Online Poker Still Illegal In Us
Did you realize that in the state of Washington it is a Class C Felony to play a hand of poker online for real money? Yes, it is a felony to place an online wager in Washington! However, looking at Penal Code Sec. 330, which states that any banking or percentage based game is illegal, you could assume that this applies to online poker. Although home games are regulated and legal (as long as there is no rake involved), as of now, there is still no regulation dealing with online poker in California.
When it comes to gambling in the United States, the federal government has no laws on the books that address the question. Indeed, the federal government has adopted a permissive stance that places responsibility for banning or expanding gambling opportunities within the jurisdiction of each individual state. That being said however, Washington D.C. has moved forward over the years with the passage of various gambling legislation that does have a dramatic impact on different aspects of the gaming public.
Typically, when legislation has been passed limiting aspects of the gambling landscape, at the federal level, the mere act of gambling has rarely been the impetus for the bill in question. Rather, the emergence of perceived threats ranging from organized crime to terroristic threats has galvanized a public response at the federal level.
Examining this patch quilt approach to federal lawmaking over the past half century, we can stitch together a larger picture of how these various pieces of legislation affects the growth of gambling opportunities in all the 50 states today.
Online Poker Still Illegal In Usa
State Laws Reviewed
Recognizing a Rising Threat: Organized Crime
The opening salvo against organized gambling in the United Sates began in the 1950s. For decades, the nation's top policeman, F.B.I. Director J. Edgar Hoover, consistently ignored and dismissed the evident signs of its existence owing to his focus on leftwing threats to the country from socialists and communist agitators.
In 1957 however, events pierced his veil of denial in such a way that Hoover was forced to focus the investigative talents of his agency on the threat. In November of that year, reputed mob boss, Joseph 'Joe the Barber' Barbara hosted a summit meeting of a hundred top Mafioso leaders in the United States, Italy, and Cuba.
On the menu for discussion was organized loan sharking, narcotics, and gambling activities and how each of the Five Families would divide up territory and the profits of the illicit activity. When local police officers noticed the parade of expensive cars arriving in the sleepy hamlet of Apalachin, New York, they became suspicious and raided the property when the meeting was in progress causing the attendees to flee into the surrounding woods.
The raid nabbed up more than sixty mobsters and destroyed the fiction that there was no organized crime in the United States. Within three years, federal legislation was passed, in the opening days of the Kennedy Administration, to fight back and disrupt the profitability of the mob's illegal gambling operation. This opening salvo, the Interstate Wire Act, passed in 1961.
The 1961 Interstate Wire Act
The intent of the legislation is illuminated in the long title of the law, which called for 'amending Chapter 50 of Title 18 of the United States Legal Code with respect to the transmission of bets, wagers, and related information.'
At the time, mafia families across the nation were generating significant income by placing bets over the telephone (the wire) to Las Vegas, which at the time proved the only legal outlet in the country to place legal sports bets. Since the bulk of sports betting tool place over the phone, it made sense for federal authorities to target the phone use that allows for their illegal activity.
As such, the goal of the law was to make the transmission of bets and related information a crime. Viewed as an arrow in the government's quiver to fight organized crime, the measure has no bearing on the legality or morality of gambling itself, nor is its intent to stop Americans from gambling. Unfortunately, it does serve to restrict access to Americans looking to place a sports bet in the United States.
The interpretation of the 51-year old legislation has not been static owing to emerging technologies, the Internet, and the wording of the law itself. Specifically, it is difficult to parse through the language to determine what wagers are allowed and which are prohibited. Additionally, when the Interstate Wire Act passed, the Internet was still decades away, so justice officials have wrestled with how to apply the act to online gambling.
Under Department of Justice review in the 2000s, the department clarified the government's position. In a 2011 review, the DoJ noted, 'interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act.' This ruling is great news for the legions of online gamblers and poker players hoping to access the Internet for gambling opportunities that do not involve sporting events.
Illegal Gambling Business Act of 1970
In the wake of the success of the 1961 Interstate Wire Act, the United States Congress followed up with the Illegal Gambling Business Act of 1970. Unlike the former however, the Gambling Business Act is designed to shore up the individual state's efforts in their own battles against illegal syndicated gambling.
Those convicted under the measure are subject to penalties of not more than five years, and fines of upwards of $250,000. Additionally, federal law enforcement agencies are empowered to confiscate any money or property used in the commission of the gambling offence. Again, like the Interstate Wire Act before it, the Illegal Gambling Business Act aims at the organized crime profiting from illegal gamblers rather than the casual player.
Perhaps the biggest hurdle the legislation holds for players today is how it relates to online gambling options. Again, while not targeted against individual players, the law does have a cooling effect on state leaders looking to expand their gambling options through online casino and poker play within their jurisdictions.
