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What Is The Legal Status Of Online Poker In The USA?

February 11th, 2010 Author:

What Is The Legal Status Of Online Poker In The USA?The UIGEA bill of 2006 basically prohibits the transfer of funds from a financial institution to an Internet gambling site. As the bill passes fully into law this June, the Justice Department’s (DOJ) fight against all online poker sites, which they deem illegal, will receive a further boost as they attempt to dry up the money supply to these poker operations.

Despite being deemed illegal, in the States 2.5 million people wager $30 billion on online poker sites every year, with online poker giants PokerStars and Full Tilt Poker taking around 70% or $1 billion, of the US poker industry’s revenue. 

PartyGaming was the world biggest online gambling business up to 2006, helped not least by its dominant hold on the online U.S. poker market, but ceased operations after the company was held to be violating U.S. criminal laws, eventually agreeing to forfeit $105 million for their illegal gambling activities.

However, it still begs the question how these other companies, such as PokerStars and Full Tilt Poker, were so easily able to slip into PartyGamings shoes and take over the US online poker market.

One explanation proposed by Frank Catania, an ex-New Jersey Gaming Enforcement operative is that “the federal government is not going to take any action against them because they would stand a chance of losing it.”

In other words, unclear wording in The Wire Act of 1961 and the Illegal Gambling Business Act casts doubt on where exactly poker fits into the whole gambling issue and whether it is a game of skill or chance. Also, US poker has found a champion in Representative Barney Frank, who is pulling out all the stops to try and make the game a respectable, legal and taxed industry.

In the meantime, “there is a guerrilla war going on,” said Ian Imrich, a lawyer for Full Tilt Poker gurus Howard Lederer and Chris Ferguson, and the US Justice department continues to fight with all means at its disposal. For instance, in 2008 the DOJ  seized $24 million from Bodog poker, and in 2009 $34 million worth of Full Tilt and PokerStars funds were frozen, that were intended as online poker player cash outs from payment processors, such as Account Services.

In all the above instances the poker rooms footed the bill and reimbursed their online poker customers, but when payment processors, Douglas Rennick of Canada tried to argue the legitimacy of the seizure, he was charged with bank fraud, money laundering, and illegal gambling and hasn’t been back to the US since.

One thing is for sure, while their still remains so much confusiuon regarding the industry in the US, the battle for online poker in the States will continue to rage.

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2 Comments  
Comments
25th April 2011
Maria Gifford

I am ashamed of our USA slogan”Land of The Free” …We are not free and really unhappy about it. Embarring situation. The Gov just can’t stand not having a piece of the pie. Really makes me want to punch them in the Balls.

15th February 2012
Lou Thibault

I’d be willing to join a class action lawsuit against the U.S. Government to restore online poker to it’s rightful, honerable place. I hope you read this Full Tilt. Jam them!

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