Legal Situation of Poker in USA

Online poker is gaining popularity worldwide, and with the UIGEA it can be confusing as to what the actual legal status of online poker is is the USA. Many online poker rooms have banned US players, and online E-wallets don't make it any easier to fund your account if you do find a poker room that accepts US players. With this confusion and frustration, it can be difficult to understand the legal situation of online poker in the US.

Is it Legal to Deposit?

It is not illegal for players to deposit money into online ewallets, or online poker accounts. Gambling online is a very grey area, and the laws surrounding it are very vague. Until lawmakers become more knowledgeable about online gambling, it is unlikely that any laws surrounding online gambling will become more clear.

Regardless of the grey area, the UIGEA is not targeted at the casual player. The idea was to limit the funneling of funds into other illegal activities. As of right now it is legal for most US players to play online poker. Laws vary from state to state and change rapidly. If you are concerned about the legality of your poker account, your best bet is to keep a close eye on your state's laws.

If it's Not Illegal, Why are US Players Banned from Certain Poker Rooms?

Many poker sites have banned US players simply as a method of self defense. Poker rooms that have allowed US players have been seized and searched by the FBI. This locks up their bank accounts and renders them unusable. This not only affects any US players, but all the people who play at that site.

Some poker rooms noticed very severe drops in their share value and traffic levels when the UIGEA was passed. Many people were not sure what exactly the UIGEA meant for their online gambling and did not want to risk prosecution and stopped playing. Some poker sites preemptively banned US players protecting themselves against potential changes in the law. Distancing themselves from the uncertain future of online gambling in the US protects the poker site against possible legal action. Read this press release at Yahoo Finance to know more about the latest developments in the US online gambling situation.

What States is Online Poker Illegal in?

Every state has varying laws on gambling. They vary on whether they allow land based casinos to have card games, bingo, and slot machines. They even vary on the acceptance of scratch tickets. It is not surprising that they vary on the legality of online gambling. However, Washington is the only state that has laws explicitly banning online poker.

As of right now the only states that have laws banning online gambling are:

How Does the UIGEA and the Wire Act Affect Me?

These two very intimidating sounding laws are vague and frustrating to online poker players. They have created a very large impact on online poker, if only because people fear the vague wording.

The Wire Act does not impact online poker. The law was written surrounding sports betting, and is not applicable to online poker. This was confirmed by the 5th Circuit Court of Appeals. The Wire Act is written with a focus on sportsbook operators, and is not meant to prosecute the casual sports bettor. The few indictments for illegal gambling have been laid against sportsbook operators.

The UIGEA does involve online poker, however. The problem is that it does not ban online poker. It does not ban playing online poker. The law only specifically bans US financial institutions from transferring funds to online gambling sites. This is why US players typically cannot fund their poker accounts with a bank transfer- however their credit cards are accepted. Players can also withdraw their funds into an online eWallet.

Playing Online Poker

Until there is a clearly defined federal law that bans online poker, most US players are safe to play online poker. That is, unless they live in the state of Washington, who has explicitly banned online poker. While many states do have laws against online gambling, there are great arguments as to whether or not poker is a game of skill, and therefore not gambling according to the law.

The wisest course of action is to not keep too much in your online poker bankroll, and keep a very close eye on your state's laws. The poker players who play at online casinos that offer poker as well as other gambling games should be sure they do not live in a state that bans online gambling.

The most important thing for players to remember is that online poker winnings are technically taxable income, and losses are deductible. Trying to hide funds and avoid paying taxes will simply give the government even more reason to ban online poker.