US gambling laws have undergone some revisions regarding how they are applied to online poker, changing the legal landscape in a positive way for poker fans.
Why Is Online Poker Illegal In The US?
- While Party Poker certainly intends on returning to the United States one day, one of two things would need to transpire in order for this to happen: 1. There would need to be a change in US law that would allow for the licensing and regulation of online poker sites (most likely) 2. Party Poker would need to become a private company (less likely).
- States That Will Eventually Offer Legal Online Poker West Virginia and Michigan West Virginia became the fifth US state to legalize online poker in March 2019. The launch of the state's online poker platforms could happen by 2021.
- The legality of online poker in the United States varies according to your jurisdiction. Contrary to what some sources might have you believe, no federal law specifically forbids online poker. State laws, on the other hand, might or might not, depending on the state.
Online poker, while widely popular and lucrative, resides in a complex legal maze that requires some finesse to navigate. In order to understand the nuances involved, it would help to have a good overview on US gambling laws. US based online poker was kept at bay for many years through the Federal Wire Act, which was interpreted to apply to any type of domestic online gambling entertainment. These circumstances gave rise to legally licensed offshore poker sites that accept US players. Revised interpretations regarding the application of the Federal Wire Act allows individual states the option of deciding whether or not they want to host regulated online poker, however very few have capitalized on this opportunity.
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The heyday of online poker in the US was in the early 2000s when the technological advancements were paced far ahead of regulatory oversight. The US gambling market was ripe for investment, and numerous licensed offshore poker rooms set their sites on American poker players. This provided a large range of poker sites for US poker buffs to participate at. Things changed in 2006 when President George Bush signed the Unlawful Internet Gambling Enforcement Act (UIGEA).
The UIGEA bill prohibits financial institutions from progressing gambling related transactions via the Internet. This law forced many online poker providers to shut down their US-facing sites due to a blowup of USA friendly deposit methods. Some large companies like PokerStars, Full Tilt Poker and Absolute Poker continued to do business with American players as it took some time for the ramifications of the law to be implemented. In fact, the final regulations brought on by the UIGEA did not go into effect until late 2009. There were efforts to draft pro-poker legislation for some states, but not before the entire poker world was rocked on April 15, 2011.
On what would become known as Black Friday, the US Department of Justice issued indictments against financial institutions and online poker groups like PokerStars, Full Tilt Poker Absolute Poker. Charges included UIGEA violations, bank fraud, money laundering and illegal gambling. Bank accounts and domain names were seized as a result and the sites immediately stopped accepting US players. Each site continued to do business with other countries.
Delaware is the smallest US state with legal online poker, though a liquidity-sharing agreement with Nevada does help the numbers. Thee state's three casinos all operate their own branded skins on a shared 888 Poker network. Until a federal law is put into place governing the country's poker sites as a whole, the new dawn of online poker in the United States may continue to be a false one. Restoring the Wire Act.
In the wake of Black Friday, the future of online poker seemed unclear. The DOJ issued a Formal Opinion that the Federal Wire Act only applied to sports betting, leaving the decision to host online casinos and poker up to each individual state. American players had online poker access through licensed offshore sites, but it was not until 2013 that the US saw US-based online poker emerge through Nevada, Delaware and New Jersey. Ultimate Poker and World Series Of Poker launched sites along with several other small companies. PokerStars made its US comeback in March 2016 through New Jersey and the state has been profiting off the regulated site ever since.
The UIGEA targets financial institutions, not individual players. While US-based online poker is illegal in most states, US players do have some legally sanctioned options available through legitimately licensed and regulated offshore destinations. It is likely that more states will push for regulated online poker, but it takes time for legislation to pass and be implemented. We anticipate more states will get on board with this type of gambling entertainment within the next few years.
This is a developing story.
A major victory was declared Thursday for supporters of iPoker and online Casinos on Pennsylvania. The Pennsylvania legislature passed a landmark bill that will allow online poker, online casino, and daily fantasy sports (DFS) within the borders of their state. Pennsylvania is on the brink of becoming the fourth state in the U.S. to authorize and regulate online gaming.
The amended iGaming bill, H 271, was passed in the Senate Wednesday night and sent to the House, where it received a couple hours of debate both Wednesday night and Thursday morning. The House then passed the bill Thursday and Gov. Tom Wolf is expected to sign the bill into law soon. He has ten days to do so before the bill automatically becomes law.
UPDATE: Pennsylvania Gov. Tom Wolf signed the bill, making Pennsylvania the fourth U.S. state to legalize Internet gambling.
Wolf says he's signed the massive gambling expansion bill passed last week.
