Laws on Cash Prizes
Community Forums/General Help/Laws on Cash Prizes
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| I have seen several games out there with tournaments that award players prizes... What is the law about awarding players paypal cash? |
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| That's something you should ask a local lawyer, but generally a contest that is mostly based on skill is safe enough legally. Contests based on luck are generally considered gambling and may be illegal or require special permits. You may also need to look at taxation requirements. |
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| I can't see how it would be any different from winning money on a TV game show, say. I don't know about other countries but here in the UK, any money you win is tax free. Gambling isn't illegal here, either. |
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| Keep in mind that there are big differences in laws between countries, so be careful on how you proceed if you hold a competition, you may need to restrict participation to people from certain countries only so you don't violate some other countries laws... (Even though you don't live there, that could turn out to be troublesome should you ever wish to travel to/through one of them) But like Bill said in his respone, this is really something you should talk to a lawyer about, it has a big potential to turn into a can of worms. |
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| For your prizes, you may want to look at using non-cash gifts or gift vouchers at popular online stores such as Amazon or Ebay. Some local laws can have restrictions where cash is awarded as a prize. Gift vouchers or downloadable goods are probably the best way to go for prizes, as you don't have to worry about paying freight fees. |
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| Awesome inputs! Thank you guys for the insights, I appreciate it. |
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