Its illegal in Canada would be the main one that comes to mind.
Also players claim there is cheating or disconects from the server then ask for their money back.
My only idea that would work is to have your current membership have time taken off if you lose that way your not buying or gambling money upfront. You would just be spending your online time instead of money. Then when you expire it you just buy a new 1 year membership and start all over.

Winners would earn extra time added to their membership.