Q: I am looking to take money from outside investors and bet on sports based on an algorithm I created. Is it legal in PA?
There is a law in Nevada that allows this type of business model, however I am located in PA and was wondering if there was a way to make this work from here. I would receive money from investors, and place bets strictly off of my algorithm with no input whatsoever from the investors. I would charge a 2% maintenance fee and a 20% performance fee similar to most hedge fund structures. Is there any way it is possible to set up a business like this in PA?
A: You need to contact a business attorney as you will need paperwork to cover you in regard to claims from the investors. Anyone can give anyone else money to gamble with--that's not a violation. However you need to have disclaimers and it's not something you'd want to do off the internet.
There are also federal gaming statutes that are implicated, so you really need to get with an attorney to set things up properly.
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