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— Marc Levy (@timelywriter)While Pennsylvania gained a lot of ground in the iGaming legislation front in 2016 leading into this year, earlier this month, that optimism waned when budget negotiations seemed to break down, making Thursday's victory even sweeter.
Bill Details
Along with online poker, slots, table games and DFS, the bill also allows for sports betting (if federal ban is lifted), online lottery sales, tablet gaming in authorized areas at some airports, video gaming terminals at approved truck stops, ten 'satellite' casinos and alterations to Category 3 casinos to include more slots and remove membership fees, for a one-time fee.
Tax Rates
The tax revenues from online gaming are obviously one of the major advantages that states gain from passing such legislation. While similar to the iGaming bill in New Jersey, one key difference in the bill just passed in Pennsylvania is the effective tax rate for online slots, which stands at 54 percent. That is compared to the 17.5 percent rate for all iGaming in New Jersey and 16 percent for internet poker and table games in Pennsylvania.
The tax rates for sports betting and DFS were passed at 36% and 15%, respectively. The implication here is that while the rates for poker and other table games seem reasonable, the steep tax rates for online slots and sports betting may prove problematic in terms of getting operators to offer the products, making profit and growing the industry.
It will be interesting to see how that affects the products offered by operators in the state. Pappas mentioned that the steep internet slots tax rate could impact how many casinos offer the product and said, 'Ultimately, that rate needs to come down so Pennsylvania can reach iGaming's full revenue potential.'
Licensing
As it stands, the Pennsylvania bill offers three separate licenses for online slots, house-banked games and peer-to-peer games like poker. According to Play Pennsylvania, operators can buy separate licenses for $4 million, while existing PA casino operators can purchase all three licenses for $10 million if they do so within 90 days of license availability. After 120 days, operators outside of the state are allowed to apply for licensure.
A Win for All
The bill being passed today is proof of the efforts of many, both in and outside of the legislature.
John Pappas, Executive Director of the Poker Players Alliance (PPA), applauded the passage of iGaming legislation in Pennsylvania, which comes four years after New Jersey passed their comprehensive iGaming legislation in 2013.
Will Online Poker Become Legal In Illinois
Pappas said in a statement: 'Pennsylvania made the right decision today.
'This is a major victory for consumers who, for years, have asked the state to step up and provide meaningful protections. The iGaming law will also help create new growth opportunities for the Commonwealth's brick and mortar casinos while providing needed revenue for the state budget,' continued Pappas.
Pappas also emphasized the success that iGaming in New Jersey has had and the potential future growth expected in the industry.
'The experience in New Jersey has been nothing short of exceptional. iGaming is responsibly operated by licensed casinos and the technologies they deploy ensure adherence to strict regulatory standards. Moreover, the industry is growing and so are tax revenues. Pennsylvania is now in the driver seat to do even better.'
Will Online Poker Become Legal In Usa
The UIGEA bill prohibits financial institutions from progressing gambling related transactions via the Internet. This law forced many online poker providers to shut down their US-facing sites due to a blowup of USA friendly deposit methods. Some large companies like PokerStars, Full Tilt Poker and Absolute Poker continued to do business with American players as it took some time for the ramifications of the law to be implemented. In fact, the final regulations brought on by the UIGEA did not go into effect until late 2009. There were efforts to draft pro-poker legislation for some states, but not before the entire poker world was rocked on April 15, 2011.
On what would become known as Black Friday, the US Department of Justice issued indictments against financial institutions and online poker groups like PokerStars, Full Tilt Poker Absolute Poker. Charges included UIGEA violations, bank fraud, money laundering and illegal gambling. Bank accounts and domain names were seized as a result and the sites immediately stopped accepting US players. Each site continued to do business with other countries.
Delaware is the smallest US state with legal online poker, though a liquidity-sharing agreement with Nevada does help the numbers. Thee state's three casinos all operate their own branded skins on a shared 888 Poker network. Until a federal law is put into place governing the country's poker sites as a whole, the new dawn of online poker in the United States may continue to be a false one. Restoring the Wire Act.
In the wake of Black Friday, the future of online poker seemed unclear. The DOJ issued a Formal Opinion that the Federal Wire Act only applied to sports betting, leaving the decision to host online casinos and poker up to each individual state. American players had online poker access through licensed offshore sites, but it was not until 2013 that the US saw US-based online poker emerge through Nevada, Delaware and New Jersey. Ultimate Poker and World Series Of Poker launched sites along with several other small companies. PokerStars made its US comeback in March 2016 through New Jersey and the state has been profiting off the regulated site ever since.
