Ever since the first real money online poker site, Planet Poker, came on the scene on January 1, 1998, Americans have played a significant role in the online gambling scene. Poker has always been pretty popular in the United States, and along with their widespread internet access, large population, and the disposable income to spend on gambling, online poker was a great fit.
Soon afterward, Paradise Poker joined them, and before too long another new site emerged on the scene, Party Poker, which would dominate the online poker world for the next few years, fueled by a large market presence in the U.S.
The early 2000’s saw a number of other prominent online poker sites emerge, including PokerStars, and in those early years online poker was nowhere near as popular as would later become. The big turning point was American Chris Moneymaker winning the main event of the World Series of Poker in 2003, being the first winner to qualify at an online poker site, at PokerStars, turning an $86 buy in into $2.5 million and instant fame.
Online poker exploded after this, especially in the United States, with Party Poker and Poker Stars leading the way. The next year, in 2004, another PokerStars qualifier, Greg Raymer, won the WSOP main event, propelling the online poker industry to even greater heights.
Between 2001 and 2005, online poker revenues grew thirty fold, from $82 million to $2.4 billion. Poker and online gambling were a perfect fit, as this combines all the excitement of gambling with a high level of strategy in seeking to outplay your opponents, there was always a game running, and the increased coverage of poker events by the media greatly inspired new players to take up the game.
American authorities weren’t idly sitting by during all this though, and there were some early efforts to try to stop or at least curtail their residents from partaking in online gambling and online poker.
The US Mobilizes Its Forces Against Online Poker
U.S. authorities weren’t just sitting by idly during this time, and even back when online gambling was in its infancy, efforts were underway to combat it, starting with the Internet Gambling Prohibition Act of 1999. This bill met with strong opposition from the lottery industry, who were looking to sell their tickets online, and the lottery is a powerful sector, and they made some extra political contributions and easily defeated this bill.
Since the early days of online poker, the U.S. Department of Justice had steadfastly maintained that the Federal Wire Act of 1961, which makes the transmission of bets on sporting contests across state lines illegal, also made online poker illegal, even though there really wasn’t a sensible way to interpret the law as ever applying to poker.
In 2002, when the matter finally came up in federal court, the court ruled that the Wire Act did only apply to sports betting and not to poker or casino gambling, but this ruling was simply ignored.
So they obviously weren’t going to get any convictions here in respect to online poker, but that didn’t bother them, as the Wire Act was still waived as a big stick toward online poker for several years afterward, and it took almost 10 years after this court decision for the Department of Justice to finally admit the truth.
Online Poker and the Scope and Force of U.S. Law
The United States sought to attack online poker on several fronts, starting with its own residents, who are clearly under U.S. laws. So they were told that the Wire Act made online gambling illegal for them to participate in, and they weren’t concerned that this was a legal opinion that had no legal force really, being based upon what amounted to a gross misinterpretation of the Wire Act.
It was the threat that mattered, and common folk aren’t up on federal laws or the goings on in federal court, so many simply believed them, so this was at least somewhat effective. Many may not have even been aware of all this going on, and it really wasn’t until the UIGEA that this all got a lot of media attention anyway.
Due to the nature of the internet though, it really didn’t matter what the law said, as it is simply just not practical to enforce laws against playing online poker. There just isn’t a good way to even catch anyone doing this. This is why there has never been a case in the United States of anyone ever being charged with playing online poker or any other form of online gambling.
There has never been any federal law prohibiting online poker in the first place, as the Wire Act and other laws are solely directed toward operators, so there isn’t anything on the federal government could charge anyone with anyway, although they don’t want you to know that, and will often insinuate otherwise, in an effort to deceive the public.
So we have a law that doesn’t apply to online poker, and it’s actually been directed against people and companies outside the U.S., to whom U.S. laws don’t apply in the first place. While countries do have extradition treaties, where people who commit very serious offenses such as murder or drug trafficking can be extradited, doing so with a resident of another country for offering online poker, where it is perfectly legal and even licensed and regulated, as about as far fetched as you could possibly get.
