Online Poker Laws in the US: What are the Legal Frameworks Surrounding Online Poker Across Different Jurisdictions in the Country?
Online poker in the US dates back to as far as 1990 when people played free poker on platforms like IRC poker. Over time, technology evolved, and real money poker rooms like Planet Poker and PokerStars were launched. However, Chris Moneymaker’s win in the 2003 World Series of Poker championship was the final catalyst that led to the industry being a major force today.
Since the first online poker room was launched over two decades ago, there have been questions and serious debates regarding its legality, especially in the US. Unlike other online casino games, online poker isn’t entirely luck-based, so it mostly has different laws governing it.
This difference in legal perspective has led to varying interpretations of poker laws and regulations in various states in the US. Here, we’ll explore some of the laws regulating online poker across different jurisdictions in the country. For more information, you can get insights into successful advocacy efforts for fair poker legislation here.
Federal Laws
Apart from state laws, the federal government has laws governing the activities of playing poker on the Internet in the United States. The main laws are discussed below:
1. Unlawful Internet Gambling Enforcement Act of 2006
Talks about regulating online gambling began after the astronomical rise of Planet Poker’s popularity in 1998. This led to the introduction of the Internet Gambling Prohibition Act in 1999, a bill primarily aimed at banning Internet gambling in the US. However, due to the efforts of eLottery, Inc. and lobbyist Jack Abramoff, the bill was defeated.
In October 2006, President George Bush signed into law the Safe Port Act, and contained in this bill was a provision titled the Unlawful Internet Gambling Enforcement Act (UIGEA). According to the UIGEA, placing wagers for bets in the US through the Internet was illegal. So American financial institutions were prohibited from performing transactions like funding poker accounts and processing withdrawals.
Following the passage of this bill, several online poker card rooms witnessed significant negative impacts on their stock values, with companies like Bwin, PartyPoker, and PacificPoker opting to leave the US market. The bill also led to the formation of the Poker Players Alliance (PPA), a group set out to protect online poker players. In less than two years of UIGEA passing, the association amassed over a million members and fought to amend the bill.
In 2008, Rep. Robert Wexler proposed the Skill Game Protection Act (HR 2610). An amendment to the UIGEA that’ll provide exemptions for skill-based games like poker. However, this and several other attempts by the PPA failed.
2. The Internet Gambling Regulation, Consumer Protection, and Enforcement Act (HR 2267)
HR 2267 was introduced in the US House of Representatives in July 2010. The bill was approved by the House Financial Services Committee and aimed at regulating online poker in the US instead of a total ban.
Despite amassing support from various industry stakeholders and lawmakers, the bill failed to progress past the committee stage, with many citing concerns of potential economic and social consequences as reasons. That same year, the Washington State Supreme Court passed a ruling confirming playing online poker as a felony. From there on, the government began cracking down on online poker sites after having given a six-month delay to allow compliance from both financial institutions and the poker sites.
On April 15, 2011, a day now regarded as Black Friday in the online poker world, the United States Department of Justice seized the assets and domain names of the three major poker sites operating in the US. PokerStars, Absolute Poker, and Full Tilt Poker were charged with unlawful gambling and money laundering. This move significantly changed the online poker landscape, and its effects are still felt today.
3. Federal Wire Act
The Federal Wire Act, as it pertains to online poker, has been heavily debated in recent years. The six-decade-old Act was initially intended to combat crime by making the use of wire communications to place bets or sharing wagering information illegal.
The DOJ argued in the past that this Act applied to all forms of online gambling, poker included, but in recent years, there have been statements that only sports betting was intended. In 2019, a federal court ruled that the Act doesn’t apply to online gambling and lotteries, so it doesn’t make online poker illegal.
State Laws
Over the years, some states and jurisdictions have identified online poker as a lucrative and vital aspect of their economy, legalizing it in the process. In 2013, Nevada became the first US state to legalize online poker and began offering licenses to various poker sites offering real money games.
That same year, New Jersey legalized online poker, provided the sites obtained a license and adhered to the DGE regulations. Pennsylvania joined the exclusive club in 2017, with operations starting in 2019.
Michigan is the latest state to legalize poker after doing so in 2019.
Some states, on the other hand, have explicitly banned online poker. In Washington, for example, playing online poker is a felony, and players could be arrested, prosecuted, and face possible jail time. Utah also has explicit anti-online poker laws.
The Bottom Line
Online poker has faced many legal challenges since its inception, but all this is expected to change as the industry grows. Analysts are predicting that more states will legalize online poker due to its immense economic benefits, and there is even optimism that it could become a legal activity nationwide, but that is far-fetched as there are currently no talks of legalization at the federal level. However, this is the current legal framework of online poker in the US, but it’s also important you stay alert and informed, as things can change very swiftly.
