Bad News for American Online Poker Players

On April 15, 2011, the Department of Justice indicted three of the biggest online poker sites on the internet; Full Tilt Poker, Pokerstars, and Absolute Poker. The indictment stated that the sites used fraudulent means to accept money from poker players in the United States. Doing so violates the Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed in 2006. You can read a summary of what the UIGEA is all about here. A lawsuit has also been filed accusing all 3 poker rooms of money laundering.

What does this mean for online poker players who live in the United States? It simply means that they can no longer play online poker for real money. They can still register and have an account, but they can only play at the ‘play money’ tables. And really, where is the fun in that?

If you are not familiar with online poker, you might be asking yourself ‘how have Americans been able to play online poker for real money when it has been against the law for the past 5 years?’

The UIGEA clearly states that it is illegal for banks and financial institutions to allow transactions from checking accounts, savings accounts, credit cards, etc. to go to these sites. It did not prosecute the player. So, like most things in life that are prohibited, Americans found ways to deposit into their online poker accounts while circumventing the banks. This was most commonly done using third-party e-wallets (an example of an e-wallet would be something like Paypal. However, Paypal complied with the UIGEA…they are just mentioned as an example because they are famous). A willing player would simply transfer money from their financial institution to the e-wallet, and then from the e-wallet to their online poker account. And, like most things in life that are prohibited, their were risks associated with using third party institutions, the most common being that the e-wallets would be shut down and if you had money sitting in your account…well, you were out of luck.

So what happens now? The online poker rooms have been returning money to the American players (yours truly has had a whopping $16 returned this week from one of the sites. I owned the $.10/$.20 no limit tournaments!). As for the future of online poker…well, it remains to be seen. But if I know my fellow online poker players, where there is a will, there is a way. It would be in the government’s best interest to consider taxing and regulating the industry; it certainly can’t hurt to collect some revenue from it, especially in today’s economy. Regardless, Americans will find a way to play poker online, whether it is legal or not, whether the government likes it or not.