Nov 21, 2019 Have you considered upgrading your poker skills with one of Upswing’s training courses? It’s time to get off the fence because we’re slashing prices by 25% site-wide for Black Friday! Apr 13, 2012 A year ago, hundreds of thousands of online poker players in the United States woke up on what was later dubbed Black Friday to the Department of Justice cracking down on. On April 15th, 2011, the dreaded Black Friday unfolded. It all began when the US Attorney of the Southern District of New York Preet Bharara and Assistant Director of the New York Field Office for the FBI Janice Fedarcyk unsealed an indictment against websites PokerStars, Full Tilt Poker and Absolute Poker.
There is a significant amount of confusion about whether online poker in the US is legal or not. This confusion has not been helped by some sites referring to offshore poker sites as “illegal”, when in fact they are regulated and licensed – only not by authorities in the USA.
This article aims to clear up the myths about online poker legislation in the United States and provide an accurate view of the current rules and regulations. As some of these rules and regulations vary according to individual jurisdictions, we have also included a series of state-by-state guides which we aim to keep updated as changes occur.
Is it Legal to Play Poker Online in the United States?
There is no federal law that prohibits players from playing poker for real money online in the US. Many people believe that the Wire Act of 1961 or the Unlawful Internet Gaming Enforcement Act of 2006 (UIGEA) made it illegal to play poker online in the US, but that is inaccurate.
In September 2011, the US Department of Justice released a formal legal opinion that the Wire Act only related to sports betting (which is also banned by the Professional and Amateur Sports Protection Act 1992), while UIGEA made certain methods of payment processing illegal.
However, each state has its own set of laws when it comes to gambling. This makes it very difficult for individuals to figure out if they are breaking the law by playing poker online. There has also been one significant event (“Black Friday”) that sculpted the current landscape for online poker in the United States.
States that have Regulated Online Poker
Following the release of the Department of Justice´s opinion, three states introduced legislation for the regulation of online poker – Nevada, Delaware and New Jersey. By the end of summer 2019, Pennsylvania joined as the group as the fourth state to legalize online poker. Several other states are in the process of debating the pros and cons of regulated online poker, and it is anticipated that a second wave of regulating states will soon follow.
The good news for players in the US is that many experts are predicting a domino effect when states that are currently sitting on the fence realize the tax revenues that can be generated from online poker. Hopefully, this will result in the majority of states providing some form of regulatory structure in the near future.
On the flip side of the coin, there have been several attempts to regulate Internet poker at federal level, and also to ban it. Nothing has materialized from any form of lobbying on Capitol Hill and this is likely to remain the case – as states opposed to Internet poker will demand an opt-out, while those in favor of Internet poker oppose a blanket ban on the grounds that it affects their constitutional rights under the tenth amendment.
The Effects of UIGEA on Internet Poker
The passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) made it illegal for US banks and other US-based payment processors to transfer funds to or from an Internet poker site. This has made it increasingly difficult for online poker players to deposit funds into their accounts, but it definitely has not made playing Internet poker for real money in the US illegal.
States that have regulated Internet poker have taken advantage of a carve-out in UIGEA that allows intrastate financial transactions for horse racing and fantasy sports betting to overcome payment issues. In the other forty-seven states, a selection of poker deposit methods exists to enable players to fund their accounts (and withdraw their winnings), so effectively UIGEA was just an annoying distraction.
What the passage of UIGEA did achieve was the withdrawal of several major poker sites from the US – including the industry leader at the time, PartyPoker. The void was filled by PokerStars and Full Tilt Poker, who respectively became the biggest online poker sites in the world until Black Friday in April 2011.
The Effects of Black Friday on Online Poker
On April 15 2011, the US Department of Justice unsealed indictments against PokerStars, Full Tilt Poker and another major operator in the US market – Absolute Poker. It was alleged in the indictments that the three online poker providers had illegally circumnavigated UIGEA by laundering profits through small banks and offshore payment processors.
The seizure of the poker sites´ domain names resulted in their closure – PokerStars later going back online in the US so that players could withdraw their funds. PokerStars went on to buy out Full Tilt Poker two years later, and made a settlement with the Department of Justice that included the repayment of former US Full Tilt Poker players.
Following the closure of the three sites, players in the US sought out other sites to play at. This led to the emergence of Americas Cardroom and Black Chip Poker as major players in the US market – and, more recently, Bovada and Ignition Poker. Although these sites have never been able to command the sort of traffic that was witnessed prior to Black Friday, they still provide a viable – and legal – alternative to not playing online poker at all!
Guide to Online Poker Legislation in the States
Poker legislation in the states is changing all the time. You can see the current state-by-state laws relating to Internet poker by clicking on the state links in the menu on the right or click on one of the states below:
Black Friday in the online poker industry occurred on April 15th, 2011 when the United States District Attorneys Office of Southern New York unsealed an indictment against major operators of US online poker sites. The indictment which cited a number of charges ranging from operating an illegal gambling business to money laundering targeted principals at major sites including PokerStars.com, FullTiltPoker.com, UltimateBet.com and AbsolutePoker.com. It also implicated a number of other individuals who were either directly or indirectly linked to the financial side of the businesses listed in the original indictment. The April 15th indictment included the following company principals as well as payment processors with charges and international arrest warrants:
- Isai Scheinberg (Founder of Pokerstars)
- Raymond Bitar (Full Tilt Poker CEO)
- Scott Tom
- Brent Beckley
- Nelson Burtnick
- Paul Tate
- Ryan Lang
- Bradley Franzen
- Ira Rubin
- Chad Elie
- John Campos (CEO Sun Trust Bank)
In conjunction with the unsealing of the indictments was the seizure of prominent poker domains associated with the operators and the PokerStars.com, FullTiltPoker.com, UB.com and AbsolutePoker.com domain names were seized on the same day following the release of the charges. There were also dozens of international and local bank accounts frozen that contributed to most of the operating funds used by the sites to conduct withdrawals as well as finance daily operations.