The UIGEA targets financial institutions, not individual players. While US-based online poker is illegal in most states, US players do have some legally sanctioned options available through legitimately licensed and regulated offshore destinations. It is likely that more states will push for regulated online poker, but it takes time for legislation to pass and be implemented. We anticipate more states will get on board with this type of gambling entertainment within the next few years.
This is a developing story.
A major victory was declared Thursday for supporters of iPoker and online Casinos on Pennsylvania. The Pennsylvania legislature passed a landmark bill that will allow online poker, online casino, and daily fantasy sports (DFS) within the borders of their state. Pennsylvania is on the brink of becoming the fourth state in the U.S. to authorize and regulate online gaming.
The amended iGaming bill, H 271, was passed in the Senate Wednesday night and sent to the House, where it received a couple hours of debate both Wednesday night and Thursday morning. The House then passed the bill Thursday and Gov. Tom Wolf is expected to sign the bill into law soon. He has ten days to do so before the bill automatically becomes law.
UPDATE: Pennsylvania Gov. Tom Wolf signed the bill, making Pennsylvania the fourth U.S. state to legalize Internet gambling.
Wolf says he's signed the massive gambling expansion bill passed last week.
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— Marc Levy (@timelywriter)While Pennsylvania gained a lot of ground in the iGaming legislation front in 2016 leading into this year, earlier this month, that optimism waned when budget negotiations seemed to break down, making Thursday's victory even sweeter.
Bill Details
Along with online poker, slots, table games and DFS, the bill also allows for sports betting (if federal ban is lifted), online lottery sales, tablet gaming in authorized areas at some airports, video gaming terminals at approved truck stops, ten 'satellite' casinos and alterations to Category 3 casinos to include more slots and remove membership fees, for a one-time fee.
Tax Rates
The tax revenues from online gaming are obviously one of the major advantages that states gain from passing such legislation. While similar to the iGaming bill in New Jersey, one key difference in the bill just passed in Pennsylvania is the effective tax rate for online slots, which stands at 54 percent. That is compared to the 17.5 percent rate for all iGaming in New Jersey and 16 percent for internet poker and table games in Pennsylvania.
The tax rates for sports betting and DFS were passed at 36% and 15%, respectively. The implication here is that while the rates for poker and other table games seem reasonable, the steep tax rates for online slots and sports betting may prove problematic in terms of getting operators to offer the products, making profit and growing the industry.
It will be interesting to see how that affects the products offered by operators in the state. Pappas mentioned that the steep internet slots tax rate could impact how many casinos offer the product and said, 'Ultimately, that rate needs to come down so Pennsylvania can reach iGaming's full revenue potential.'
Licensing
As it stands, the Pennsylvania bill offers three separate licenses for online slots, house-banked games and peer-to-peer games like poker. According to Play Pennsylvania, operators can buy separate licenses for $4 million, while existing PA casino operators can purchase all three licenses for $10 million if they do so within 90 days of license availability. After 120 days, operators outside of the state are allowed to apply for licensure.
A Win for All
The bill being passed today is proof of the efforts of many, both in and outside of the legislature.
John Pappas, Executive Director of the Poker Players Alliance (PPA), applauded the passage of iGaming legislation in Pennsylvania, which comes four years after New Jersey passed their comprehensive iGaming legislation in 2013.
Will Online Poker Become Legal In Illinois
Pappas said in a statement: 'Pennsylvania made the right decision today.
'This is a major victory for consumers who, for years, have asked the state to step up and provide meaningful protections. The iGaming law will also help create new growth opportunities for the Commonwealth's brick and mortar casinos while providing needed revenue for the state budget,' continued Pappas.
Pappas also emphasized the success that iGaming in New Jersey has had and the potential future growth expected in the industry.
'The experience in New Jersey has been nothing short of exceptional. iGaming is responsibly operated by licensed casinos and the technologies they deploy ensure adherence to strict regulatory standards. Moreover, the industry is growing and so are tax revenues. Pennsylvania is now in the driver seat to do even better.'
Will Online Poker Become Legal In Usa
Get Involved in the Fight
The win marks a momentous victory for the Poker Players Alliance, which has been at the forefront of the fight for licensed and regulated online poker and iGaming across the U.S. and particularly in Pennsylvania. PPA members made their voices heard through emails, phone calls, media and social media to reach lawmakers, which proved to be effective.
With 1.2 million members nationwide and 25,000 in Pennsylvania, the PPA is the leading poker grassroots advocacy group. You can find out more about how to join the fight for iGaming in your state at The PPA's website.
Lead image courtesy of Dominic Lacivita
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