Understanding Online Poker Laws in the US

It’s not surprising that many people find themselves confused over igaming laws in the US – particularly those relating to online poker. Having evolved over a complex history, and differing from state to state, the legality of online poker is far from clear-cut. New bills are undergoing discussion in California and Pennsylvania which could further change policies regarding igaming and its legal status. This guide will give you a brief background into online poker’s history, its current status and its likely future in the US. 

What is ‘igaming’?

Igaming, also known as ‘online gambling’, is a general term to describe any placement of bets or wagers online. Typically this has involved online sports betting, bingo, lotto, casino games and – most notably – online poker. Recent years have seen both esports (competitive video gaming) and fantasy football become considered forms of online gambling too. Overall, there are numerous different ways that people can bet online – and different laws apply to these different methods. Online poker rooms have constituted the most prominent and lucrative sector in igaming’s history – and have also undergone the most controversial legal history.

A brief history of online poker

Online poker has existed since 1998 when the first real money poker room was launched. It wasn’t until 2003 that the so-called ‘poker boom’ really took off though. This is partly due to amateur player Chris Moneymaker winning over $2.5 million after qualifying for the WSOP thanks to a PokerStars satellite event. By 2005, online poker was a multi-billion dollar industry, yet the Bush administration introduced the Unlawful Internet Gambling Enforcement Act which forbid almost all types of online gambling.

Despite the law, many of the biggest online poker rooms continued to operate in the US – including the then giants Full Tilt, PokerStars and Cereus. They argued gambling did not apply to online poker – as poker was a game of skill more so than of luck. As such, they continued to violate the law until they were eventually taken to court in the United States vsScheinberg case. On the 15th of April 2012, the founders of these poker brands were accused of bank fraud, money laundering and violation of anti-online gambling laws. Their sites were shut down and their assets, including bank accounts in other countries, were frozen. The day became known as ‘Black Friday’, with the three aforementioned poker brands expelled from the US as a result.

The aftermath

Since the blow of Black Friday, regulated online poker has been legalized in only three states; Delaware, New Jersey and Nevada. PokerStars, however, are barred from operating even in these states. Despite heavy restrictions surrounding online poker, it is estimated that around 60 million people continue to play real money poker online on a regular basis in the US. Penalties for players are usually mild, whereas illegal operators can face jail time.

Ongoing debate

As of now, bills to reintroduce online poker in the US are being debated in California and Pennsylvania, where lawmakers are pushing for a declassification of poker so that the game can be considered one of skill, subsequently allowing the government to legalize, regulate and capitalize on online poker rooms. Despite the multiple stalls over the past few years, many online poker players are optimistic that the game will be legalized in the near future. California is predicted to be especially significant to the legal history of online poker, as lifting the ban on online poker in California could influence other states to follow suit (no pun intended).

Predictions for the near future

The internet has made available tons of information about poker odds calculation and strategy. As such, today’s average poker player is more well-informed and skilled than the average poker player thirty years ago. The focus on psychology and strategy, as well as the many players who consistently do well in the game, has become evidence of how poker is as much about talent as it is about luck. When poker can be redefined as a game rather than gambling activity, legislators will have an easier time excluding it from any anti-gambling laws that might have otherwise applied. Lawmakers are also considering the fact that legalizing online poker would generate business. As such, it seems inevitable that online poker will be legalized in the very near future.

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Christopher Washington

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