This caused havoc amongst the online poker community as sites quickly scrambled to try and get operations back online since they were immediately disrupted when the domains were seized. Since Black Friday the only sites successful in regaining control of their domains are PokerStars and Full Tilt. Below we’ve provided an overview of the different sites and how they’ve reacted to the charges from Black Friday contained in the indictments.
PokerStars – Prior to Black Friday PokerStars was the largest online poker site in the world and when its domain was seized thousands of players anxiously waited for news on their funds and if they would be able to retrieve them. PokerStars was quick to act and made a deal with the USDOJ to have their accounts unfrozen and began the process within a few weeks of returning funds to US players. What’s interesting about this is that the USDOJ permitted to them to continue operating as long as they did not accept any players located in the United States. Currently PokerStars is operating as normal outside the US but still faces the charges from the lawsuit and their owner and founder’s whereabouts unknown.
Full Tilt Poker Black Friday
Full Tilt Poker – One of the most affected companies in the post Black Friday havoc was Full Tilt Poker and although it managed to get its domain back a short time after PokerStars US players have been unable to receive their funds. After the indictment Full Tilt’s main accounts were frozen and it has also recently come to light that the company grossly mismanaged its finances crediting uncollectable deposits as well as loaning money to their sponsored pros. Recently they also had their Alderney Gaming License suspended for non-payment of fees and are currently engaged in a legal proceeding whereby new investors could acquire the site and pay back US players if an agreement is reached.
UltimateBet & Absolute Poker – Both Ultimate Bet and Absolute Poker have made no moves to quickly return US player funds and have basically ceased operation for all intensive purposes firing most of their staff located in Costa Rica. There have been reports that players are allowed to withdraw a maximum of $250 per week however in all likelihood this operation will fold up and take the funds they still have unfrozen. Ultimate Bet and Absolute Poker were also involved in a cheating scandal whereby certain accounts could see their opponents hole cards and Black Friday has marked the beginning of the end for the tainted brand which has little chance of ever operating in the online poker space again.
Sportsbook.com & Players Only – Sportsbook.com and Players Only were another popular US poker brand that recently decided to exit the market due to the lawsuits and risks of operating in the US market.
Why Did Black Friday Happen?
Black Friday was the culmination of regulatory changes brought about in 2006 through the UIGEA (Unlawful Internet Gambling Enforcement Act) which basically made it illegal for US banks to facilitate, accept or process financial transactions related to online gambling. To skirt this legislation, poker sites used hundreds of third party payment processors to hide the nature of funds in order to provide deposit and withdrawal facilities to their players. This was conducted via a number of methods including credit cards, eChecks as well as electronic funds transfers involving numerous shell companies and entities around the world and is the heart of the Black Friday Indictments.
In 2009, the US Department of Homeland Security setup an organization called Linwood Payment Solutions (www.PaymentProcessingSolutions.com) which was a front company created to gain an inside track on how the online poker sites conducting their financial transactions. Over the course of 2 years, Linwood executives (really US agents) signed processing agreements with major players listed in the indictments which enabled them to gather evidence and build a case against the operators and intermediaries involved in processing the gambling transactions. By 2011 when the indictment was released, Linwood had processed tens of millions of dollars for the operators and knew every detail of their processes enabling them to easily freeze suspect accounts and build an incredibly strong case against the poker operators.
Can I Still Play Online Poker From The USA?
Although many of the major online poker sites shutdown post Black Friday there are still a small number of quality US poker sites that are accepting deposits from US players. Because of the volatility in the market right now only a small number of sites have the capabilities necessary to allow US signups so its best to check this site as often as possible for the latest information on which sites are and aren’t accepting players located in the United States. Currently US players best deposit options include credit cards, Pre-Paid cards, Wire Transfer and Western Union or Moneygram, be sure to check directly with each US site to ensure that they offer a feasible deposit method to fund your player account. Some sites, like BetOnline are able to accept all poker players. This means that USA poker in New Jersey, Utah, Maryland and even Washington is still possible.
Us Poker Sites
What’s The Future of US Poker Post Black Friday?
Online Poker Us Black Friday 2017
Although there is still a lot up in the air with the pending lawsuits, possible settlements and legal challenges against the legality of online poker most industry experts believe that Black Friday was the first step in creating a regulated and legal environment for US players to play poker online. Prior to Black Friday PokerStars had entered into an agreement with Steve Wynn and his brand to form PokerStarsWynn.com which would serve as a vehicle to offer online poker to US citizens. After the indictments came down this deal was quickly terminated but it’s widely believe that behind the scenes the framework is being setup to introduce a legal and regulated environment over the next few years.