Sports Betting App Bait: Bet on Games With Your Friends

Update: The bait app has closed, with no plans to relaunch. For now, there is no legal app to bet with friends.

A tech-savvy entrepreneur has big plans to take up social sports betting and remain on the right side of the law at the same time. Ian Peacock was studying at the University of South Carolina when he came up with the idea for an app that will help you and your friends place friendly wagers on sports.

The app is called Bait and it will work by syncing with your phone’s contact list so you and your friends can challenge one another to heads-up wagers on upcoming sports events. Rather than placing bets with an offshore bookmaker, you can cut out the middleman and bet directly with your contacts.

Once you and your friends have installed the Bait app, you can set up head-to-head wagers using current Las Vegas betting odds. It would work something like this:

You and your friend agree on an amount to wager, log your bets and then wait. Once the result of the game is known, Bait notifies each user of the outcome and directs the loser to the winner’s Venmo account to pay up.

Initially, Bait plans to give users the ability to bet on moneylines, point spreads and over/under point totals. Ian Peacock says they plan to launch the iphone betting app within the next few weeks in time for the coming NFL season.

Is Bait legal?

Bait takes two important steps to distance itself from illegal online gambling. First, the Bait app will not handle money at any time. Bait bills itself as a simple app to help you and your contacts keep track of friendly wagers. There are no obligations to pay up; what happens after any bet is up to you and your friends.

Bait will not enforce payment, but it will employ a rating feature by which users can rate one another for payment or non-payment of bets. Anyone refusing to pay up after losing a bet will face no consequences from Bait itself, but refusal to pay will likely lower a user’s public rating.

Second, Bait does not take a commission for helping users keep track of their wagers. Actual bookmakers make money by charging a premium for hosting wagers for bettors. Bait instead hopes to make money by displaying ads to users. This is a key distinction as Bait will not be directly profiting from betting activity.

It sounds like a solid legal strategy, but only time will tell if is enough to dissuade authorities from giving them any trouble. Bait hopes to separate itself from the actual business of gambling by simply acting as a tool for users to keep track of their friendly wagers.

If Bait does end up facing legal challenges, they are likely to originate from the Federal Wire Act of 1961. The Act is wide in scope and laws that are wide in scope can cause trouble for anyone.

From the Wire Act:

“Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

Nothing in this section shall be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal.”

The bolded line above could potentially prove troublesome for the founders of Bait. Depending on your interpretation of the Wire Act, it may not be necessary to actually transmit money related to sports betting. Simply transferring information “assisting” in betting may be enough to put the kibosh on Bait.

However, that bolded portion of the line only applies to someone being “engaged in the business of betting.” If it is determined that Bait is not engaged in the business of betting, they should be fine from a legal standpoint. After all, Bait does not directly engage in betting; it merely assists users in managing publicly-available information.

I spoke with Ian Peacock earlier today and can confirm he has definitely done his research regarding the Wire Act, UIGEA and other laws. One of the main points he made in our conversation is that Bait does not actually assist anyone in placing “bets” according to the legal definition of betting.

The most widely-accepted legal definition of a bet or wager insists that three elements must be present: consideration, prize and chance. Let’s look at each of those three.

• Consideration: the participant is required to risk money or something of value
• Prize: the participant stands to win money or something of value
• Chance: the outcome is not determined by skill

This definition is vital to gaming laws in the United States because it’s what separates normal, everyday transactions from gambling. It is this definition, for example, that makes it perfectly fine for you to pay money to enter a bowling tournament and win money but not legal for you to bet on that same tournament as a spectator.

As a participant in that bowling tournament, the element of chance is removed. Your results and subsequent winnings are determined solely by the skill you display in that tournament; you are in control of your own destiny. Consideration and prize are present in this example, but chance is not.

If even just one of the three afore-mentioned elements are removed from the equation, it isn’t gambling.

Ian Peacock contends that Bait removes the element of consideration. Sure, people can sign up and agree on wagers, but no money is collected and there is no enforcement of payment. If someone chooses not to pay after the wager, they suffer no consequences other than the possible ire of their friends and negative reviews on the app.

Imagine visiting a casino and placing a bet on red. The croupier spins the wheel and the ball lands on black. Normally, you’d be out a little money, but this is a strange and mythical casino. The dealer informs you that you’re free to leave without paying up. You have the option to pay, but nothing will happen if you decide to keep your money and leave. That whole sequence of events would not meet the legal definition of betting.

That’s sort of how Bait works. You and your friends agree on the bets, but no money exchanges hands unless you choose to pay up. Naturally, you wouldn’t want to bet large sums of money with complete strangers, but that’s why Bait positions itself as a social betting app between friends and acquaintances. Plus, they have that Uber-like rating feature that should help you avoid the worst of the non-paying offenders.

If you’re interested in betting with friends, look for Bait to go live in the App Store within the next several weeks. Ian Peacock and his team are looking forward to getting this app in front of as many eyes as possible before the start of the NFL season.