tournaments have nothing to worry about. Big tournaments should take some time to look into licensing.

 

[AlphaZealot]

I'm book marking this page for future reference.

Good stuff Metalmonstar.

 

[tsilver33]

This has helped me out immensely. Great read, very interesting. Hope to see more interesting topics like this in the future.