Launching a gambling, sweepstakes, or skill gaming website requires more than just a strong business model. To gain approval from payment processors, banks, app marketplaces, and ad platforms, operators must present a credible legal opinion from an experienced gaming attorney.

Online Gaming Legal Opinions – What They Cover

A reasoned legal opinion evaluates every aspect of your operation, including:

• Business model review: Ensures games are structured within lawful boundaries.
• Geo-blocking requirements: Identifies and restricts access from prohibited states.
• Compliance documents: Drafting of Terms of Service, Privacy Policy, KYC procedures, and official game rules.
• Regulatory analysis: Applies current statutes, regulations, and case law to support conclusions.

Why Legal Opinions Matter

Third-party compliance departments demand assurance that your gaming platform has undergone thorough legal evaluation. A favorable legal opinion from a nationally recognized online gambling attorney provides that assurance, making it easier to secure approvals and reduce business risk.

About Walters Law Group

For over 30 years, Lawrence G. Walters has represented clients in the gambling, sweepstakes, and skill gaming industries. Recognitions include:

• “AV” Preeminent rating by Lawyers.com
• 10.0 “Superb” by AVVO.com
• Named a SuperLawyer (top 5% of attorneys) since 2020
• Founding member of the International Masters of Gaming Law
• Recipient of “Online Gaming Lawyer of the Year” awards from Corporate INTL and Global Law Experts

Our practice serves both publicly listed companies and startups, ensuring legal compliance at every stage of development.

Request a Legal Opinion

If your business requires a legal opinion for gambling, sweepstakes, or skill gaming compliance, Walters Law Group can help. We deliver the expertise and credibility that regulators, payment processors, and mobile app marketplaces demand.

Contact Walters Law Group today to discuss your needs and move forward with confidence.

FAQs About Online Gaming Legal Opinions

1. Introduction

The author has represented adult website operators since the inception of the industry and has defended numerous obscenity prosecutions against adult website content. Below are some of the legal and constitutional topics facing the adult website operator. This guide is by no means intended as an exhaustive list, but covers the most common legal issues encountered by adult webmasters. Adult entertainment is a “highly regulated industry” in the United States. That means the government can get away with imposing a wide variety of laws and regulations relating to the operation of adult websites, which differ from other “mainstream” goods or services. The adult website operator should become an expert on legal compliance issues governing the production, distribution, and promotion of erotic content.

2. Basic Concepts

Adult websites include things like “pay sites”, which require money from the user to access adult content; “free sites” (such as TGP, MGP, tube sites or affiliate sites) which provide free access to adult content, usually for promotional purposes; “live webcam sites” which allow users to interact with performers using webcam and chat technology, “clip sale sites” which allow content producers to upload and sell their own video clips, and “adult dating sites” which connect individuals interested in erotic social interaction. Publishing adult content is protected by the First Amendment to the U.S. Constitution, under well-settled legal precedent. The creation of adult content has been recognized as legal (and not a violation of prostitution laws) in a couple states, but the issue has not been addressed in most parts of the country. Obscenity and child pornography are illegal, and involvement with these categories of material can result in serious criminal prosecution. Obscenity laws are rarely used these days, but remain on the books as a potential tool for prosecution of adult website operators. Child pornography and human trafficking laws impose significant age verification obligations on a website operator involved with the creation, publication, or advertising of sexually-explicit content.

3. Age Verification, Model Releases, and Records Keeping Obligations

Adult webmasters must take steps to ensure that performers and website users are over the age of 18 in the U.S. Federal law imposes numerous records keeping obligations. Title 18 U.S.C. s. 2257 (and associated federal regulations) require that performers in sexually explicit media provide government-issued ID’s, and that all producers (including secondary producers such as webmasters) maintain records associated with the performer. We recommend that our clients use our firm’s mobile app; Quick2257, to compile mandatory performer age records. Model releases must be obtained and kept separately from the Section 2257 age records. These releases should be drafted by an experienced adult website lawyer, and cover issues such as right of publicity, invasion of privacy, STD’s, sexual harassment, condom usage, and character/persona rights. The publication of sexually explicit media on a website generally requires a Section 2257 disclosure statement, which identifies the location of the mandatory records. Some user-generated content or profiles are exempt from these obligations. For example, tube sites and adult dating sites can position themselves to take advantage of Section 2257 exemptions, if operated properly.

