I am personally planning to build a donation-based crowdfunding sporting (like chess, shogi, go, etc.) website . I would like to know if it is legal to gather donation from the users then pay the winner of the 1-on-1 event with the total or part of the prize pool. Also is there any difference if only the event participants add money to the prize pool? In such case would it kind of look like "betting"?

If it is legal, what are the conditions? Do I need to do it as a corporation ? or can I do it without having any company?

Does it depends on the country? If yes, shall I block that feature to the users located in the countries where it is not allowed? Or it is all about where the servers or legal entity is located?

Do I have to care about the taxes the events' winners have to pay? Or once the money is paid to them, they have to handle themselves all the tax part?

  • 1
    What jurisdiction are you setting this up in?
    – hszmv
    Commented Feb 27, 2020 at 14:05
  • @hszmv well I am not sure yet. Any one in the world would be able to access and I don’t have any company.
    – Marko_3rd
    Commented Feb 28, 2020 at 3:47
  • This sounds just like off-track betting, which may well be prohibited by the jurisdiction in which the sporting event occurs, or the bets are taken or paid out. Commented Jul 27, 2020 at 3:29

1 Answer 1


You are running a business

One that holds sporting events and sources it’s funds from the public who are interested in supporting those events. It doesn’t matter if you business is for profit or not-for-profit it’s still a business.

You are no different from any other business.

All the normal laws apply to you - tax, liability, insurance, employment, contract etc. you need to do what other businesses do - hire a lawyer and accountant.

  • Hi Dale, thank you for your reply. I see, that answers to a part of my questions. Any idea if it is something legal and considered as donation based crowdfunding?(which is legal)
    – Marko_3rd
    Commented Feb 28, 2020 at 3:46
  • To qualify as a donation it must be a gift. Once you start to promise anything in return (like running a sports tournament) it’s payment for services.
    – Dale M
    Commented Feb 28, 2020 at 4:20
  • I see ! Thank you for that clarification ! So: 1) As long as the participants get the money they were promised to get, gathering money then paying them is itself not an illegal practice right ? There should be some countries where paying with actual money is not legal I guess? 2) What if only the two event's participants add money to the prize pool ? Is it still considered as a simple payment for services ?
    – Marko_3rd
    Commented Feb 28, 2020 at 5:13
  • 3) What if the users only share how much they would add to the prize pool if the event actually happen. Then if satisfied only, they proceed to the fund transfer ? This would still end up as a payment for services ? Or a form of tipping ?
    – Marko_3rd
    Commented Feb 28, 2020 at 5:22

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .