Is Online Poker Legal or Illegal in the United States?
Laws on Internet Poker Legality in the US
We would like to preface this discussion of online poker legality with a simple statement admitting we do not know 100% whether online poker or Internet gambling is illegal in the US. We are not lawyers or United States congresspersons. We simply provide information for the public to read and to interpret for their own decision making. It is the reader’s responsibility to determine whether Internet poker is illegal where they reside.
Online Poker Ban – UIGEA
There is still a lot of confusion in regards to whether online poker is legal in the United States. While the UIGEA (Unlawful Internet Gambling Enforcement Act) which was passed in October of 2006 made it illegal for financial institutions to transfer funds to online poker sites and other internet gambling sites, in our opinion and many other legal professionals, it does not make it illegal for US citizens to play online poker. It makes it illegal for US financial institutions to fund illegal online gambling accounts, that have already been deemed to be illegal.
Professional lawyer Chuck Humphrey agrees:
“Section 5363 does not make it illegal for a mere player to make bets or wagers. Rather, the Act applies only to those involved in the business of betting or wagering. The new law, therefore, only applies to online gambling operators who violate other existing state or federal anti-gambling laws.”
1961 Wire Act
The UIGEA is not the first such law to be passed regarding gambling, however. The 1961 Wire Act stated:
“Whoever being engaged in the business of betting or wagering knowingly using a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest…”
Despite dating back more than four decades ago, the Department of Justice interpreted the 1961 Wire Act as applying to all forms of gambling online in a letter written to the Nevada Gaming Control Board. However the U.S. Fifth Circuit Court of Appeals ruled that the Wire Act applied solely to sports betting.
Professional lawyer Chuck Humphrey also interprets the Wire Act to exclude online poker:
“the Wire Act seems to support the position that casual bettors would fall outside of the prosecutorial reach of the statute. During the House of Representatives debate on the bill, Congressman Emanuel Celler, Chairman of the House Judiciary Committee stated “[t]his bill only gets after the bookmaker, the gambler who makes it his business to take bets or to lay off bets. . . It does not go after the causal gambler who bets $2 on a race. That type of transaction is not within the purvue of the statute..”
Wire Act Interpretations
Regardless of the Court’s decision, the Wire act seems to remain irrelevant to online poker players in the US for several reasons:
1. The term ‘wire communication’ was used to refer to the telephone, and when the Act was passed in 1961 the internet had yet to be invented.
2. ‘Sporting event or contest’ refers to professional sporting events whereby the person placing the wager has no control over the outcome. While there is a form of luck involved in poker, it is fundamentally a game of skill and does not fall into the category of gambling.
3. The Wire Act does not cover other types of casino betting, a federal appeals court in New Orleans has ruled, which does leave some doubt whether prosecutors can shut down Internet poker and other casino games.
4. Indictments for illegal online gambling have focused primarily on online sportsbook operators. To date, there have been no arrests on Internet poker players for playing poker online.
Is Online Poker Illegal in your State?
Currently there are considered to be no Federal laws which prohibit US citizens from playing poker online, but certain States have implemented laws to prohibiting gambling over the internet. The only state where it appears to be 100% certain that online poker is illegal is the State of Washington.
- New Jersey
- New York
- South Dakota
Questions about Internet Poker Legality:
1. If online poker is not illegal in the US why did Party Poker and other sites stop accepting US players?
When the UIGEA was passed, PartyGaming which owns Party Poker suffered a 60% drop in share value. While online poker is not illegal in the US as of now, the future remains uncertain and in a bid to protect themselves and their shareholders many online poker sites preferred to distance themselves from possible legal action in the future.
2. Is there any chance of being prosecuted for playing online poker?
Since the opening of the first online casino over two decades ago there has not been a single person prosecuted for placing a wager online. With the Court’s ruling that the Wire Act can not be applied to online poker site operators nor individuals, and the UIGEA only applying to financial institutions, in our opinion and many legal professionals, there is currently no federal stature under which you could be prosecuted for playing online poker.
3. How does the uncertainty over the legality of online poker affect me from a fiscal perspective?
Until a clear federal law is passed making online poker illegal, your online poker winnings continue to be taxable income, and your losses deductible.
Additional Legal Resources for Online Poker Players and US Internet Gambling Law
- Analysis of the Internet Gambling Prohibition Act by Cardplayer
- Legal Landscape of Online Gambling has not changed by Cardplayer
- Analysis of the UIGEA by professor Nelson Rose
- Text of the bill