The Indian Gaming Regulatory Act
Gambling formed the social and cultural life of Native Americans for millenniums before the settlement of European pioneers. Faced with limited economic opportunities and community dislocation, tribal groups began lobbying for the ability to establish casino style facilities designed to bring revenue into the tribe's coffers. The resultant legislation emerged in 1988 with passage of the Indian Gaming Regulatory Act. Borrowing on their unique status as Sovereign nation, tribes in California and Florida opened gaming facilities that circumvented strict state laws regarding gambling.
Is Online Poker Still Illegal In The Us
For regulatory purposes, the federal government recognizes three separate classes of Indian gaming:
Class I—gaming is associated with tribal celebrations and ceremonial events such as pow wows and Potlatches. In terms of regulatory efforts, federal authorities do not pay much attention to these games.
Class II—games include bingo, poker, and lottery-style pull-tabs. Class II games are frequently used and offered for charitable purposes.
Class III—are the true revenue generators for casinos featuring games that rival the excitement of such gambling Mecca like Atlantic City and Las Vegas. These casino games include a myriad of options including roulette, slot machines, horse racing, blackjack, baccarat, and live poker.
In terms of jump-starting the gambling craze that has overtaken the nation, the Indian Gaming Regulatory Act is critical to opening the floodgates to authorize gambling venues. Indeed, the growth of Native American casinos inspired states to tear a page from the Indian's playbook with statewide lotteries. Today, 44 states host regulated, Indian casinos within their jurisdictions.
Professional and Amateur Sports Protection Act
As mentioned, the Interstate Wire Act aimed its regulatory ire at the method sports betters used when placing their bets namely, the telephone. While written to combat organized criminal gangs, the Professional and Amateur Sports Protection Act sought to eliminate sports betting across the nation. The legislative brainchild of then Senator Bill Bradley, a former professional basketball player himself, the act was in response to a wide-ranging investigation into game fixing at the college and professional level. In short, the senator believed that gambling was having a negative effect on the performance and integrity of sports competition in the country.
The core of the legislation blocks state governments from allowing wagering on professional or college sports teams. Specifically, 'It shall be unlawful for any governmental entity to sponsor, operate, advertise, or promote gambling on one or more competitive games in which amateur or professional athletes participate.'
The door on sports wagering was not completely closed however, because four states were grandfathered in to avoid the restrictions under the Professional and Amateur Sports Protection Act. Each of those states, Oregon, Nevada, Delaware, and Montana, all had previous legislation authorizing regulated sports betting. New Jersey was offered the chance to provide authorizing legislation within a year of passage of the federal act, but they failed to legislatively act in time.
The Unlawful Internet Gambling Enforcement Act (300)
No single piece of federal gambling legislation influences individual players than the Unlawful Internet Gambling Enforcement Act (UIGEA). Conservative lawmakers slipped the UGIEA into a larger omnibus national defense bill. The SAFE Ports Act, a measure they knew would pass, was signed by then-President George W. Bush in 2006.
The intent of the legislation was clear; the design was to curb online gambling by making it illegal for financial groups and banks to process money that derived from gambling activity. The belief behind the measure was that if you could turn the tap off the funds, players and operators would have no reason to continue gambling.
Under the language of the law, 'prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet, and that is unlawful under any federal or state law.'
While many people believe that the measure makes online gambling and poker play illegal that misconception is incorrect. What the Unlawful Internet Gambling Enforcement Act does is makes it harder to send or receive money for their gambling activity at known gambling sites.
Owing to serious loopholes, the UIGEA is problematic. While some of the biggest names in the online gambling business withdrew from the American market, United States-based players can easily access smaller players based offshore with U.S. facing websites.
Players can access these sites under the UIGEA with no worries that they will be implicated in illegal gambling activities. The law focuses on the banks and credit card providers facilitating the payment of bets and winnings. To get around that, American players often send payments via such companies as Western Union and MoneyGram, and receive their winnings in the same fashion.
In April 2011, federal officials moved forward with indictments against the biggest players in the online gambling industry with indictments handed down to the operators of PokerStars, Full Tilt Poker, and Absolute Poker. Investigators found evidence implicating these companies of attempting to skirt UIGEA strictures by enlisting third-party payment processors.
Black Friday and the Changing Poker Landscape
The unsealing of the indictments also mark what poker aficionados call Black Friday. Not only did the charges show that large online operations were in violation of the UIGEA, but they were also accused of money laundering and accounting fraud. The government moved forward to seize property and accounts of the indicted who were looking at serious jail time and fines for their transgressions.
The effect on online gambling was chilling in the United States. As major platforms pulled out of the American market, American players were forced to scramble to find willing offshore platforms they could access for their online play.
Six years following the Black Friday, the U.S online poker market is still in flux. Three states, Nevada, Delaware, and New Jersey have all passed online gambling regulation and a host of other states is vying to join those states in offering online play for their residents.