Watching bootlegs movies online can have serious legal implications if the user downloads even a small portion of the file or if he uses the file, either by streaming or downloading, as part of a public performance, says Business Insider. These are violations of copyright protection laws. In all other cases, streaming bootlegged material, as for personal use, is considered legal.
The user who posted the copyrighted material on the other end of the person legally watching it by streaming is breaking copyright regulations, explains Business Insider. Online streaming sites steer clear of the law by not technically hosting the streamed material. The sites act as search engines that allows the user to find links to the hosting sites. According to the U.S. Supreme Court, such sites can only be charged with copyright violation through a measure called the "inducement rule," which says that a site must encourage users to infringe on copyrights to be held liable.
The linked sites, where the content is held, are in clear violation of copyright law, says Business Insider. However, they are usually much smaller than the primary streaming sites and harder to track. These sites stream the content to the user without going through the initial site.