Q: Business model legality and company formation?

A: Based on your description of your app, it should be legal in all 50 states. I am basing this opinion on your representation that there is no reference to betting sites on the app and you only provide "odds" based on your internal analysis--you provide no gambling services. However, since I am only familiar with California, Connecticut, and New York law, I cannot offer this opinion with complete certainty. Rather, it is based on my general knowledge of the limits imposed by other states on gambling sites. My contact information is above if you want to discuss this further.

A: The business model described, which involves sharing sports betting predictions and odds without facilitating actual betting or linking to gambling sites, may not fall under the definition of gambling in many jurisdictions. However, the legality can vary significantly by state.

In California, for example, the law distinguishes between different forms of gambling and betting. The California Penal Code § 330 prohibits certain types of gambling games but does not explicitly address the sharing of betting predictions or odds without actual betting. Additionally, the California Gambling Control Act requires a state gambling license for gambling enterprises, but it is unclear if this applies to a service that only provides predictions (Lucky Chances, Inc. v. California Gambling Control Commission (2024) 106 Cal.App.5th 172).

The California Supreme Court case of In re Hubbard indicates that private betting on the outcome of future events, other than specific regulated activities like horse racing, is not comprehensively regulated by state law, suggesting that not all forms of gambling are prohibited (In re Hubbard (1964) 62 Cal.2d 119).

Federal law, such as the Unlawful Internet Gambling Enforcement Act (UIGEA), primarily targets financial transactions related to online gambling rather than the sharing of predictions.

The legality of the business model can vary significantly across states. Some states have more stringent regulations on gambling and related activities, while others may have more lenient or unclear regulations.

States with more lenient regulations on gambling-related activities, such as Nevada or New Jersey, might be more favorable for this business model. However, as you can see, your question has no easy answer, as it should be analyzed in a particular context and tailored to your situation. Feel free to reach out if you want to discuss further.

A: Based on current laws, sharing sports predictions and odds information without facilitating gambling or linking to betting sites appears to be legal at the federal level in the United States. However, some states have specific regulations around gambling-adjacent services, so you'll want to consult with a qualified attorney to review your specific business model.

For state selection, Delaware and Wyoming are often chosen for their business-friendly environments and straightforward LLC formation processes. Both states have clear regulations around gambling-adjacent services and maintain relatively low ongoing compliance requirements. I cannot provide LLC registration services, but you can work with registered agents or legal professionals in your chosen state.

The key to maintaining legality is ensuring your app stays focused purely on predictions and analysis, without crossing into gambling territory. This means avoiding any direct links to betting sites, not processing bets, and being clear that your service is for entertainment and informational purposes only. You should also consider implementing strong age verification measures and clear terms of service to protect your business.