4. Intellectual Property Issues

A variety of intellectual property issues face adult website operators including trademark, copyright, and DMCA safe harbor. The adult website industry has also been targeted by numerous ‘patent trolls’ based on certain technology utilized to display the erotic media. Website operators must become familiar with the copyright registration process when producing adult imagery. Trademark concerns should be evaluated before selecting a brand name or website domain. If eligible, a trademark registration should be submitted to the U.S. Patent and Trademark Office, to protect the site’s brand name. Infringement and piracy is rampant on the internet, particularly in the adult industry. Adult website operators typically develop an intellectual property rights enforcement strategy which includes policing for infringement, transmission of cease and desist letters, DMCA takedown notices, UDRP domain name arbitrations, and litigation when necessary. Those online service providers who permit uploading of content by independent third party users must familiarize themselves with the Digital Millennium Copyright Act (“DMCA”), which provides ‘safe harbor’ from copyright infringement claims. However, the DMCA imposes stringent requirements in order to assert safe harbor status. The website operator must: 1) designate an agent for receipt of infringement notices by filing a notice with the Copyright Office; 2) Post a legally-compliant Notice & Takedown Policy, describing how to submit a DMCA notice or counter-notification; 3) fairly implement a repeat copyright infringer policy; and 4) notify its subscribers of the Repeat Infringer Policy. Intellectual property is any adult website’s most valuable asset. IP rights should be identified, registered, and enforced. We encourage copyright holders to use our mobile app; QuickDMCA to efficiently transmit DMCA takedown notices to websites facilitating the infringement of their content.

5. Obscenity, Prostitution, Indecency, and Underage Materials

This section will evaluate core content-related concerns with the production and distribution of sexually-explicit material. Pornography is legal, and constitutionally protected under the First Amendment. Obscenity is illegal, and can result in serious criminal penalties. The difference between the two is governed by the Miller Test, which focuses on whether the content is patently offensive, appeals to the prurient interest in sex, and whether it lacks serious literary, artistic, scientific, or political value. Even cartoons or pure text can be deemed obscene, under current case law. Adult website operators must be intimately familiar with the Miller Test, and avoid publication of obscene materials. The production of erotic material is also likely protected by the First Amendment, although only 2 states have court rulings which affirm the legality of adult content production; California and New Hampshire. In other states, the potential applicability of prostitution laws to the act of paying adults to engage in sexual activity is unsettled. Indecent materials are legal for adults to view and publish, but can be illegal if made available to children. Online age verification is a difficult issue, since existing technology limits the ability of a website operator to identify the age of the individual behind the computer keyboard or smart phone. However, advances in technology and database information has allowed for more effective online age verification options. We permit our clients to use the patented birthdateverifier.com device for online age verification. Other solutions exist, but none are foolproof. Bio-metrics (such as fingerprints or facial recognition) will eventually make it easier to identify the age of website users. A more serious issue arises with the age of persons depicted in sexually explicit material. Child pornography and exploitation offenses are some of the most serious crimes in the nation, at both the state and federal levels. Adult website operators must make every effort to ensure that underage materials are not published on their sites. Apparent underage material posted to a website by third parties must be reported by the website operator to the CyberTip Hotline, operated by NCMEC, pursuant to 18 U.S.C. s. 2258A. Even if all performers are over 18, webmasters should never promote their content as including any child pornography, ‘lolita’ or ‘underage’ material. Federal ‘pandering’ laws have been used to prosecute online advertisers who promote erotic material as depicting underage individuals even if all models are over 18. However, erotic content which involves performers who happen to look young, but are over 18, is not illegal. Attempts to make such ‘virtual’ child pornography illegal have been rejected by the U.S. Supreme Court, as a violation of the First Amendment.

6. Website Contracts, Policies, Terms, and Conditions

The operation of an adult website will require the careful drafting of numerous online agreements, contracts, policies, terms and conditions. The following is a partial list of the agreements typically associated with adult website operation: 1) User Terms & Conditions; 2) Advertiser Agreement; 3) Privacy Policy; 4) Affiliate Agreement; 5) Section 2257 Disclosure Statement; 6) Anti-Spam Policy; 7) Human Trafficking / Abuse Policy; 8) DMCA Notice & Takedown Policy; 9) Repeat Infringer Policy; 10) Model Agreement; 11) Website Development Agreement; 12) Copyright/Trademark Assignments; 13) Photographer (Work for Hire) Agreement; 14) Subpoena Compliance Policy; and, 15) Section 2257 Data Acquisition Form. Each of these documents is intended to address a unique set of legal concerns. Correct implementation and utilization of these important agreements and policies is essential to mitigate legal risks.

