Online gambling for real money is illegal, but a loophole manipulated to great effect by a new company called Playhem makes it perfectly legal. The trick being manipulated by the New York-based start-up is that it allows its users to place wagers on themselves as they compete against each other for cash or prizes.
Playhem co-founder Ryan DeSanto says what Playhem is doing is legal, except in about a dozen states, including Arkansas, Iowa, Maryland, South Carolina, Illinois, and Vermont. In the states where it’s not legal, people can still play, sans the cash. Players purchase credits wager what they want on themselves, and then redeem what they win for cash and prizes.
While DeSanto says that users could 'technically' wager real-world cash, he said that his company removed it from the service because people liked virtual currency more. It's also a better fit with Playhem's partners, publishers and media companies, says DeSanto.
The site went live this week, after an extensive beta test that began in February. Right now players can play select console games such as Tiger Woods, FIFA, or Madden, or online PC games such as Blizzard's StarCraft. The technology is also capable of supporting big professional tournaments. To that end, it has partnered with IGN Entertainment and Caesars Entertainment to bring pro gaming leagues to Caesars casinos. Playhem will manage the qualifying rounds that will be played online. Finalists will then head to Atlantic City in October.