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Is online poker legal in the United States? You might be surprised to learn that the short answer is yes. The game has had a long history in the USA with more ups and downs than a rollercoaster but it’s actually legal for people to play the game in nearly every one of the 50 states. The most popular variant of the game — No-Limit Hold’em — was actually invented in Texas and it’s become world-wide sensation. We take a closer look at the various nuances of the law below.

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Is Online Poker Actually Legal in the USA?

The short answer is yes but the longer answer is sorta.

It’s never been illegal to play online poker in the US (with the one odd exception of Washington State) but running an online poker site is more problematic.

The problem is that many of the existing gambling laws were never made to deal with the realities of borderless online gaming.

As mentioned above it’s always OK for players to take part in online games but it’s been much more difficult for online operators to accept payments.

Fortunately in the last five years there have been some positive steps in once again allowing poker back in it’s home country.

As of 2018 there were four states that had fully legalized the game and begun offering licenses to operators.

There are many more operators, however, that operate in a gray area of the law by keeping their home bases offshore in order to offer games to all Americans.

It’s led to a weird situation in the USA where there are effectively two types of online poker sites:

  • Fully legal (NJ, NV, DE)
  • Gray area (All 50 states)

There are pros and cons to each type of site. You should research the local laws in your state and act accordingly.

Did Online Poker Always Exist in a Gray Area?

The USA was actually ground zero for the online poker explosion of the early 2000s.

It helped that amateur poker player Chris Moneymaker won the 2003 WSOP Main Event for $2.5 million after qualifying on an online poker site.

That led to a rapid expansion of unregulated online poker sites and many millions of dollars being transferred back and forth as everyone and their mother tried to get in on the action.

With that much money moving around it was only a matter of time before the US government got involved. It didn’t help that the world wide web was still very much the wild west at the time and businesses were still figuring out best practices.

It all came to a head in two key dates that will live in infamy for US poker players:

  • Oct. 13, 2006 — Unlawful Internet Gambling Enforcement Act
  • April 15, 2010 — Black Friday

We’ll discuss both below.

What’s the Unlawful Internet Gambling Enforcement Act?

The Unlawful Internet Gambling Enforcement Act (UIGEA) passed in 2006 as an add-on to the SAFE Port Act, which was otherwise unrelated.

At the time the US government was worried about the rapid expansion of online gambling but wasn’t quite sure how to regulate it.

They decided to introduce a bill that was positioned to prohibit operators from accepting payments in connection with placing bets or wagers.

The problem with the bill is that offshore operators had ways of accepting payments that weren’t connected to US banks. Critics likened it to the unsuccessful effort to prohibit alcohol in the US in the 1920s.

UIGEA also had the unfortunate distinction of forcing all the publicly-listed online poker sites out of the USA.

The vacuum created by companies like partypoker leaving the USA market allowed private operators to control the market. The private operators were a mixed bag with some unscrupulous characters and others that were complete reliable.

Regardless the online poker market in the USA kept chugging along and offshore companies profited millions of dollars from the US player base.

The Department of Justice would return to the issue in 2010 with a much harsher assessment of the market.

What About Black Friday?

Black Friday is a colloquial term that online poker players use for April 15, 2010.

It was on that date that the Department of Justice seized the domains PokerStars, Full Tilt Poker and Absolute Poker/Ultimate Bet and effectively ended the long period of dominance by private operators in the USA from 2006-2010. It stopped the online poker industry in the USA cold.

That move effectively froze players bankrolls. Fortunately PokerStars was able to pay players back quickly thanks to keeping player deposits separate from operating expenses. That wasn’t the case with Full Tilt Poker, however, as the site had been mismanaged and didn’t have enough to cover all deposits at once.

That led to an excruciating period of time for Full Tilt players who had their account balances on Full Tilt locked for over three years. Eventually PokerStars stepped in, purchased Full Tilt Poker, and re-paid players in 2014.

It’s safe to say that poker players do not have fond memories of Black Friday.

What is Regulated Online Poker?

If Black Friday did have one silver lining it was that it helped lead to regulated online poker in the USA… for a few states, at least.

The first-ever fully regulated online poker site opened in Nevada on April 30, 2013, and several more quickly followed.

In the coming years both New Jersey and Delaware would follow suit and offer regulated online poker to their residents.

The results have been somewhat of a mixed bag with player pools representing a fraction of what they were prior to Black Friday.

Online poker is a game that’s best suited to global play and huge groups of players. Massive fields lead to huge prizes and never having to wait for a game.

Thus far US poker sites have been unable to replicate the success of online poker in the early 2000s but there are more and more states that are coming onboard.

The lack of good licensed options for most US players has led to the rise of so-called gray-market poker sites.

What Are Gray Market Poker Sites?

There are still sites that operate in a gray area in the USA.

Those sites operate entirely offshore, which makes it difficult for authorities to restrict them. It’s also unclear how much of an appetite there is for prosecuting said parties.

The current crop of gray market sites are far more sophisticated then the old ones but everyone should be cautious when they deposit money on an online platform. Ultimately it’s up to the individual player to decide where they want to play.

Sadly gray market poker sites are often the only game in town. It may be years before online poker becomes fully legal in all of the US (if at all) so some players don’t really have a choice if they want to play.

Interestingly sites are using more and more creative solutions to allow poker fans to play.

Some sites have utilized cryptocurrency in order to get around restrictions on taking real-money bets while other sites have employed lottery models where you’re not getting 1:1 real cash but the prizes to tournaments and cash games are real.

Poker game organizers have gotten creative in the real world as well. Some states are starting to offer poker clubs instead of casinos. The poker clubs skirt the law by charging admission or membership fees instead of the traditional rake, which is illegal to charge.

What About Play Money?

Play money poker (also known as social poker) is available for players across all 50 states in America and can be a decent way of learning the basics to the game.

In general play money poker isn’t the best way to learn poker because people play differently when there’s nothing at stakes.

Even $.01/$.02 games where the average pot is $.20 cents are generally considered a better way to learn the game.

Even worse many of the social poker games push micro-transactions on players where you are paying money for chips that have no real-world value. That's a poker game that you absolutely cannot win.

Cliff Notes on US Poker

There are a few recurring themes that everyone who plays online poker in the USA should familiarize themselves with:

  • It’s not illegal to play online poker.
  • Poker is fully legal and regulated in a handful of states but those sites struggle with attendance numbers.
  • There are a number of gray market online poker sites that are able to offer real-money poker thanks to creative payment solutions such as cryptocurrency.
  • Licensed poker sites and unregulated offshore sites each have their own pros and cons.
  • Carefully research online poker sites before signing up. Make sure they are listed on numerous sites before depositing real money.