Is online poker legal or not in the United States ?

Question

I am just starting to learn Texas holdem, and I've heard that online poker is not legal, and also that it is. Which is it?

Answer 1

Please, before you continue reading and make any decisions based on what I'm about to tell you, you must understand two important things:

1. I'm not a lawyer. I can't even say that I dabble in law. I'm not an expert on these matters, and many people who are expert disagree with one another. As simple as your question may seem, it is not easy to answer.

2. Everything I'm about to say applies to the United States only.

I've heard that online poker is not legal, and also that it is. Which is it?

Unfortunately, it seems to be both in the United States.

Bottom line:

There is no Federal law that makes playing poker online illegal.

There is, however, a Federal law (UIGEA) that makes some financial transactions to and from an online poker site illegal -- this law applies to the site itself, not the players. If there are any laws against playing online poker (as is the case in some states) and you add money to an online poker site, or withdraw money from an online poker site and use a US bank to do it, the poker site has broken this federal law by facilitating this transaction. To get around this problem, these foreign poker sites use 3rd party processors and non-US banks to issue checks. Also, since 2015, all of the major sites have begun accepting crypto-currencies as these appear to be treated differently than USD in a legal sense, as well as offer a way to bypass the US banking system.

Each state in the union has different laws regarding the legal status of gambling activities. So, even though it might not be against Federal law to play online poker, it might be illegal in a particular state. Do some research.

The Federal Wire Act of 1961 is often cited as a law that makes online poker illegal. However, this too applied to the sites and not the players. Moreover, the DoJ in 2011 released a formal legal opinion that the Wire Act applies only to sports betting. The US Circuit Court of Appeals issues a similar ruling.

EDIT - UPDATED 2017:

I think still more needs to be said here.

Although there is no Federal law that says "playing poker on the Internet for real money is a Federal crime," the legal environment is still a gray area. Many jurisdictions within the USA have no laws against online poker, but no laws supporting or regulating it either.

The DoJ shut down 3 major online poker sites (PokerStars, FullTilt Poker & Cereus) and seized all the money held by the players there. After some time, one of those sites, PokerStars, was able to settle with the US DoJ for $700 million. This was a combination deal where in PokerStars paid off all of their own players as well as the players from Full Tilt Poker which it was found to have been using player funds for operational purposes and was thus insolvent. The funds were returned to players via the Full Tilt Poker Claims website. Not all players claimed funds however, and the remainder of funds were used to settle player debts from Cereus Network (Absolute Poker and Ultimate Bet), which were also found to be operating on player funds/insolvent.

Full Tilt was eventually purchased and integrated into PokerStars and Cereus Network went out of business completely. PokerStars has since re-entered the USA, via the regulated market of New Jersey, where it operates PokerStarsNJ, along side other regulated operators like Borgata, Party Poker, and 888 - see full list of regulated NJ sites at the NJ Division of Gaming Enforcement. Even after their success in getting a toehold in New Jersey however, PS has yet to succeed in their attempt to get a Nevada gaming license due to "bad actor" clauses and active intervention by other gambling trade groups.

In 2012, the Department of Homeland Security shut down another poker network (Everleaf Gaming). Yet very few people, even executives of purported illegal gambling operations have ever faced much legal backlash. For example, Calvin Ayre, the founder of the Bodog gambling brands was once wanted on the FBI's top 10 list. Yet after over 5 years hiding out in Antigua, all of his felony counts were dropped, he pleaded guilty to a single misdemeanor, and was only fined $300,000 USD. This was the founder of a billion dollar business and just goes to show that there is not much political will to stick it to gambling companies, much less individual players.

Any American who chooses to play poker online for money is taking a risk with that money. However given the recent legal changes, i.e. the DoJ changing stances on the Wire Act of 1961, Federal judges ruling that poker is not gambling but a game of skill, Kentucky State losing a court case of seized domain names of many gaming sites, Black Friday players being reimbursed and sanctioned by the US DoJ and a slew of other pro-poker decisions, most people firmly believe that the risk is greatly reduced circa 2017.