The United States has also sought relief through appealing to the World Trade Organization, claiming that the country of Antigua and Barbuda violated existing trade agreements, but the WTO ruled against the U.S. and determined that this country and other countries have a right to offer online poker to whomever they please, and fined the U.S. for their actions to try to stop it.
So in spite of a situation where we could say that U.S. authorities didn’t even have a leg to stand on, this has never deterred them from making bombastic and vacuous legal claims, and these claims have been fairly effective in misinforming people to the extent that they have been deterred or driven away from playing online poker, and therefore this has been somewhat of a success anyway.
The Era of the UIGEA and Black Friday
In spite of the UIGEA being a meaningless bill, you sure don’t get that impression when you look at how much this bill was trumped up in the media. It did cause a number of online poker sites to exit the U.S. market though, which was actually quite strange since U.S. authorities already maintained they were breaking their law by violating the Wire Act, and all the UIGEA did was add a further charge to this.
For the UIGEA to even be invoked, it was necessary to prove that the gambling in question was illegal in the first place, which meant essentially that these offshore operators had to be found guilty of violating the Wire Act first.
So for whatever reason though, the Wire Act didn’t scare them, but the UIGEA did. In addition, a lot of people felt that the UIGEA applied to players and a whole lot of them felt it applied to financial payment processors, both complete myths, but a lot of payment processors headed for the hills as well after this provision was passed.
Not all the major online poker sites were scared off by the UIGEA, and this resulted in PokerStars and Full Tilt Poker becoming the two biggest online poker sites in the world after their decision to stay on.
So the UIGEA did have some effect on the U.S. online poker market but nowhere near as much as U.S. authorities had hoped. It was much more difficult to process financial transactions with U.S. players, particularly in getting their withdrawals to them in a timely manner, but the poker sites were up to it for the most part.
The events of Black Friday changed things dramatically though, when the government got inside information on where these poker sites were hiding their money stateside, and hundreds of millions of dollars were seized. Full Tilt, Ultimate Bet, and Absolute Poker all went under from this, and while PokerStars survived, they ended up agreeing to finally stop doing business in the United States.
Where There Is A Will, There’s A Way
While many at the time predicted the death of online poker in the United States, at least until it became regulated there, there still was an appetite for it in the country, and there still were a fair number of online poker sites who were still prepared to serve the market.
It became even more challenging to process withdrawals to the U.S. after Black Friday though, but Black Friday was somewhat of a freak event, a one time opportunity at the sort of inside information that could bring even the biggest online poker sited down, but the surviving poker rooms now proceeded even more cautiously.
There were some further attempts of a lesser nature to disrupt their business, but soon afterward, the Department of Justice finally agreed that the Wire Act didn’t apply to poker, leaving them no real basis for legal action, even the pretentious variety that they had been practicing.
Online Poker in the US Today
Since then there have been 3 states which now have regulated online poker, where players can play freely and use pretty much whatever financial processor they please. These intrastate online poker rooms haven’t been anywhere near as successful as some hoped, and Delaware had to team up with Nevada in order to stay in the game, but things have gone fairly well, and more states are expected to join the party in the coming years.
There is a bill before Congress called the Restoration of America’s Wire Act, which seeks to modify the Wire Act to include more than just sports betting, but they have been foolish enough to take on the lottery industry again, and it was the lottery industry who caused the Department of Justice to change their opinion on the Wire Act a few years ago, so this is a group with very significant power, and this bill will very likely die off.
Whether or not it does, it really won’t matter anyway, as the offshore online poker operators would likely not care, and they stayed in the game even when the government still believed the Wire Act applied to them, but the most they can do is disrupt their business by looking to seize their funds, and these operators are wiser and more cautious these days.
A great deal of Americans continue to enjoy playing online poker today as they have throughout all of this, and the internet provides a level of freedom that is unprecedented, where even the government has very little say in what you do online. The only country in the world to successfully prohibit online poker is North Korea, simply because the people there aren’t allowed to have computers or the internet.
Since we do, there’s not much they can do to stop us from playing all the online poker we wish, and there will always be someone, somewhere, to help make this possible.