Is anyone here well versed in the legality online poker the US? If so some help would be greatly appreciated. I'm currently in my final year studying law at university in the UK and for dissertation topic ive chosen to write a paper about the legality of online poker the US. Obviously studying law in the UK I really have no idea how the US legal system works and I feel I may have bitten off a little more than I can chew with this one. I want to talk about Black Friday, the UIGEA, the Wire Act, United States v. Scheinberg etc, but the more I read into this the more confused I get. I was under the impression online poker was illegal but after looking into it my tutor says it doesn't look like it is. What actually happened on Black Friday and what was the significance of the Wire Act and UIGEA?

Within the online poker industry echo chamber, it was long an article of faith that online poker was legal (and for purposes of this post, I am referring only to the operation of a business offering unlicensed online poker, not playing poker on an unlicensed site). That view was wrong, as many discovered on Black Friday.

The Wire Act had no role in Black Friday. It does not apply beyond sports betting.

Gambling in the US is mostly a state law issue, with several federal laws in place to help enforce gambling laws against larger gambling businesses (and organized crime). Notable federal laws include the Illegal Gambling Business Act (IGBA), the Travel Act, and the UIGEA. Each of those laws requires, among other elements, a violation of state gaming laws. The Black Friday indictments included charges under IGBA and UIGEA, and were later amended to add Travel Act charges (when the IGBA charges were temporarily in doubt because of the DiCristina district court decision, later reversed on appeal by the Second Circuit). The Black Friday indictments also carried various bank fraud charges related to payment processing.

On the state law level, online poker sites long argued that poker is not gambling because it is a game of skill. This argument has been uniformly rejected by every appellate court to consider the issue. In many states, there are specific laws regulating poker as gambling (this is common in states which regulate casino gaming and/or card rooms). In a few states, online gambling is expressly prohibited (poker advocates unsuccessfully challenged a Washington state online gaming ban).

Some poker advocates argued that foreign-based online poker companies were immune from regulation by states. That argument has never been tested in court, and has dubious merit.

As you think about the merits of the arguments stating online poker is legal, consider the fact that the Black Friday defendants have all pled guilty, settled, or remained fugitives abroad; none have fought the charges on the merits to the point of a court ruling. Also consider the fact that since Black Friday, PokerStars has only returned to operations in New Jersey, and only after getting a license. PokerStars' settlement with the DOJ allows it to operate where legal in the U.S. It seems PokerStars now takes the view that online poker is only legal in those states where it is explicitly licensed.

Long story short, the legal situation is complicated, but the idea that online poker is or ever has been legal in the U.S. in states which have not licensed it is an idea which has been debunked.

What was done on Black Friday was based on charges of violation of New York State law which then triggered UIGEA. The Wire Act wasn't utilized and wasn't mentioned at all.

Whether online poker is legal would likely depend on state law. And most states have vague, unclear laws that haven't been tested in court.

Here's a good thread for you to do research:
http://forumserver.twoplustwo.com/57...istory-770209/

wikepedia has good articles on the topic, too.

You should have access to law review articles and other scholarly works. Probably would have been a good idea to start there...

Nelson Rose has written a few decent ones that cover the basic legal structure. The titles are slipping my mind but you should be able to find them with minimal effort if you got into law school.

I've literally just been reading one by Nelson rose and it's been really handy. He's written a few them bu the sounds of it? I'll have to look into his work further

Many thanks

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Here is his website:
http://www.gamblingandthelaw.com/

UPDATE: Thanks for all the replies I didn't get chance to thank everyone individually. My dissertation is looking much better now and I intend to post period updates as I progress. Just as a thought I was thinking of posting it somewhere once complete, if not then perhaps wordpress. If I were to do that then would that be something anyone would be interested in?

Any instances of people getting charged for online gambling? Particularly interested in washington state experiences. I understand WA has the strictest laws around but have they ever been enforced? From my understanding the laws are in place to prevent domestic sites from excepting players and from businesses setting up shop in state, however when I read the law it is scary, actually a felony. It reminds me of downloading music/movies/software, etc harsh penalties but law enforcement is only concerned with the people owning the servers, not the users/small fry's. I can see the state getting interested if one where to be bringing in 100k a year or something but otherwise...?

Never been an instance in the U.S. of arrest or charge for playing online poker. Only operators have been gone after. Even the federal government seems unconcerned, considering that they allowed for refunds and remission to players to the tune of hundreds of millions of dollars in the case of PokerStars and FTP. Of course, past performance is no guarantee of future events. Washington state has the felony law on the books for a reason - if the tribes decide that online poker is infringing too much on their profits, they might get law enforcement there to make an example of a few players.

What I was told by someone who would know is that there isn't a prosecutor on the west side of the Cascades (Seattle side) willing to bring a case against online poker. There was a recent case regarding DFS on the east side however.

This is the law as I understand it, once again though I am a UK law student so US law is something I am still trying to come to grips with.

