Would this still be considered as illegal ?

Gaming Law is highly complex and easy to run afoul of. Go to the California Bureau of Gambling Control's web site and look around. Then call an attorney with experience in this field. The law is also available in the business and professions code, but you are in for a very long read. If you discver that you need a gambling license be prepared to pay about $8,000.00 to the state for the investigation fees and your registration fees. You also have to make numerous financial and personal disclosures. If you go ahead without a license and it turns out one is needed you can expect a lifetime bar.

Your question involves what is commonly referred to as 'skill gaming.' So long as the contest participants are not wagering on real sporting events, the Wire Wager Act, which prohibits sports betting, will not be implicated. However, skill gaming is a complex legal field, and some states still prohibit the activity. If you allow users from all the states to participate, you are potentially subject to the laws of all 50 states. A skilled gaming lawyer should be contacted to provide a legal opinion regarding your proposed gaming business model, and some advice regarding geo-blocking.