All in: The Legality of Online Poker Explained Simply
The cards may be in your favor, but the laws are not.
Thousands of players make money off of online poker, but most of those players live outside of the United States. Since 2006, online poker has been essentially criminalized on the federal level, but there are ways for you to keep playing.
Here is a brief history of online poker in the United States and how you can play it today.
The Early History of Online Poker
Online poker began in the United States with Planet Poker in 1998. Interest in online poker was minimal until 2003, when Chris Moneymaker won an $86 satellite tournament on PokerStars, giving him a free entry to the World Series of Poker Main Event. He won the event, igniting the poker boom and fueling interest in online poker.
Across the mid-2000s, millions of people played online poker, creating a multibillion-dollar industry. In October 2006, however, Congress passed the Unlawful Internet Gambling Enforcement Act, prohibiting gambling businesses from accepting payments for online poker. Though online poker was technically legal, most companies left the United States, and interest in the game diminished.
In April 2011, the federal government filed a lawsuit against three poker companies, PokerStars, Full Tilt, and Absolute Poker, alleging they engaged in fraud, money laundering, and Ponzi scheming. Their websites were shut down, and players' accounts were frozen. Though the lawsuit was dismissed in July 2012, many American players retired or moved outside of the United States.
The Legality of Poker Today
Though reforms to the UIGEA have been proposed in Congress, none have made headway. As such, state governments have legalized online poker within their jurisdictions.
Over the last seven years, Nevada, New Jersey, Delaware, Pennsylvania, and West Virginia have legalized online poker. Michigan is poised to legalize online poker soon, and online poker companies have announced plans to operate in other states.
If you are a resident of any state that has legalized online poker, you can play it and receive money. Delaware, Nevada, and New Jersey have agreed to the Multi-State Internet Gambling Agreement, pooling their player bases together and allowing residents of each state to play against residents of the others. If you live outside of the Agreement, you will be playing poker with players from your state only.
What if You Live Elsewhere?
If you live in states that have not legalized online poker, you have limited options.
You can use an online sportsbook, place wagers, and play online poker for play money. You can play using online casinos based outside of the United States, and international banks can process your money. You can travel to states that have legalized online poker and play and make money there.
However, you cannot gamble on a website based in the United States. Transferring funds to online casinos is illegal, as is accepting advertising from online casinos. Indiana and Washington have criminalized online poker, so do not make any attempts to play online poker for money in those states.
Online poker has had a long and interesting history in the United States. In ten years, it went from an obscure game to a cottage industry to an illicit activity.
Efforts to legalize online poker on state and federal levels are ongoing and ever-evolving. Keep up with any developments through our blog, and be sure to check out our other posts.