I'm sorry (for lack of a better opening), but that is the weakest shit I've ever heard. No brackets!? WTF. PLUS the house isn't even taking a rake. Let me guess, if I have a home poker tournament (legal w/no rake) I'd have to report the winnings? I don't see how a home poker game be legal but brackets not.
Like I said, there HAS to be a way around it. Take it underground and offline.