There was a story recently about a guy who got in some trouble for practice casting a rod on the grass in a park in NYC across from a fly shop because there was "no fishing allowed." Not sure how that translates for you, but I think it would be safer to get the license (why not, you'll be fishing for live ones soon enough, right?)
Years ago, my wife took our two then young boys and a couple of their friends to a local lake for a few hours of shore fishing for panfish (the kids had been bugging her to take them fishing, and I was at work). She was attempting to assist my younger son (maybe 4 y/o, at the time), untangle his closed-faced spinnig reel (probably for the third or fourth time that hour) when the local game Warden walking the shore line told her that she needed to have a fishing license if she was going to fish....
This happen to me in Washington state. I bought a float tube and wanted to try it out before Trout season started in this little lake. When I got there a fellow was fishing he said hi, looked at my tube and left. I got on my waders/fins and launch the tube. I was floating around doing turns and just getting use to the tube. No fly rod or vest. In a short time a Fish and Game guy drove up and called me over to shore. He wanted to know what I was doing. I told him and he said I had to quit. That Trout season doesn't open for a couple of weeks. When I told him I wasn't fishing he said to anyone driving by it looks like you are fishing and I had to stop or others would come. I asked if I could practice casting with the hook broke off but he said no. The same problem. Other people won't know that I am using a fly with a broke hook. Apparently this was a hot spot for fishing and they had a problem controlling law breakers. It made sense to me so I moved on and thanked the guy for not giving me a ticket.
So in regards to your question. I think it has a lot to do with where you are casting. If you are casting in water that has regulations I think you might be in trouble. Especially if the waters are closed right now. If you look at the Fish and Game book of regulations it will probably state what they consider fishing. Yarn could be considered a lure. It is used as a fly/lure for several different fish. If it was me I would cast on the grass or get a license.
One option, if you have a park, get permission to use a pond as a casting pool. Another option is to call the Fish and Game department and ask them where you can practice casting in water. Water does offer a better practice experience. I never liked casting on grass. Just not the same and you can't practice all types of cast.
Buy the license. Intent & interpretation of laws or regulations are two different things, and there seems to be a total lack of common sense these days.
As the others have given examples of situations that should have been easily accepted, but were not, it would be far too easy to get yourself in trouble. Much easier & less expensive to avoid the trouble than try to deal with it afterwards.
My brother in law just pointed out a story to me where a woman in PA has been feeding lunches to about 60 poverty level children, using her own money & time.
Apparently she has been told by the local law enforcement she must stop or face legal issues. This has nothing to do with fishing, but is another example of the total lack of common sense in the world today.
Turbine: look up your state fish & game, or wildlife dept, or whatever agency writes and enforces the regulations and call them. Every state has it's own rules and regulations. If by chance your state has a rule against casting a "zen fly" into water without a license and an officer stops you, telling him that some people on the internet said it was OK isn't going to get you very far.
It is always the fisherman's or hunter's responsibility to know the laws and regulations.
One last anecdote on why you could possibly need a license: in my home state they fish for the toothy, prehistoric gar with a combed out piece of nylon rope, no hook.
Thanks for the responses here. The area I'm referring to is in DE, so I asked the game officials there. I just received this response (names redacted):
You will not need a fishing license to do the type of casting that you inquired about at Cape Henlopen. Make sure that you do not have any hooks or flies on your person. Don’t hesitate to buy a fishing license however, they are cheap and the money is allocated to support fisheries in Delaware. If you are a fly fisherman and live in the Cape Henlopen area, there is a great bunch of guys that have a fly fishing club in the area. They are the Saltwater Fly Anglers of Delaware and can be found on the web at Saltwater Fly Anglers of Delaware . I work with some of their members on a regular basis.
Regional Enforcement Supervisor
Delaware State Parks
It looks like they're pretty reasonable in DE with this kind of thing. I understand that in other instances this may not be the case -- so I'll be careful about it.
The best thing to do in this case would be to get a license. It would also be wise to look into whether the body of water is open to fishing. Law enforcement doesn't care what your intentions are, so if it looks like fishing, it's fishing. There is a local lake that used to be closed during March, and poachers hit it pretty heavily anyway. These same people fish year round without a license, and employ a crude but effective method: cast a line into the water, and hide in the trees and bushes. When they're certain the rangers aren't around, they come out from their hiding spot and retrieve their line and catch. I see these guys all the time while canoeing, but the rangers don't use a boat there, and walking the trails would take all day (they are county rangers, and have MANY lakes and streams to patrol throughout a day).
Imagine a guy walking through state gamelands with a rifle and no ammo the day before deer season opens. The game warden gets a call, and he drives out to investigate. He approaches the guy with the rifle, who says, "I just bought this, and wanted to take it along while scouting for deer." The game warden could search him and his vehicle, but he could have stashed his ammo anywhere (if he had any). There are a lot of jerks that do this sort of thing, so don't expect to get much understanding/sympathy from law enforcement. It would appear that you're only practicing, but you could have tossed a couple hooks into the bushes when you saw the ranger coming, etc. I knew a guy that used to bring 10 spinning rods to a lake stocked with trout. He'd take them one by one, and position them around the lake, using small hooks and powerbait. After waiting a while, he'd just as casually make his way back around the lake, and retrieve his line and catch one by one. There are guys that take their limit, and put it in the trunk of their car, only to then go back for more. I see that at the above mentioned lake all the time. Stocked trout don't mean a lot to me, but if they were doing this with bass, I'd call the rangers immediately.
Long and short, they've seen a lot of different stuff, and will assume it's just another bag of tricks. I know some fly instructors that take students to large fountains at universities and colleges, etc. If you want water without a license, something like that would be a good idea.
Just buy a license, it supports your fishery. In my opinion, everyone using the water should have to buy one weather it is to fish, swim or canoe/kayak. Why should we be the only one paying to keep these areas nice for everyone else to use? It is kind of funny, I just did a work day with TU and the work we were doing was fixing steps at various access points that the kayakers and canoers use. Think anyone that uses the river to kayak or canoe on was there to help? Nope.
Just by the license and be glad you did your part to help your local fishery. I don't know about where you live but here, it is the only thing we pay the state for that we actually see our money being put back weather it is new line recycling boxes at the popular spots or new fish ladders.