The Battle to Get Online Poker Legalized in the United States

Online poker has existed for some time. However, it has seen enormous changes over the course of its existence. For instance, the first form of online poker sprung up in the late 1990s, played over a chat protocol called IRC. The earliest forms of IRC poker needed players to send in textual commands, but it wasn’t too long before interested parties created more graphics-intensive user interfaces that used the point and click system. However, it wasn’t until Planet Poker was launched in 1998 that the world saw the first games of online poker that involved real money.

How Was Online Poker Treated By Lawmakers and the Law?

Perhaps unsurprisingly, this form of online poker proved to be very popular. However, Planet Poker had serious issues such as a lack of features and a lack of responsiveness, which weren’t helped by its reliance on a third-party software supplier that had other concerns in mind. Due to this, Planet Poker was soon overtaken by a new service called Paradise Poker that launched in 1999, thus kicking off a period of fierce competition in the early 2000s as more and more parties saw potential in the exploding market.

As online poker became more and more prominent in the eyes of the public, law-makers in the United States and elsewhere became more and more aware of its existence. As a result, the House of Representatives in the state of North Dakota passed legislation in February of 2005 that would legalize online poker so long as online poker service providers would relocate their operations to said state. However, this effort fell through because of the State Senate, which rejected it when the U.S. Department of Justice sent a memo stating its opinion that online gambling might have been illegal under federal law. There was a fair amount of argument over the issue at the time, but in the end, the State Senate backed down, meaning that the legalization of online poker in the state of North Dakota did not come to pass.

Regardless, it was clear that lawmakers had taken an interest in online poker. Soon enough, President George W. Bush signed the SAFE Port Act, which was intended to make U.S. ports more secure from potential threats. However, the SAFE Port Act contained a provision called the Unlawful Internet Gambling Enforcement Act of 2006, which banned the making, the sending, and the reception of online wagers in states in which said actions would’ve been illegal. As a result, a number of online poker service providers shut down their operations in the United States, while others continued on.

By this time, the stake were high, meaning that there was plenty of opposition to the new provision. For example, the nonprofit interest group called the Poker Players Alliance received a sizable boost. Likewise, other nonprofits sprung into existence for the purpose of fighting for the right of interested individuals to gamble online so long as the proper safeguards have been put into place. As a result, there has been a fair amount of fighting on this issue in the United States on the federal level, with the most famous example being the crackdown that happened in April of 2011.

In short, the U.S. federal government brought a case against the founders of the three biggest online poker service providers as well as some of their associates claiming that they had violated the Unlawful Internet Gambling Enforcement Act of 2006, thus resulting in what has become known in the world of online poker as Black Friday. As a result, 11 people were indicted, 5 URLs were seized, and more than 70 bank accounts were frozen. In the end, some of the defendants were convicted of various charges, while civil complaints were dismissed against two of the three online poker service providers in exchange for a deal that was made.

What Is the Current Legal Status of Online Poker in the United States?

Ever since then, online poker has had a rather murky legal status in the United States as a whole because of imprecise language in the relevant pieces of legislation. As a result, some online poker service providers have withdrawn their services out of concern, whereas others have stayed in because of what is presumably a higher risk tolerance on their part. With that said, its legal status is much clearer in some of the states where law-makers have come down on the issue on one side or the other.

For instance, playing online poker for money is illegal in the state of Washington, where a law on the issue was passed in 2006 and then upheld as constitutional by the state’s Supreme Court in 2010. As a result, unless residents of the state of Washington want to become a felon, they really shouldn’t be playing online poker for money, assuming that online poker service providers will even let them. In contrast, the states of Delaware, Nevada, and New Jersey have specifically legalized online gambling, though each one has its own particular rules on the matter. For example, Delaware has a 100 percent tax on the first $3.75 million in online gambling revenue, which has slowed down the entry of interested parties. Meanwhile, New Jersey lets online poker service providers operate in the state so long as they have a relationship with a physical casino in the state, which is on top of a higher tax rate for online gambling revenues compared to offline gambling revenues.

This process will be handled by licensed third-party companies that will use the latest identification and geo-location technology to insure you are who you say you are, and that you are currently within New Jersey borders.  New Jersey will use Know Your Customer checks to determine a person’s physical address, and then through a combination of IP verification and geo-location tracking they can determine a person’s current location.

A Know Your Customer check — also known by the acronym KYC check — is a way of checking a player’s identity, age and location through the use of public databases and other identity verification methods such as credit reporting agencies.

Individuals can put themselves on the self-exclusion list, which would prohibit them from gambling on New Jersey gambling sites. This can be done via the Division of Gaming Enforcement’s page (http://www.nj.gov/oag/ge/selfexclusion.html).

Of course, it should be mentioned that while Black Friday has had a chilling effect on online poker in the United States, there are still plenty of online poker players, online poker service providers, and other interested parties working to make the practice specifically legal in the country. One excellent example is 888 poker, which closed its US operations following the passage of the Unlawful Internet Gambling Enforcement Act of 2006 but has since become involved in the states of Delaware, Nevada, and New Jersey following the legalization of online poker therein.  In fact 888 poker has, in addition to its gaming platform, become a solid resource for understanding the game as well as providing tips and info about the industry.

This is unsurprising because while online poker might have taken a serious blow in the United States because of past events, there are huge potential profits should be the legal uncertainties be eliminated, meaning that there is much incentive for the relevant parties to get involved in the matter.


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