7. Promotion & Marketing

The Federal Trade Commission regulates adult website operations in the U.S. The FTC has used its authority to enforce consumer protections laws even against website operators located in other countries – often with the assistance of foreign consumer protection agencies. Any promotional device that may be considered ‘unfair’ or ‘deceptive’ can result in an FTC investigation, and the imposition of significant fines, penalties, and disgorgement of profit. Use of ‘free’ promotions to generate interest in online goods or services is a risky endeavor, and should only be undertaken in consultation with experienced advertising lawyers. The FTC, and related state agencies, have pursued adult website operators for all manner of allegedly deceptive activity involving spamming, insufficient legal disclosures, and deceptive advertising. In the often-competitive world of adult entertainment marketing, all promotional campaigns should be rigorously evaluated for compliance with state and federal advertising regulations.

8. FOSTA/SESTA

In April, 2018, President Trump signed a law entitled FOSTA/SESTA. The bill was initially drafted to combat human trafficking through websites, however its scope broadened significantly before the law passed. FOSTA made some radical changes to the functioning of the internet. First, it created a new crime of “promoting or facilitating” prostitution using an interactive computer service. Second, it removed the legal immunity from liability that online platform operators previously enjoyed, in connection with acts of prostitution or human trafficking. Finally, it lowed the standard for proving sex trafficking crimes against website operators. The combined effect of these changes was widespread censorship of sexually-oriented speech from the internet. Since online platform operators are no longer immune from claims relating to prostitution, many have chosen to avoid all risk by prohibiting all discussion or expression relating to sex. It can be difficult for an online platform operator to know whether user content in some way promotes or facilitates prostitution, so many have taken a conservative approach to legal compliance. Adult website operators must learn about FOSTA/SESTA in order to properly evaluate the new legal risks created by this legislation.

9. Conclusions & Recommendations

Adult website operation can be profitable, but comes with inherent legal risks due to the controversial nature of the content. The adult entertainment industry is a highly regulated field, and requires careful attention to legal detail. An experienced attorney, familiar with the First Amendment, Adult Entertainment and Internet Law will be an essential part of the team. Operational risks can be substantially reduced by addressing relevant legal issues prior to launch.

Additional legal information about adult website operation can be found here:

Shooting the Messenger, Stanford Law and Policy Journal
http://www.sin20.com/audio/by/title/01_06_09_-_larry_walters_-_the_new_doj_2257_revisions_you
https://www.firstamendment.com/site-articles/dmca-agent/
https://www.firstamendment.com/articles/SexLiesChildren.pdf;
https://www.firstamendment.com/site-articles/tube-sites/
https://www.firstamendment.com/site-articles/website-review/
https://www.firstamendment.com/site-articles/free-sites/
https://www.firstamendment.com/site-articles/copyright-enforcement/

In late June, the Supreme Court agreed to hear New Jersey’s appeal in the state’s longrunning effort to offer legalized sports gambling. The Supreme Court is expected to hear oral arguments in the case in late 2017 or early in 2018. If New Jersey ends up winning the decision, sports betting could open at state racetracks and casinos by June 2018. With all of the recent developments and momentum related to the legalization of sports betting, when the rare occasion of all four major professional sports league Commissioners being in the same room occurred in mid-July, 2017, gambling was a hot topic of discussion.

Roger Goodell (NFL), Adam Silver (NBA), Rob Manfred (MLB), and Gary Bettman (NHL) gathered for a panel titled “GameChangers: Creating the Future of Sports” at the Paley Center for Media in New York City. While none of them were acting as Commissioner at the time, in 1992 all of the major sports leagues supported the passage by Congress of the Professional and Amateur Sports Protection Act, or PASPA, which generally prohibits states from authorizing sports betting except for Delaware, Montana, Nevada, and Oregon. Despite the fact that it is estimated that nearly $400 billion is illegally wagered on sports activities in the United States each year, the professional sports leagues have failed to move from their position against the legalization of sports gambling, until somewhat recently.

It was not surprising that Adam Silver took a progressive stance relative to sports gambling during the panel, as he has been at the forefront of the legalization of sports gambling for several years. In 2014, he authored an op-ed piece in the New York Times supporting a federal approach to the legalization of sports betting in the United States. When asked about it during the panel, Silver said “My sense is that the law will change in the next few years in the United States. It’s more a function of being realists. It’s a multi-hundred billion-dollar illegal industry in the United States. Ultimately, as the owners of the intellectual property, we’re going to embrace it.”

