Online Poker Gambling Laws in the USA

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Online poker in the United States has had a complicated history due to ambiguous and conflicting gambling laws that vary from state to state. Here is an overview of the key developments and current legal status of online poker gambling across the US.

The Early Years of Online Poker (1998-2006)

  • Online poker first started gaining popularity in the late 1990s with sites like Planet Poker and Paradise Poker. At this time, there were no specific laws prohibiting online gambling at the federal or state level.
  • Many sites operated freely accepting players from the US. The market continued growing rapidly early 2000s with major sites like Party Poker and PokerStars entering the fray.

The UIGEA and Black Friday (2006-2011)

  • In 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed. While not directly outlawing online gambling, it prohibited the transfer of funds from financial institutions to online gambling sites.
  • Many sites exited the US market after the UIGEA passage. Some continued serving US players illegally leading up to “Black Friday” on April 15, 2011.
  • On Black Friday, the operators of PokerStars, Full Tilt Poker and Absolute Poker were indicted for bank fraud and money laundering. The sites were forced to stop serving US players.

State-Level Legalization and Regulation (2011-Present)

In the years since Black Friday, a few states have legalized and regulated online poker and casino games within their state borders:

Nevada

  • Nevada legalized online poker in 2013, passing Assembly Bill 114 to allow for state-wide interactive gaming licenses.
  • WSOP.com launched later that year in partnership with 888 Holdings, followed by Real Gaming owned by the South Point Casino.
  • Players can only play online poker against other players located in Nevada. Liquidity remains relatively low due to the small player pool.

New Jersey

  • New Jersey regulated online gambling games including poker in 2013 as well.Their law allows state residents to play on NJ regulated sites hosted by Atlantic City casinos.
  • Major networks include PokerStars NJ, WSOP NJ, BetMGM Poker NJ and partypoker NJ. New Jersey frequently leads the US in the amount wagered for online poker.

Delaware

  • Delaware legalized online gambling in 2012 with multiple poker sites launching in 2013. However, after poor revenue performance, all poker rooms eventually closed by 2017.
  • Only online casinos remain active in Delaware which has a small population to support online poker.

Pennsylvania

  • In late 2017, Pennsylvania passed legislation allowing for online gambling games including poker with regulations taking effect in 2018.
  • PokerStars PA and BetMGM Poker PA launched their online poker rooms in late 2019. WSOP PA also offers online poker on the Caesars branded site.

Multi-State Compacts

In 2018, New Jersey agreed to allow its licensees to share online poker liquidity with Nevada and Delaware’s player pools. This agreement went live in 2020. While liquidity has improved, Delaware does not currently have any active online poker sites.

Attempts at Federal Regulation

While individual states have chosen to regulate online poker, there have also been several attempts to regulate online gambling at the federal level:

Repeated Attempts at Poker-Only Regulation

The Poker Players Alliance (PPA) has lobbied to explicitly legalize and regulate online poker separate from other forms of online gambling. Federal bills aimed at poker regulation have included:

  • Internet Gambling Regulation, Consumer Protection, and Enforcement Act (2009)
  • Internet Gambling Regulation and Tax Enforcement Act (2010)
  • Internet Poker Freedom Act (2013-2014)

None of these bills gained enough support to pass both houses of Congress and become law.

RAWA Controversies

  • In 2014-2015, Representative Jason Chaffetz introduced the Restoration of America’s Wire Act (RAWA) which sought to expand the UIGEA’s prohibition on online gambling.
  • RAWA faced stiff opposition over fears online state lotteries would also be prohibited. The bill failed to gain momentum in Congress.

Recent Federal Outlook

In recent years, there has been little movement towards federal regulation of online poker or gambling in the US. States have continued pushing ahead regulating online gambling within their borders instead.

Current State of US Online Poker in 2023

As it stands today in early 2023:

  • Online poker is explicitly legal and regulated in Nevada, New Jersey, Pennsylvania and Michigan.
  • Multi-state player pooling is allowed between New Jersey, Nevada and Delaware. Michigan has agreements pending to join this compact.
  • Several states have active legislation on the table to regulate online poker including Connecticut, California, Massachusetts among others.
  • At the federal level, there have been no serious efforts to prohibit states from regulating online gambling. However, no federal level regulation or oversight exists either.

The Future of Regulated US Online Poker

Many poker advocates remain optimistic for future growth of regulated online poker in the US due to:

  • Continued state-level efforts legalizing online poker state by state
  • The possibility remaining states join player pooling agreements
  • Technological improvements enhancing game integrity protections

However, complex issues remain including:

  • Disagreements between state and federal laws leading to confusion
  • Stalled federal efforts failing to create nationwide standards
  • Disparities of rules and available games between states

In summary – while progress towards online poker regulation in the US has been filled with legal and political obstacles over the past 25 years, the current overall trajectory continues trending in a positive direction.

More states are expected to consider opening their own regulated online poker markets in coming years. However, getting to full nationwide regulation similar to models in Europe appears it will remain an ongoing challenge at least in the short term.

 

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