A Poker Player’s Guide to Online Poker Law (Part 1: The United States)

Posted by Dave McCarthy | Filed under Bloggers Corner

Last week, Senator Jon Kyl (R-AZ, pictured above) finally dropped his hold on US Treasury nominees – he had been blocking important Treasury personnel from taking office because he was on tilt over the Obama administration’s delaying enforcement of his 2006 anti-online gambling law, the Unlawful Internet Gaming Enforcement Act (UIGEA).

According to an article (flush with poker metaphors) at PokerNewsDaily.com, Kyle’s fold had little to do with good policy: it wasn’t that he finally deemed the recovery of the US and world economies more important than obstructing online gambling. Rather, Obama simply threatened to appoint the nominees anyway during the next Congressional recess.

In honor of the esteemed Senator’s decision, here’s a brief overview of online poker law. Part 1 will deal with the United States, while future editions will highlight other parts of the world. Follow the jump!

Pre-flop (1961 – 2006): Prior to 2006, the law most commonly cited in reference to online poker was the 1961 Wire Wage Act. Federal courts repeatedly held, however, that the Wire Act only prohibited interstate gambling on sports events, not poker. Shuffle up and deal!

Flop (September 30, 2006): The day that Congress adjourned for the 2006 midterm elections, Jim Leach (R-IA), Jon Kyl (R-AZ), and a few other angleshooters colluded to pull an anti-gambling measure from their sleeve and attach it to the SAFE Port Act, a much needed law to tighten the starting hand requirements of US port security. That measure, the UIGEA, was not debated in Congress and has no relation whatever to port security, but to vote against the SAFE Port Act would have been a vote against America’s national security. America’s legislators being pot-committed to the SAFE Port Act, the legislative string-bet passed 409-2 in the House and 100-0 in the Senate. Table-captain George W. Bush signed the bill into law soon after.

The UIGEA does not make online poker illegal. To be brief: it makes it illegal for financial institutions to sell chips transfer money to “unlawful internet gambling” sites. The Floor Federal courts have yet to rule definitively whether poker, because of its significant skill component, constitutes “unlawful internet gambling.” Jurists have not applied the Phil Hellmuth Doctrine: “If it weren’t for luck, I’d win all the time.”

After passage of the UIGEA, some sites, like Party Poker, folded and left the US market. Others, like Full Tilt, continue to offer services to Americans. Talk about an action flop.

Turn (2006 – Present): The UIGEA presents a number of enforcement problems, many stemming from the fact that “unlawful internet gambling” is still undefined, making it impossible for financial institutions to know what is and isn’t illegal. Financial institutions would have been forced to comply with the law anyway by December 1, 2009, but the Federal Reserve and US Treasury called “Time” and pushed that deadline back to June 1, 2010. That’s what tilted Senator Kyl so badly that he put US Treasury nominees (and by extension, the global economic recovery) on hold.

River (Coming soon…): Barney Frank (D-MA) is playing aggressively for the regulation and taxation of online gambling, which would call the UIGEA a misdeal and overturn its “interference with [Americans’] personal freedom.” His Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R. 2267) has 65 co-sponsors. As chairman of the House Financial Services Committee, though, Frank’s been busy with the global financial meltdown and health care reform. But with the June 1 UIGEA compliance deadline only months away, poker players can expect a showdown pretty soon.

Note: I am not a lawyer. If you feel this review of online poker law is incomplete or incorrect, please let me know at DaveFromTheRail@gmail.com, and I will promptly modify the post.

Tags: Barney Frank, Jon Kyl, online poker law, SAFE Port Act, UIGEA

Permalink | February 16th, 2010 Play Online Poker at Full Tilt Poker

3 Responses to “A Poker Player’s Guide to Online Poker Law (Part 1: The United States)”

danny Says:
February 19th, 2010 at 7:22 am
great read!
thanks

Our pleasure. Thanks for the comment! – Poker from the Rail
Poker Brasileiro Says:
February 21st, 2010 at 6:39 pm
Nice timeline for UIGEA, I am also writing articles about it on my blog in portuguese.

I think the solution in USA will show the way to go for brazilian authorities also.

Great one, keep it up Dave!

Thank you, sir (or madam)! I plan to write more articles about online poker law in other countries. If you’d like to write the article about Brazil (maybe all of South America?) we’d love to have you as a guest poster. Email me at DaveFromTheRail@gmail.com if you’re interested. Also, I checked out your blog http://www.pokerbrasileiro.com/ and it looks pretty great. Makes me wish I spoke Portuguese!
Houston Vanwinkle Says:
October 17th, 2010 at 10:55 pm
I can’t comprehend why you don’t have more people commenting on your blog. I quite enjoy your blog and intend to comment more often.