Monday, Jan. 5, 2009 - by Olivia T. Wang

Is Online Poker Legal?

This article should start by the traditional legal disclaimer that we are not endorsing or promoting online poker, just presenting information about it.

The question of online poker legality is often discussed as this is still a nascent industry and the laws have not followed as fast as the business. Ten years ago online poker did not even exist and five years ago it only started to emerge as one of the fastest Internet sectors.

So is online poker legal? The quick answer is yes, but it depends on who and where you are.

Is Playing Online Poker for money legal in the USA?

The United States is the biggest market for online poker so I will start with the USA. Additionally, most other countries will be influenced by what the American regulators decide.

The most important information in this article is that no one has ever been arrested or charged for playing online poker, and this is very unlikely to change. Some members of Congress are attempting to forbid Internet portals and banks to get involved with online gambling, but nobody is forbidding you, the online player from playing.

The Bush Administration passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. This law does not prohibit playing online poker. It only prevents banks from participating in money transfers involving online poker, but it is not yet enforced in the legal system.

UIGEA is a very controversial piece of legislation embroiled in technicalities and not yet fully enacted. For you the online poker player, the main impact of UIEGA is that you will normally be unable to use your credit card to make a deposit to a poker site. Fortunately, there are alternate methods for depositing cash.

You can use a number of third party payment systems to deposit or withdraw cash to or from each of the poker sites in our top ten list. For example, this includes e-checks, click2pay, neteller, bank transfers, visa gift cards, etc. The payment details available at each room are specified within the room reviews.

The Online Poker Legal framework is awkward

Because of the negative stance of American regulators, all online poker sites reside outside the United States in jurisdiction favorable to gambling and poker, such as Gibraltar or Antigua. American regulators cannot prosecute these offshore gambling sites.

The following states have in fact banned online gambling: Illinois, Indiana, Louisiana, Michigan, Nevada, New Jersey, New York, Oregon, South Dakota, Washington and Wisconsin. These anti-gambling laws are not directed toward the online players but online sites.

Such laws are based on definitions of gambling sometimes centuries old. Usually gambling is legally defined by the distinction between games of skill or luck. In some cases currently fought in court, some lawyers are challenging these old laws and hopefully the legal landscape should become clearer.

Ironically Louisiana is one of the States banning online poker even though the history of poker in the USA pretty much started there. One more time this is only affecting poker sites, not you the player and there are tens of thousands of people playing online poker in New Orleans.

To add to the confusion, some online poker sites have left the US market altogether and do not take US-based players anymore. The sites not accepting US players have chosen to do so in order to protect themselves against legal risk.

These portals are mostly publicly listed companies such as Party Poker, and management could face potential lawsuits from shareholders if it took such a huge legal risk against the US government.

This is why you can see in our list of recommended poker portals that some of then take US players and are marked with a US flag, while others do not and miss the flag.

Online Poker Laws in other countries

To summarize this section which covers the rest of the world, it is quite similar to the United States. Nowhere is it prohibited to play online poker. Each country is more or less in favor of online gambling. Some want to prohibit Internet gambling companies; others are legal paradise for such businesses.

Similarly to the USA, online gambling is one of most contentious of all Internet-based business markets in Europe. Europe is a melting pot of various laws within each country which must all fall under the umbrella of the European community, and this is no easy task.

In 2008, Germany passed a law banning online gambling except horse racing, but it is contested by a consortium of large gambling businesses arguing that it is against European law.

France is trying to protect the revenue stream from the State monopoly over gambling, but is embattled in a recent case questioning if its gambling laws follow EU mandates for free trade.

Holland has not yet settled its Internet gambling laws as different factions of the Assembly disagree if it should be entirely Government controlled or not.

On the other hand, there are a number of countries which encourage online gambling businesses with a supportive legal environment and attractive tax incentives. The most prominent ones are Antigua and Barbuda, Panama, Gibraltar and Costa Rica.