There’s a widespread belief in the United States that playing online poker is completely and absolutely banned. While this isn’t too far from the truth, there are actually certain exemptions that allow some players to access online poker in the USA. Here’s what you need to know if you’re an American citizen trying to navigate the complexities of playing poker online from the US.
How Does the Law View Online Poker?
At one time, real money online poker was a common and legal activity in the United States. In 2006, however, the legislature passed the UIGEA, or Unlawful Internet Gambling Enforcement Act, a bill that fundamentally changed the legal treatment of online poker and gambling in America. Under the UIGEA, banks and credit providers could be held legally liable for facilitating payments to and from unlicensed online poker sites. At the time, no states had official licensing for online poker, owing to the fact that the market was relatively new and had not been subjected to state-by-state regulation. As a result, it became practically impossible for players to play poker online without their payment processors risking culpability under the UIGEA.
Today, however, some states have moved to license online poker platforms, thus allowing payment providers to legally serve residents of those states. At present, there are three states in which online poker is fully legal: Delaware, New Jersey and Nevada. If you live in one of these three states, you can access authorized poker sites with no fear of legal troubles as a result. If you live in the rest of the US, the legal waters become much murkier. While it is not federally illegal for individual citizens to play poker online, the legal difficulties of payment providers have made it effectively impossible for most US citizens to access online poker opportunities.
The Fallout of the UIGEA
Since it was passed into law, the UIGEA has been a consistently controversial piece of legislation. Websites that were once able to offer poker and other games to American players suddenly found themselves unable to do so, as payment providers couldn’t legally process transfers of funds. Many US poker players who had previously enjoyed online gaming were similarly left unable to keep playing. In 2011, several sites that had ignored the law were shut down and player funds held in their accounts were seized by the government. Though those funds were later returned to players, the move was a clear signal that the American government was renewing its commitment to enforcing the UIGEA. In the years since, many representatives who voted for the bill have criticized the process by which it was passed, owing to the fact that it was added onto an only nominally related piece of legislation in order to ensure its passage.
What if You Live Outside of a State That Licenses Online Poker?
Unfortunately, if you don’t live in or visit one of the states that licenses online poker platforms, you won’t be able to play. Players who attempt to access licensed sites from other states risk having their accounts shut down and the funds they have deposited confiscated. Similarly, you won’t be able to access unlicensed international sites from within the US.
Is the Poker Situation Improving in the United States?
The good news about the status of online poker in the US is that it is slowly reclaiming the ground it lost with the passage of the UIGEA. The three states that have made it possible to pursue online poker with legal difficulties have seen large sums of revenue in the form of taxes as a result. Several other states, including New York and Illinois, are considering measures to fully legalize online gambling. In addition, Pennsylvania has officially paved the way in law for online gambling to be allowed, though the measure has yet to go into effect. As states continue to seek out new sources of tax revenue, it is almost certain that online poker and other games of chance will see higher levels of legalization.
Depositing Funds in US Online Poker Accounts
For sites with legal licenses provided by states, payment processing isn’t a major issue. While payment providers would incur legal problems under the UIGEA by helping players deposit funds in accounts with unlicensed sites, it is perfectly legal for them to do so for those sites that have state licenses. Most poker websites that are licensed to operate in one or more US states accept payments in several common forms, including debit and credit cards, PayPal and bank transfers.
Do You Have to Pay Taxes on Online Poker Winnings in the US?
The somewhat vague standing of online poker in US law has led to many misconceptions about how winnings are taxed. Some US poker players are under the impression that their winnings cannot be taxed or that the government will not accept tax returns that list income from online gaming because of its somewhat questionable legal status. This, however, is an entirely incorrect line of thinking. All gambling winnings must be reported for federal tax purposes. In addition, the state in which you are playing may require you to pay taxes on your winnings.
Finding Legal US Poker Sites
Owing to the regulatory climate produced by the UIGEA, there aren’t a huge number of poker websites that provide gaming services to American players. Luckily, there are a few fairly large and reputable companies that have been able to reenter the US market as licensed sites. Among these is 888Poker, a major international online poker platform. 888Poker is licensed in New Jersey, where residents can access and play it without any legal difficulties. Another major platform, PartyPoker, has also managed to secure a New Jersey License. Per its website, PartyPoker is also working to acquire licenses in Delaware and Nevada in order to make online poker accessible to more American players.
What Are Your Options if You Live in a State That Doesn’t License Poker Websites?
Needless to say, the current system of American law regarding online poker sites can be very frustrating for players who don’t happen to live in one of the few states in which they are fully legal. For these players, the best option is to play in a real-world casino. Casinos are fairly ubiquitous throughout the United States, and most of them have at least some poker tables available. Although it isn’t quite as convenient as online poker, playing in real life can help you sharpen your skills as a player.
One thing to note is that some poker players attempt to circumvent the legal framework by accessing US poker sites that are licensed in a state that allows online gambling through a VPN, or virtual private network. VPNs are meant to mask users’ IP addresses in order to make it seem as if they are accessing the internet from locations other than their real ones. VPNs are often used as an internet privacy and security tool, but a handful of online poker players have tried to use them to trick poker websites into believing they are accessing them from legal states. Though it may seem clever on the surface, this option isn’t a good idea on any level. Websites these days are fairly good at telling when users are employing VPNs, and the discovery of that fact can lead to account closure and the loss of your funds. If you can’t legally gamble online in your state, it’s better to wait for the laws to change and to do your gambling in a licensed casino in the meantime.
What About Free Poker Games?
The legal issues that seem to keep online poker in the United States down are exclusively applicable to real-money wagering sites. There are a virtually limitless number of sites and apps that let players enjoy free online poker without any real money being staked. These services are completely unregulated and are not subject to the terms of the UIGEA. Although they can’t be used to win real money, free poker sites can be useful tools for new players who are trying to get a handle on the game before playing it in a physical casino for the first time.
More General History of Poker in the United States
The United States is generally believed to have been the birthplace of poker, which appeared sometime in the early 19th century. America was also the country that first made poker a major tournament card game in the middle of the 20th century. As a result, poker has always been views as a principally American game.
During the very early days of online poker, America was also one of the countries leading the charge to adapt the game to the digital age. Prior to the passage of the UIGEA, online poker was commonplace in America, and many more sites than can now legally operate were active in the US market.