While Roger Goodell did not offer any comments, Rob Manfred and Gary Bettman voiced their concerns about the impact of the experience for spectators at games. Bettman said “I don’t worry about fixing games. I don’t worry about anything other than what does it do to the way young people consume sports. Secondly, what does it do to the environment in a stadium or an arena if everybody is sitting there just worrying about their bets? Does it turn us into something other than what we’ve been, more like a race track?”

It is somewhat surprising to hear these comments from Bettman, considering that the NHL is the first major sports league to put a professional team in the Las Vegas market. The Vegas Golden Knights will debut during the 2017-2018 NHL season. Additionally, if this was not simply an attempt at a PR move by Bettman and reflected his actual beliefs, it would be shocking that he would be so naive and out of touch with the actual current state of sports gambling. In-game betting, also known as “live” betting, is already taking place on a large scale, despite the fact that it is illegal. As an example, if a spectator was attending or watching a Blackhawks game in which they were trailing the Penguins 3 to 1, but believed that they could come back and win the game, a “live” bet could be placed through an illegal gambling method on the Blackhawks to come back and win the game. In-game bets are simply wagers that can be placed during the course of live game action, with the odds adjusted accordingly in real time based on the action that is taking place. It has become an extremely popular form of betting, as it keeps spectators involved and interested and also allows bettors to take action on games even if they have not placed any wagers prior to the start.

Rob Manfred was less than enthusiastic when it came to in-game betting, as he said “The growth area is on more discreet activities in the game. Is the next pitch going to be a ball or a strike? … It seems to me that there is a difference between somebody betting on whether the next pitch is going to be a ball or a strike — which is hard for anybody to affect or control — as opposed to the outcome of a game.” Adam Silver responded to his comments by stating that “Research generally shows that fans are fairly sophisticated. They can both root for their team and virtually all the action. … They want to bet throughout the game. They’re betting on quarter scores, on particular players, and free throws. It results in enormous additional engagement.”

While Roger Goodell did not comment during the forum, he previously stated the following in April 2017: “I think we still strongly oppose [among ownership] legalized sports gambling. The integrity of our game is No. 1. We will not compromise on that. …. I think we have to make sure that we continue to stay focused on making sure that everyone has full confidence that what you see on the field is not influenced by any outside factors. That’s our No. 1 concern. That goes to what I consider the integrity of the game, and we will not relent on that.”

At this point, it appears that Adam Silver and the NBA are the only league that is not taking a hypocritical stance. The NFL, for example, has dealt with integrity issues due to deflated footballs, poor officiating, and a health crisis related to player safety and concussions over the past few years, to name a few. To say that legalized sports gambling could compromise the integrity of the game seems somewhat foolish. Whether sports gambling is illegal or legal will likely have little impact on any potential integrity issues. Sports gambling is already running rampant throughout the country. Saying that the legalization of sports gambling could impact the integrity of a sport is the equivalent of saying that legalizing marijuana could lead to a drug epidemic. Both things are already happening, so they might as well be legalized and monetized instead of billions of dollars going to illegal markets.

Sophisticated monitoring systems are in place which can analyze the various wagers being placed across several platforms, and any potential impropriety can easily be identified. For example, tennis has had some recent player integrity issues which have been identified through this monitoring technology. Unlike low end tennis players that are scraping by monetarily, even the least valuable player on a professional sports roster is doing well enough these days that game fixing should not be an issue. The days of the Black Sox Scandal where players were barely getting paid are now long gone with the enormous salaries that professional athletes are currently making.

Despite the fact that they have been more open to dialogue concerning the legalization of sports betting in recent years, and particularly the NBA, all four professional sports leagues sued to stop New Jersey from legalizing sports gambling. In addition to the professional sports leagues, the National Collegiate Athletic Association (NCAA) is adamantly opposed to any form of legalized sports gambling. While the professional sports leagues and their respective Commissioners might not be ready, the legalization of sports gambling is inevitable. Arizona, Louisiana, Mississippi, West Virginia, and Wisconsin have all joined New Jersey’s effort in asking for the case to be heard by the Supreme Court. Whether through judicial or legislative action, the mainstream acceptance of sports gambling suggests that a path for legalized sports betting could be coming soon.

Walters Law Group, represents clients involved in all facets of the gaming and sports industries. Nothing in the foregoing article is intended as legal advice. Neil Braslow, Esq. can be reached via email: neil[at]firstamendment.com, or toll free: 800.530.8137.