Poker online that’s legally experienced a turbulent past within the United States ever since Planet Poker first began online in 1998. At first, the legal world of online poker operated in a vacuum. It was not just the first time that online poker was being played and the internet, but it was a brand new technology that was yet to trigger any legislation.
The popularity of online poker quickly turned into an international phenomenon, thanks to Chris Moneymaker’s 2002 World Series of Poker win. The Moneymaker, who was appropriately named, qualified for the buy-in of $10,000 to the WSOP Main Event for only $80 and then turned it into a $1 million cash prize. Millions of dollars were pumped into these websites every single day, and they began advertising and sponsoring poker shows across the air. Online poker was everywhere, but not in federal law books. In 2006 the first piece of a federal law of legal online poker came out as known as the Unlawful Internet Gambling Enforcement Act (UIGEA).
I’m referring to connected because the UIGEA didn’t specifically address poker. It was a vague law that left poker in a grey legal zone. In particular, the law prohibited US companies from “knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”
As you will see, poker was not mentioned in the law and it does not prohibit anyone from betting or playing on the internet but it does prohibit businesses from making and receiving payments. Poker itself wasn’t legally regulated at the Federal level and isn’t. In the absence of new law, some poker websites like PartyPoker have been withdrawn from The United States. Others, such as PokerStars, Full Tilt, Ultimate Bet, and others stayed in the US.
However, these companies began to engage in illicit transactions with a bank located in Utah. The bank began processing gaming transactions but classified the transactions as different kinds of transactions. The FBI began investigating, and on April 15th, 2011 it shut down the gaming sites and issued warrants of arrest for a variety of executives.
Since then, there’s no any federal regulation of poker. It’s fascinating because the majority of senators who voted for UIGEA did not necessarily support legal online poker, and were unaware of the provisions included in the bill. It was added as an amendment at midnight on the Security and Accountability For Every Port Act of 2006. The entire bill was passed by the House in a rare bipartisan vote of 409-2 and 100-0 votes in the Senate due to the need to secure the ports of the United States.
There was no national appetite but states got started. In 2013, Nevada was the first state to adopt legal online poker legislation , and New Jersey and Delaware soon followed suit. With growing numbers of states considering the issue and with the recent Supreme Court ruling allowing states to allow sports betting it appears that the issue is left each state to decide whether or not to legislate online. Another intriguing aspect is that no state has specifically enacted legislation for legal poker on the internet.
It’s common for players of online poker in America to be concerned regarding the legal issues associated when playing online for real money. The players are not only required to be knowledgeable of the federal laws about legal internet poker as well as other types of online gambling as well as the gambling laws of every state across the US.
Here’s a brief overview of federal regulations for online poker.
The 2006 UIGEA
Poker online first came into existence in the latter part of the 90s. It saw a meteoric expansion in a regulatory vacuum. This was mainly due to the internet was a new concept that legislators were still trying to with the technology. The first attempt was to pass the Unlawful Internet Gambling Enforcement Act 31 USC 5361-5366. The bill was previously attempted to prohibit online gambling in 1999, but the legislation was defeated. However, in 2006, Senate Majority Leader Bill Frist (R-TN) and Jon Kyl (R-AZ) rushed the bill through the Senate to be attached to the SAFE Port Act.
Senators and members of the House were able to review the language of the law before it was passed. But you can look over the complete text of the bill here.
It’s a long read and is somewhat unclear. This is what caused certain poker sites such as Partypoker to quit the country, while other sites like PokerStars have decided to stay in the US. This was a calculated bet that ended up expensive for PokerStars and other websites in 2011 after the Department of Justice seized domain names and indicted several individuals.
Black Friday and the 2011 DOJ Investigation
It was a typical Friday on April 15th, 2011. Poker players who woke up early to log onto PokerStars, Full Tilt, and Absolute Poker as they have in the past few years. But those who woke later in the day were greeted by a call from the FBI:
Players who did not log off were still able to play, while others were able to hang on for the long haul. This was followed by charges against Isai Scheinberg, Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie, and John Campos. They were charged with various charges including Violation of the UIGEA, Operation of Illegal Gambling Business, and the Laundering Conspiracy.
The indictment was spearheaded by Preet Bharara, the United States Attorney for the Southern District of New York, and Janice Fedaryck, the Assistant Director-in-Charge of the New York Field Office of the FBI.
The case was heard in judge under the name “The United States v. Scheinberg”.
Campos, as well as Elie, were both arrested the same day. Franzen came to a plea bargain and Rubin was detained in Guatemala. Bitar surrendered one year later, and Scheinberg evaded authorities until 2020 when he surrendered to the authorities in New York.
Nevada Legalizes Online Poker
Although the UIGEA left some doubts about the law of online poker, Black Friday made things…black and white. This is when states took matters into their control. It’s not surprising that the first state that legalized online poker was with the bill AB114 which begins with:
“An Act relating to gaming, defining some terms that are related to
interactive gaming Authorizing the Governor to participate in
agreement with the other state to carry out interactive
game; changing rules regarding the gaming policies
committee; prohibiting licensing of operators to operate
interactive gaming for certain individuals; updating rules
that is related to interactive gaming, and also providing other information
correctly relating to it.”
The other States Following Suit
Nevada approved legal online poker legislation in February. 13th, 2013, and New Jersey was very close to following. Then-Governor. Chris Christie signed the online gaming legislation into law in February. 26 the 26th of February, 2013. This bill was floated about for a while, and should New Jersey were just a tiny bit quicker it could have passed first.
Since the time, Delaware, Pennsylvania, and Michigan have been regulated and have approved legal legislation for online poker.
Supreme Court of 2018 Paves Way to Sports Betting, and more
In this case, New Jersey was the one to take the lead. In 2017, the State of New Jersey argued the case “Murphy in v. National Collegiate Athletic Association No. 16-476 584 U.S.’ in front of the U.S. Supreme Court. The purpose was to repeal the Professional and Amateur Sports Protection Act (PASPA) that prohibited states from allowing betting on sports.
It was a crushing victory that was a huge victory for New Jersey as the state was ruled 7-2 in the state, and the court ruled 6-3 in favor of New Jersey that PASPA violated the Constitution. The decision was handed down on May 14, 2018.
Since then, many states have legalized online sports betting. This is a significant step towards legal online poker as numerous state legislatures are considering the issue of online gaming and looking at what it could do for their states.
Latest Legal Online Poker News
Following the court’s 2018 ruling and the coronavirus pandemic of 2020 that is destroying state budgets across the country states are more likely to adopt laws that could help boost revenues. This was the case in Connecticut which approved online poker and gaming legislation on May 27, 2021.
Governor. Greg Lamont signed the legislation into law, and the state is working to establish the online infrastructure that will allow not only online poker but also sports betting and gaming too. One important aspect of the bill is that the law was negotiated and passed with the help of the casinos owned by the tribes of the state. Mohegan Sun and Mashantucket Pequot’s Foxwoods have long been among the leading gambling advocates within the state.
Tribal casinos across other states have also pushed back against the regulation of online gaming however, Connecticut could be now the state with a model. Keep an eye out for further information on the regulation of online poker here.
It’s crucial to understand that no site – regardless of how thorough or well-informed – is an adequate substitute for the advice of an attorney licensed by the state. Our sole purpose is to help you as a player, a greater understanding of the basic rules of the laws governing gambling in the state you reside in.
Below, we’ve compiled an overview of all 50 states. Click on any of them to be taken to a thorough analysis of that state’s history as well as its attitude towards and laws that pertain to the game of poker.