I’m concerned right now around compliance and liability, and how that affects me personally. I also want to balance reducing risk with being able to move quickly — I’m pre-launch and don’t want to spend time or money unnecessarily.
Here’s the gist - I want to launch Megapot (docs here), I want to do so doxxed while living in California.
My concerns are with these risks:
- Compliance - To my knowledge, this isn’t legal in the US. Even “skilled games”, like poker or sports betting, is highly regulated. Currently, US users are blocked via IP address but you can get past this by VPN.
- Liability - If the smart contract or website is hacked and funds are lost, I don’t want to be personally liable. Currently, to make a ticket purchase you need to check a box acknowledging risks.
Thus, I’m currently leaning towards option #2:
- Incorporating offshore with a gaming license - Reduces compliance and liability risks, but requirements are a non-starter for crypto. I could get a license from Curacao, which I see many gaming websites using, but requirements to get a license is tough. Then, maintaining it requires complying with KYC, which no crypto app does. Both are enough reason to be a non-starter. Lawyers seem to recommend this, but their goal of minimizing all risk absolutely doesn’t balance execution speed.
- Incorporating in general - Reduces liability risk. Do it with Stripe Atlas. A standard Delaware LLC doesn’t solve compliance, but perhaps can cross that bridge if there’s ever any traction? If this is found to be non-compliant, I hope that I’ll just be asked to take it down and pay a fine, but no further action?
- Don’t incorporate - No compliance or liability. This seems risky. Though, there are many bigger apps out that are non-compliant and users are acknowledging risks already, so risk is low?
Curious to hear if I’m evaluating the risks and options correctly. Is there something I’m missing? How would you approach this pre-launch?
Separately, “skill-based” gambling games have launched and gotten traction on Farcaster, like Perl (bet on # of likes), Bracket.game (bet on NCAA basketball), or Drakula.app (buy “shares” of creators). None of these seem to have a gaming license, block access for residents of certain countries, or do KYC/AML. Do you think these skilled games have a lower personal risk for the founder than unskilled games like raffles, even though all of these are non-compliant in the USA?