Is Online Poker Legal In The U.S.?
Friday, 21. May 2010

The answer to the question “Is online poker legal in the U.S.?” is yes if you are asking as a player. If you are asking as a potential online poker room operator than the answer is that you might want to find another country to keep and maintain your business. As far as the legality of online gambling in general, it is dependent upon the circumstances and perspectives of the party asking. Before providing explanations, I must state that I am not a Supreme Court Justice; Justice Department official; federal or state attorney general; or even an attorney. I am a layperson who has taken great interest in and followed the various issues and controversies surrounding online gambling.

In the eyes of the law, there is a difference between whether one is making bets and taking bets, providing payment options for online casinos, advertising online casinos, placing bets with an online sports book, placing bets in an online casino and placing bets in an online poker room. It is important to note that when reading the following article, that laws are constantly evolving and can change from moment to moment.

There are approximately 2.5 million Americans that participate in online gambling making an estimated $30 billion in bets annually. Players have nothing to fear from the federal authorities as regards online gambling. There is no federal law that states specifically that it is illegal for individuals to participate in online gambling. In a 2007 House hearing, U.S. Attorney Catherine Hanaway stated that there were no federal laws against the making of bets online. There is no record of the federal government taking action against an individual for placing a bet online. There was a case in the North Dakota state court where a man by the name of Jeffrey Truman was ordered to pay a $500 fine in relation to what was over $100,000 in winnings from sports betting. Otherwise, players have been free of any sort of legal interference. Of the online gambling activities that an individual may participate in, perhaps the lease risky would be online poker. There is a strong movement in the U.S. to begin considering poker as a game of skill rather than a game of chance in the eyes of the law. If poker were to be considered a game of skill in the eyes of the law then it would change the entire equation.

Taking bets, now that’s a whole different ball of wax. Running an online casino, sportsbook or an online poker room on servers located in the U.S. is illegal. That is one of the reasons that all of the online gambling operators maintain their servers in places like Antigua, the Isle of Man and Gibraltar. Things are somewhat harsher for operators of online sportsbooks. It is not enough for online sportsbook operators to just maintain their servers overseas, the operators best maintain themselves overseas as well. There have been a number of cases where CEO’s of online sportsbooks were arrested upon entering the U.S. Some were arrested for having taken bets over the phone which is illegal according to the Wire Act of 1961 and others were arrested on behalf of the state of Louisiana which has banned online gambling. That having been said, there are plenty of cases where online sportsbook operators have visited the U.S. without any difficulty.

As far as the legality of publishers taking ads from online gambling operators, it really depends on the size of the publisher. To date, the only publishers to face any sort of penalty in relation to taking ads from online gambling operation were a medium sized publisher in The Sporting News in 2006 and three enormous publishers in Microsoft, Google and Yahoo in 2007. The Sporting News got the worst of the four in terms of fines and it was required to pay a fine equal to the amount of money that they collected from the online gambling operators for placing the ads.

Other than the 4 publishers above, there were a number of other publishers, such as Esquire, that received warnings form the Justice Department to cease advertising online gambling operators. The publishers that were warned all complied with the Justice Department’s warning and none faced any fines or penalties. I could not find any record of a small publisher running into any problems with the federal government regarding online gambling ads.

The popularity of online poker has mushroomed over the past few years. These days, there are a number of very popular television programs based on poker such as Poker After Dark and High Stakes Poker where can regularly find advertisements for online poker rooms being broadcasted over network television as well as any number of cable channels.

No matter how you slice it, there is a lot of grey area as far as legality and online gambling. That having been said, as far as participating in online gambling, it would appear that there is almost no risk whatsoever.