Matt, you seem to know more about the legal framework than most other posters here. Which 6 states would you avoid? I have an important reason for asking since I'm working on a startup that uses a similar system -- very different in some respects, but certainly similar enough in others that your insights are valuable to me. You can email me privately if you prefer, my email is owkaye at gmail dot com.
Arizona, Iowa, Louisiana, Maryland, Montana, and Vermont all have very restrictive gaming/sweepstakes laws. You'll notice nobody who does fantasy sports or skill games for money (cbssportsline.com, worldwinner.com, etc.) allows customers from those states.
I'm really not sure if this auction system would qualify. I would really check with a lawyer versed in online gaming and sweepstakes if I were doing something like this. If you need, I can recommend the firm that almost every American who runs a casino or poker site uses.