It is worth noting that the States of Delaware, New Jersey, and Nevada, all of which have regulated online poker and various forms of online gambling, have seen no intervention whatsoever from the US Federal Government. Some would say that you might conclude from this that the Federal government is of the opinion that playing online poker for real money is itself an issue of State's Rights. Even though there is nothing black-and-white that says that actually playing is illegal, the Federal government has appeared in recent years to be breaking down the hurdles for state sanctioned Internet gambling making it possible for Americans to play poker online for real money if their state agrees to regulate it and/or if they are willing to take their chances at offshore online poker sites.

Answer 2

I am not a lawyer. What follows is my understanding of the facts, having been involved in the online poker industry since 2004:

Summary: With the exception of a few states, no law is on the books to make online poker illegal. This means that it is legal in most areas of the United States.

In the United States, our legal system operates on the concept of citizens being free to do anything that is not prohibited by a law. To date, there has been no law which makes online poker illegal at the federal level. Thus it defaults to being legal.

For a time, some members of the government sought to interpret the 1961 Wire Tap Act (which has a clause that makes it a crime to place sports-betting wagers over state lines via interstate telephone line) as also outlawing any form of gambling over the internet. Courts have since found this interpretation to be inaccurate, and the US Department of Justice officially declared in late 2011 that they do not find online poker to violate this law.

In 2006, an often-misunderstood law was passed called the Unlawful Internet Gambling Enforcement Act (UIGEA). This law set in place many large penalties for facilitating financial transactions for "illegal online gambling" however the law fails to define what illegal online gambling consists of. That means that it falls to other laws to define what is or is not legal. And again, there are no federal laws that prohibit online poker play, so it defaults to legal. The authors of the UIGEA surely believed that they were including online poker in the scope, under the mistaken assumption that other laws made online poker a crime. It is likely that they thought the Wire Tap Act applied here. The one thing that this law did, however, was put banks on notice that if they processed a gambling transaction which was not legal, they could face serious penalties. Most chose to prohibit all online gambling transactions to avoid this risk entirely.

There are state laws that criminalize online poker. In the state of Washington, for instance, it is a felony to play online poker. Since there is no law at the federal level, the state law makes the ruling. By contrast, several states are at various states of progress to explicitly declare it to be legal to play online poker and to adopt a licensing plan in order to tax poker sites which operate in their borders. Nevada is at the lead of this, as they passed a law to this effect in December 2011. As of February 2012, a half dozen casinos already have applications in to the Nevada Gaming Commission to become licensed online poker rooms. Nevada citizens are expected to have fully legal and licensed intrastate online poker (as in only within Nevada, since Nevada can't pass laws that apply to other states) by the end of 2012.

Many think that the legal situation faced by Pokerstars, Full Tilt Poker, and Cereus is an indication of the game being considered illegal. This is not true. Each of these sites were involved in criminal practices of money laundering and/or fraud. They set up shell companies so that banks did not know they were authorizing transactions for online gambling (as the bank would see the transaction as, for instance, a jewelry purchase). Others set up backroom deals with banks to process payments for states like Washington and Utah, where laws were in place to prohibit online poker at the state level. Money laundering and fraud are criminal offenses, and the sites were prosecuted under these laws.

Some think that the fact that only US players on Pokerstars have received funds back from the money they had in their account is evidence that the US Government is holding the funds. This too is largely untrue. I do not know the full details of the Cereus network, as I did not have money there, and they have stayed out of the spotlight since Full Tilt made a great target for it. Full Tilt players have not received funds because Full Tilt violated terms of their license by combining business funds and player funds, and then using this combined pool of funds to pay bonuses to their executives and professional poker players. The players have not received funds because, quite simply, the site does not have the money.

