Why These 15 Side Hustles Are Actually Illegal

MAKE MONEY - SIDE HUSTLES
Uncover the hidden dangers behind these 15 tempting but illegal hustles.
Updated April 17, 2024
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You’ve likely heard about people who make extra money outside of their regular 9-to-5 jobs. Side hustles are becoming increasingly popular as more Americans try to optimize their downtime.

However, not every gig is entirely legal. Some side hustles are flat-out against the law, while others can get you into trouble if you don’t follow the rules.

To keep your hustle lucrative — and avoid legal trouble — here are some side hustles you should avoid.

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Reselling pirated books

Syda Productions/Adobe Woman reading a book

Many people sell e-books online, but that doesn’t mean it’s always legal.

This one falls under the umbrella of copyright law: It’s not legal to reproduce someone else’s work with the intention of selling it if you don’t have their consent.

So forget that dream of selling the work of other authors in the hope that you can make enough extra cash to retire early. Of course, selling an e-book you have authored is generally fine.

Scalping tickets

Rawpixel.com/Adobe tickets buying payment event entertainment concept

While it may seem like people get away with this activity all the time, scalping tickets — or buying and reselling them at a higher price — is illegal in several states.

So check your state law before engaging in the practice of reselling tickets.

Betting on sports

Drobot Dean/Adobe friends watching football match

This one is a little dicey: Sports betting is highly regulated throughout the country. Some states allow it, but it is outright illegal in others.

Plus, sports betting — or betting of any sort — is probably not the most reliable way to generate side-hustle income.

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Breeding animals

Iurii Seleznev/Adobe amazing lady holding ginger pet

Breeding pets such as puppies and kittens may seem like the ideal side hustle, especially if you’re an animal person.

However, many regulations are in place for breeders that are intended to protect the welfare of animals. Doing this incorrectly could have legal consequences.

Hacking

Thapana_Studio/Adobe cybersecurity and privacy concept

Tech-savvy side hustlers may be tempted to make a few extra bucks hacking. Hackers break into servers or computers by figuring out how to get through security measures.

No matter how you're trying to sell your hacking skills — perhaps by offering stolen data to a buyer — you're committing a crime when you hack into a computer without permission.

Selling fakes

Renovacio/Adobe fake designer bags

Selling counterfeit goods online or on the street can get you into serious legal trouble. That's true even if you consider selling fakes a harmless or "victimless" crime.

Popular counterfeit items include phony designer shoes, clothes, and jewelry. It's best to avoid getting involved with peddling any of these.

Performing ‘under-the-table’ work

Nata Bene/Adobe seamstress

The problem here is tax evasion: If you are doing a job and neither you nor the person paying you is reporting the income to the IRS, you might be breaking the law.

Plenty of people pick up odd jobs or freelance work. But if you’re making money, it all needs to be reported on your taxes.

Selling homemade food without a permit

Hanna/Adobe homemade chocolate chip cookies

You can likely sell baked goods such as cakes and cookies. However, many states require you to be licensed and follow other rules before doing so.

Hot foods or those that require refrigeration also might be regulated a bit more due to food-safety concerns.

Engaging in Bitcoin scams

SAK GFX/Adobe stock market graphs with golden bitcoin

Bitcoin is often touted as a “get rich quick” solution to money problems. Unfortunately, this reputation has led to a rise in Bitcoin scams.

In one example, some bad actors online have found ways to convince people to send them cryptocurrency.

To clarify, it’s the crypto schemes that can get you in legal trouble. Investing in crypto yourself might work for some as a side hustle, although it involves a fair amount of financial risk.

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Counting cards

LIGHTFIELD STUDIOS/Adobe man touching playing cards

Card counting — or closely watching a dealer’s deck to make wagers while playing games like blackjack — is not technically illegal, but it can get you thrown out of casinos.

Plus, it's incredibly difficult to pull off despite how frequently we see characters doing it in movies. So, while this scam might not be “illegal,” it’s certainly unwise.

Hosting poker nights

Drazen/Adobe senior woman playing cards

Believe it or not, trying to make side-hustle money by hosting poker nights out of your home might get you into legal trouble.

For example, if you advertise a poker event at your home or charge an entry fee, you may be breaking the law in your state.

Participating in pyramid schemes

Rawpixel.com/Adobe ponzi scheme

Not all multi-level marketing (MLM) programs are illegal, but many are pyramid schemes in disguise — and those are illegal.

If someone is trying to recruit you into a marketing program, and the way to make real money seems to be recruiting other sellers — who pay to join — rather than selling a product, beware that it could be a scam.

Running an unlicensed day care

Rawpixel.com/Adobe young children enjoying in the playroom

Offering babysitting services and running a daycare out of your home are two different things.

While many side hustlers make good money babysitting, if you plan to care for multiple children in a home, you'll likely need to register or get licensed with your state. That way, you can ensure the space meets health and safety standards.

Engaging in Instagram ‘get rich quick’ scams

ink drop/Adobe instagram app

Unfortunately, scams regularly pop up on Instagram. If a “get rich quick” scheme seems too good to be true, it probably is.

To pull off a scam like this, a bad actor might create an account and share information such as money advice. Ultimately, the scammer convinces followers to invest cash before pocketing the money and disappearing.

Not reporting income as an influencer

ChayTee/Adobe live stream talk on phone

Whether you’re on Instagram, YouTube, TikTok, or all three, any money you make — often including gifts — as an influencer or content creator must be reported to the IRS.

Influencers who do not report this income are technically evading taxes. These creators are considered “self-employed” and should receive a 1099-NEC form from every company they work with that pays them $600 or more.

Bottom line

Jadon B/peopleimages.com/Adobe man doing research in a coffee shop

From pet-sitting and freelance writing to landscaping services, plenty of lucrative side hustles can boost your bank account and keep you on the right side of the law.

So explore one of those opportunities to earn and skip other side hustles that could cost you more legal fees over the long run.

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Author Details

Laura Gesualdi-Gilmore Laura Gesualdi-Gilmore is a seasoned freelance writer who also teaches writing courses at Rutgers University. She's based in Jersey City and enjoys travel, live music and, of course, spending quality time with her pup.

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