Federal Online Poker Laws US 2017

Legal Poker US

It's fair to say that American online poker players have been through it all over recent years.

First came the advent of online poker, the Internet boom and the "Moneymaker Effect" that followed after, before Congress put it all asunder with the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.

In April 2011, the Department of Justice (DoJ) made raids on sites they felt were breaking the law (AKA Black Friday), before dramatically making a U-turn and declaring online poker DIDN'T contradict any current law in December of that same year.

So, in 2017 we have arrived at a stage where some states have legalized and regulated online poker, others have outlawed it entirely, and some continue sitting on a rather large fence waiting to see how the dust settles.

What Federal Laws Are Currently In Place?

To understand federal poker law in the United States, you have to look first at the 1961 Federal Wire Act.

Originally designed to outlaw the taking of bets across state lines by bookmakers by wire (think of it as the precursor to online gambling), the Wire Act is key to understanding how the US has changed its stance on the legality of playing poker online.

Despite the Federal Court of Appeals ruling against the application of the Wire Act to online poker, the DoJ persisted, which culminated with the Black Friday raids of April 15, 2011.

Black Friday and UIGEA

The Black Friday raids targeted the websites, CEOs and payment processors of the major global poker sites - PokerStars, Full Tilt and Absolute/UB - on charges of money laundering and fraud. Players' funds were seized, and while some were paid back fairly quickly, others had their funds held back for years, and only now are some of those American online players beginning to receive their cash at long last.

But the Black Friday raids wouldn't have come without UIGEA being in place.

UIGEA was created in 2006 as a last-minute, unrelated addition to the SAFE Ports Act, which sought to limit foreign ownership of key US ports. Unsurprisingly, therefore, and despite condemnation from the World Trade Organization - which said UIGEA was illegal - the Act was signed into the statute books.

UIGEA made the processing of payments to Internet gaming sites illegal (not the actual playing of poker online), and although it subsequently became more difficult for US players to play on the web for real money, many persisted, and some poker sites decided to defy the new law and continue processing funds, some via slightly nefarious means.

What US States Have Legalized Online Poker?

Later in the same year of the Black Friday raids, the DoJ relaxed their stance on the outdated Wire Act and decided that the law DIDN'T apply to online poker afterall.

With those constraints gone, it opened the doors for many global poker sites to return to the US - particularly those that had decided to pack up their websites and leave the US after UIGEA.

What it also allowed was for states keen on online poker legislation to move on with new online poker laws of their own.

Nevada and New Jersey Push Ahead

Nevada – to no one's surprise at the forefront of the online poker movement - wasted no opportunity to get online, passing legislation in 2013 to be the USA's first state to provide its residents and visitors within state borders access to fully regulated poker on the net.

New Jersey Governor Chris Christie was next to formally legalize Internet gaming in the Garden State, and the home of Atlantic City's land gaming casinos opened up legit online gambling sites in the Fall of 2013. However, in NJ, online blackjack and roulette is also available to state residents and visitors, as well as poker.

Interestingly, in New Jersey, regulated poker and gaming sites are alliances between existing gaming websites - specifically ones that LEFT the US post-UIGEA - and land-based casino chains. As of March 2017, some of the sites that continued to take US money in defiance of the UIGEA processing laws have been frozen out.

Completing the “holy trinity” of first regulated USA states is Delaware, which formalized its own pro-Internet gambling laws in 2013. Nevada and Delaware have since formed the first interstate gambling compact, allowing each state to share player pools from the other.

Which States Are Likely To Regulate Next?

In a recent report by GamblingCompliance.com, up to 10 US states are poised to push ahead with regulated online poker - or expand existing legislation if they already have it. Of those, an expansion of operations by New Jersey and Nevada seem the most likely moves in 2017.

Also high on that list is California, which has a history of solid land-based cardrooms and powerful from tribal casinos. Some say the Golden State will pass some form of regulated online poker soon, and California has two online bills on the table in 2017.

Elsewhere, Pennsylvania – with a history of solid live poker establishments - could well go online, too, but as always, anti-gaming lawmakers are lurking in the shadows at every turn.

What States Will NEVER Legalize Online Poker?

Washington State made online poker a Class C felony, so it's unlikely that the Evergreen State will pass any legislation in the foreseeable future.

Elsewhere, Montana still has in place a 2005 law outlawing online poker, but with a history of lottery and tribal casinos, the Treasure State could surprise some. After all, who would have expected the Wire Act to be reinterpreted once again so soon after Black Friday?

Are Any Federal Laws Likely In the Coming Years?

With election year looming in the USA, it's unlikely any federal laws on online poker will be passed any time soon.

There have been many attempts, of course - notably from Sen. Harry Reid (D-NV) and Sen. Jon Kyl (R-AZ) - to push through natonwide poker legislation - but so far, none have prevailed.

One figure who could prove key to the future of legalized online poker in the US is casino mogul Sheldon Adelson, CEO of Las Vegas Sands Corporation.

The New Anti-Gambling Crusaders

Adelson is keen to protect his huge land-based casino assets in Las Vegas and is therefore busy sponsoring various bills outlawing online gaming on a federal level. The billionaire has formed CSIG (the Coalition to Stop Internet Gambling) in response to pro-gaming moves on the web.

Meanwhile, South Carolina Senator Lindsey Graham - hardly the most pro-gambling state in the Union - has introduced the Internet Gambling Control Act of 2017, which proposes an outright ban on all forms of Internet gaming in America. Not only that, the proposed bill would pressure newly regulated states to reverse current legislation. Adelson is the main force behind the IGCA being pushed through.

In the other corner is the Coalition for Consumer and Online Protection (C4COP) with support from the PPA (Poker Players Alliance) and American Gaming Association (AGA), which are lobbying hard for federal legislation governing poker online in the US.

What is the Future of Online Poker in the US?

While a federal bill is highly unlikely - particularly in the run-up to a US presidential election - we could see more states push on with regulation of their own in 2014 and 2015.

Meanwhile, states like Nevada and Delaware are already buddying up to form interstate Internet player pool agreements. This should form the blueprint for inter-state deals should anything federal fail to materialize long-term.