In mid-February 2012, the Everleaf gaming network ceased operations in the US. This has been cited as further indication that the law is murky. It has not yet come to light what exactly is behind this change, but there are two things that have been made clear:

1. Everleaf funds were properly segregated, so players will get their money back eventually.

2. The process Everleaf followed for cashouts/withdrawals lead to major delays (multiple months) for many US players who sought to withdraw their funds even while the site was still fully operational in the US.

My guess is that there was something fishy going on here, but I do not yet have enough information to state that definitively. The article linked from John Dibb's answer mentions an undercover officer in Washington State, which indicates that Everleaf was offering play to states where it was illegal AND that they were violating the UIGEA by processing transactions from an area where play was illegal.

Answer 3

Depends on specified country jurisdiction.

Answer 4

Here is the question you should really ask yourself...

Is it really worth playing online poker now?

The problem with the questionable legality and the difficulty in setting up accounts and putting funds on accounts, is that your common average poker player isn't going to jump through those hoops.

Professionals and the better smarter players are going to though.

It is just not a great environment to try to play online. IF online poker does become completely legal, it might be a golden time as schools of fish flock to online poker to be fleeced.

But for now, I would avoid it.

Answer 5

Poker is considered gambling and illegal everywhere in the united states at the state level. This does not mean that it is not allowed, it means that for you to play poker in any particular state in a legal manner, you must play at a licensed establishment, or you are going to be subject to arrest. This is true in Nevada and all other states. Gambling is not legal, it is licensed.

The willingness of any state to license gambling in any venue, including online is in a constant state of flux. Any answer today is very likely to be a wrong answer tomorrow. It is subject to change if you can live in one state and play at a site in another state or country. That all just depends on a huge number of factors. So if you really want to play online, do some very basic research, to see if you can with out a legal risk.

Answer 6

poker is a game of skill and a tradition of the old west.

there are many poker rooms in california. we have the largest in the world: http://www.commercecasino.com/

look here: http://www.legaluspokersites.com/ and here: http://www.cardschat.com/states/ and here: http://en.wikipedia.org/wiki/Online_poker

i live in california and am playing for real money at 3 online casinos.

some states have laws against it.

thanks

Answer 7

Some people on here mention state and federal laws and jurisdiction, however, everyone knows you can gable in Nevada and no feds are gonna come busting up the casino.

I figured I would post here as the last post with good information was from a couple years ago.

In Nevada, and possibly some parts of New Jersey, you can play online poker legally if you are a resident of the state and provide a valid address and social security number. Even Pokerstars will let you play if you have that information.

The thinking is, and I'm not a lawyer, but if you can go down the street and gamble at a casino in the town you live in, why can't you stay at home and gamble online.

If you don't live in a "legal" gambling area, such as Nevada, you are taking your chances with online sites. Most of them must use international banks as the US Government will not allow US Banks to process transactions from gambling sites.

I know for a fact you can go on certain sites that were very popular during the early 2000's prior to the legislation that was passed, that you can get certain debit cards that are approved for international transactions (or can be by calling the card company) and then you can buy in.

Getting your money out is the hard part. You can't have it transferred to a US Bank and you can't cash their check at a US Bank. So you will have to pay close attention to withdrawal methods, unless you just plan on playing for fun and never cashing out.

Since a lot of online operations are in a gray area legally, I have heard many stories of people getting ripped off. I myself lost about $3600 USD when Bodog got hit with legislation and forced to discontinue US operations. Though, that wasn't the same as a site that will never cash you out, or make cashing out virtually impossible.

Personally, I just gamble at live games, as for some reason Poker is legal in California at casinos. However, we are not legally allowed to play for money online in California. It doesn't make a whole lot of sense, but beuracracy moves slowly and this whole online poker craze really only started about 10 years ago. Which is the blink of an eye to our governments legislative process. Give it ten more years, and if we aren't dead yet, maybe we can legally play a game we enjoy that harms no one in this free country of ours.