The UIGEA never made online poker Illegal. What it did do was prohibit the financial transactions that facilitate unlawful internet gambling under federal law. The first issue is that the UIGEA fails to explain exactly what 'unlawful internet gambling' is, it assumes that this something the reader is already privy to. Where gambling is concerned there are three types of game: skill, chance and hybrid. All that is really explained in the UIGEA is that the act does not apply to wagers placed in a 'game of skill'.

When distinguishing a game of skill from a game of chance courts apply the predominance test which asks whether skill or luck prevails in the outcome. So for example, in a game of chess skill is the only factor in determining the outcome whereas in roulette luck is the only factor. Poker would be best described as a hybrid of the two as where luck is a big factor in the short term, skill prevails over the long term. So... obviously I'm biased but the first issue seems to be that poker shouldn't even fall under the UIGEA.

This is complicated by the fact that each state has their own authority to legislate internet gambling as they see fit. Therefore, the UIGEA only applies to states where internet gambling was is already an offence. Pokerstars were indicted because it was alleged they laundered money to bypass banking regulations so that they could facilitate the financial transactions in the states where internet gambling was unlawful.

In essence what was of concern was not the players but the operators that were providing the games. The legislation was passed with the belief that internet gambling was becoming a problem for banks and credit card companies and Congress that need to address. As far as I am aware there has never been a case of an individual player being prosecuted under the UIGEA and I think that is the reason why.

In reality there doesn't appear to be any evidence that internet gambling was a problem for banks and credit card companies and the way the UIGEA was passed seems very suspicious. It was rushed through Congress on the back of a port security bill and very few even read it before voting on it. I heavily suspect the campaign against online poker was initiated through casino lobbying. We all know how powerful the casinos are in the US and if they felt like they were loosing money to internet poker it would make sense they would want it gone. With the flow of money and profit appearing to be the main influence on US anti-gambling laws its not the players that are targeted.

Thanks for all the great info guys, appreciated

If you have anymore questions don't hesitate I'll happily do my best

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Excellent summation, but you missed on a couple of points:

Not all courts nor all states used the predominance test to distinguish a game of chance from a game of skill. In some jurisdictions (states), any wagering on a game is gambling; in some, the predominance test is used; and in some, if chance plays a "material" role in the outcome, it is considered gambling. So the UIGEA comes into play in many states for poker, even if a court determines that skill is predominant in the long run.

As regards the passage of the UIGEA, it wasn't just the casino lobby that was pushing it, it was also the sports leagues as well as social conservatives. But these simply justified the actions of the politicians who attached the bill - it was a behind-closed-doors midnight deal as a favor to try to gain the conservative vote for a presidential bid of one politician who ultimately had no chance for the Republican nomination. But the real blame lays on the shoulders of poker players themselves. The general sentiment at the time among players was to stay quiet and not rock the boat to avoid upsetting the "status quo" of no federal legislation against online poker. If players instead had been vocal in their opposition to anti-online-gambling/anti-online-poker legislation and support for regulation instead, the UIGEA could have been avoided. (The same thing happened again between passage of the UIGEA and Black Friday - most players who cared stayed silent to avoid losing the "status quo".)

Ultimately, not enough players really cared about online poker, and the vast majority still don't. Not surprising since the vast majority are recreational players and will simply do something else with their time, like DFS (until that gets locked down). Fortunately, it won't be long before we can buy lottery tickets at most gas pumps...

Do you think theres any possibility of stars re-entering the US market any time soon?

Yes - slowly on a state-by-state basis. They have already been approved for a license by NJ, and are in the process of getting their software platform for NJ through the regulatory process. It could go live within the next month or two.

The recent KY court ruling against them is a big recent setback to their entry to U.S. states, but it will likely get overturned on appeal (or settled out of court for a fraction of the court award).

Close, but not quite right. UIGEA, like a number of federal criminal statutes, relies on state law violations to define a predicate offense. So, for UIGEA, unlawful gambling is defined in reference to state law. You see the same effect with the Illegal Gambling Business Act (IGBA), Travel Act, and RICO. So anyone would know that if they violated any state gaming law, they could be at risk of also violating UIGEA, IGBA, the Travel Act, etc.

When UIGEA was passed, there were no states where online gaming was legal, so all online gaming payment processing in the USA violated UIGEA. Today, two states (NJ and NV) have authorized forms on online gaming, so UIGEA would not apply to transactions with licensed casinos in those states.

The Black Friday indictments covered not only bank fraud, but also UIGEA and IGBA violations. The indictments were amended to add Travel Act violations when the IGBA charges were briefly called into question by the DiCristina district court ruling (later reversed on appeal by the Second Circuit).

Thanks, do you have any articles/reading material you could link me to? Any useful sources would be greatly appreciated.

many thanks

Thanks, do you have any articles/reading material you could link me to? Any useful sources would be greatly appreciated.

many thanks

Would this Stars give NJ players access to the international pool of PokerStars players or just NJ pool?

For now, just NJ. Might expand to include other regulated markets sometime down the road.

I think we can all agree that we need US players back on stars, the games will be so much more profitable.

Update: I know I've not been posting but everything has been super hectic over the past possible months. Pleased to say that I came out with the highest possible grade in my paper. Thanks to everyone who contributed