Understanding U.S. Online Poker Laws
The legal climate for online poker in the United States can be a little murky and confusing. While we're not legal experts, we can help you navigate through those murky waters and make a little sense of the legality of online poker in the U.S.
Let's start with the basic fact that there are no federal laws on the books that specifically say it is illegal to play poker online. There have also never been any prosecutions of anyone playing online poker in the United States. The only state in the U.S. that specifically makes playing poker on the Internet illegal is Washington, and they haven't prosecuted anyone under that law either.
What the Laws Are
There are federal laws on the books that affect Internet gambling. The Congressmen and organizations that oppose online gambling point to the Wire Act of 1961. The Wire Act states that "Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both."
Strictly speaking, the law deals with sports betting and makes it illegal for businesses to take bets via the telephone. This has been expanded somewhat to include the Internet as being a "wire" communication as well. In the U.S. it is widely accepted that online sports betting is just as illegal as taking bets over the telephone.
Some officials say that this would apply to all online betting, including Internet casinos and poker. However, a federal court has already ruled that the Wire Act doesn't apply to online gambling.
In 2001, Judge Stanwood R. Duval Jr. of the U.S. District Court in New Orleans threw out a case against Visa and Mastercard for allowing their cards to be used for online casino and lottery gambling. One of the determining factors for throwing out the lawsuit was that the judge determined the Wire Act only covers sports betting.
What most people confuse as making Internet gambling and Internet poker illegal is the Unlawful Internet Gambling Enforcement Act (UIGEA) that was enacted in 2006. The UIGEA makes financial transactions between banks and other financial institutions illegal. It doesn't outright make Internet gambling itself illegal, but it makes it much harder for U.S. residents to deposit money into online gambling sites. Some transactions are exempt such as check-cashing and money order services conducted from a physical location. The UIGEA also doesn't block the flow of money from the online gambling sites to the players.
When the UIGEA regulations went into effect in January 2009, they did little to actually clarify what constitutes illegal online gambling. Instead the regulations rely on the existing legislation and state laws to determine what would be illegal online gambling. It is up to each jurisdiction to determine if the gambling activity is legal or not, and no exemption for poker was made in the UIGEA itself.
The Poker Players Alliance, a grassroots organization dedicated to protecting poker players' rights, argues that poker is predominantly a game of skill which exempts it naturally from being considered "illegal" online gambling. Internet poker takes the same skills and talents as live poker in a home game or a casino in order to win. It's not just about the luck of what cards you get, it's also about observing betting patterns and how you play your own cards that determine whether you come out ahead or not.
Another distinction between online poker and online casinos or sports betting is that players compete against each other, not against the house.
Despite these distinctions and the UIGEA still not specifically outlawing Internet poker, several online poker sites chose to leave the U.S. market. Among those are Party Poker, which also engages in an online casino business and is a publicly traded company, and sites like Titan Poker, William Hill and Everest Poker. There are many regulated and reliable poker sites that have remained U.S. friendly, though.
Poker sites that are still accepting U.S. customers include Full Tilt Poker, Ultimate Bet and its sister site Absolute Poker, Sportsbook Poker, Carbon Poker and PDC Poker.
It's important to note that these poker sites are all operating legally and regulated in the jurisdictions they've chosen to set up shop in. The countries they are based in do require the sites to be licensed and follow certain guidelines. Just because they aren't based in the U.S. doesn't mean they're allowed to run willy nilly any way they want, and the top sites around the world are perfectly safe and secure to play on.
State Laws Regarding Online Poker
One thing the UIGEA did do was clarify that it is up to existing laws and state laws to determine what is "illegal" online gambling. In that respect, it could be said that at the federal level, only online sports betting is illegal. In fact, horse race betting is expressly permitted in the UIGEA to allow for the online horse race betting that states like Kentucky rely on for revenue.
For the most part, the states don't have laws on the books either saying whether online gambling is legal or not. There are a couple states that don't permit gambling businesses of any kind - Utah and Hawaii - so it is safe to assume they're not online poker friendly either even though their laws don't specifically include web gambling. Washington state, however, enacted a law that makes playing online poker a felony.
There are several states that are more friendly toward online gambling. Both North Dakota and California have looked into whether they would be able to set up legal online gambling under the UIGEA as long as it is operated only within their borders for residents of the state. California is actually began moving forward with legislation in 2009 to set up regulated online poker in the state. It would allow any licensed poker room within the state to also offer an online poker site restricted to residents in the state.
If you're interested in playing online poker, you should find out what your state's law is. You can find a basic summary of state laws at Gambling-Law-US.com.
Online Poker's Future in the U.S.
While some poker sites have chosen to remain open to U.S. customers and others have left the market, there have been organizations and Congressmen working to fully legalize online gambling in the United States.
It may only be a matter of time before the United States legalized and regulates online poker. Rep. Barney Frank (D-Mass.) has been quite outspoken about his opposition to the UIGEA and any attempt to ban online gambling in the United States. He considers it an issue of personal freedoms and has since introduced legislation to not only fight the UIGEA but to set up a system to license and regulate Internet gambling in the U.S.
In 2007, Frank introduced the Internet Gambling Regulation and Enforcement Act in the House of Representatives. Though the bill has never made it out of committee, Frank has continued to fight for online gambling. He reintroduced the bill in May 2009 as the Internet Gambling Regulation Consumer Protection and Enforcement Act.
He's not the only Congressman looking to legalize online gambling and rake in the billions of dollars in tax revenue the industry could inject into the United States. Sen. Robert Menendez introduced a bill in 2008 to provide for the licensing of Internet skill games, which would include online poker, in the Senate. Rep. Jim McDermott also introduced a bill to modify the revenue bill to tax Internet gambling, and later another bill to designate some of that tax money for Social Security.
Poker players also gained new hope with the election of President Barrack Obama. President Obama is known to have played in regular poker games while serving as Senator and is much more likely to approve regulating and licensing online gambling in the U.S. than former President George W. Bush was.
President Obama had also asked citizens to submit policy proposals to be voted on through his Web site, www.change.gov, and online poker fast became one of the top vote getters on the site. Online poker was the top technology issue and the 11th biggest issue overall and as such it made it into the Citizen's Briefing Book in May 2009. The Briefing Book will help President Obama address what the citizens think should be his top priorities.
Bottom Line
Despite all the legal wrangling and talks of the Wire Act and the UIGEA, it still all comes down to the basic fact that actually playing online poker hasn't been made illegal at the federal level. The business of online gambling in the United States isn't legal yet, but with the exception of Washington state, there's nothing saying you can't play online.