Online Poker: Legal or Not?

Neither of your authors is a lawyer, and the discussion that follows is not legal advice. Every jurisdiction’s laws are different, and court rulings can be superseded by later decisions. The information provided here may not apply to your circumstance. If you have any doubt as to whether online poker is legal where you live, seek com- petent legal advice from a licensed attorney.

Online Poker in the United States 

Is it against the law to play online poker while in the United States? The United States federal government would like you to think it is, but the only relevant case was decided against it. The Federal District Court for the Eastern District of Louisiana found that the Federal Interstate Wire Act, which outlaws sending or receiving sports bets over a 

wire-based communication medium, didn’t apply. Here’s the part of the Wire Act the court considered most relevant: 

The Wire Act, found at 18 U.S.C. §1084 provides in pertinent part as follows, 

(a) Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire com- munication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under his title or imprisoned. 

The Department of Justice’s argument boiled down to the assertion that the word sport- ing only modified the word event and not the word contest. Under their interpretation, betting of any sort over a phone line or telegraph service would be illegal. The court dis- agreed with the Department of Justice’s semantic juggling, however, 

The defendants argue that plaintiffs’ failure to allege sports gambling is a fatal defect with respect to their Wire Act claims, while plaintiffs strenuously argue that the Wire Act does not require sporting events or contests to be the object of gambling. However, a plain reading of the statutory language clearly requires that the object of the gambling be a sporting event or contest. Both the role and the exception to the role expressly qualify the nature of the gam- bling activity as that related to a “sporting event or contest.” A reading of the case law leads to the same conclusion. 

As the plain language of the statute and case law interpreting the statute
are clear, there is no need to look to the legislative history of the Act as argued by plaintiffs. However, even a summary glance at the recent legislative
history of internet gambling legislation reinforces the Court’s determination that internet gambling on a game of chance is not prohibited conduct under 18 U.S.C. §1084. Recent legislative attempts have sought to amend the Wire Act to encompass “contest[s] of chance or a future contingent event not under the con- trol or influence of [the bettor]” while exempting from the reach of the statute data transmitted “for use in the news reporting of any activity, event or contest upon which bets or wagers are based.’” Similar legislation was introduced in the 106th Congress in the form of the “Internet Gambling Prohibition Act of 1999.” That Act sought to amend Title 18 to prohibit the use of the internet to place a bet or wager upon “a contest of others, a sporting event, or a game of chance…”. As to the legislative intent at the time the Wire Act was enacted,
the House Judiciary Committee Chairman explained that “this particular bill involves the transmission of wagers or bets and layoffs on horse racing and other sporting events.” 

Comparing the face of the Wire Act and the history surrounding its enactment with the recently proposed legislation, it becomes more certain that the Wire Act’s prohibition of gambling activities is restricted to the types of events enumerated in the statute, sporting events or contests. Plaintiffs’ argument flies in the face of the clear wording of the Wire Act and is more appropriately directed to the legis- lative branch than this Court. [Internal citations and footnotes omitted.] 

The government appealed the ruling to the United States Court of Appeals for the Fifth Circuit, which also found against them. With specific regard to the Wire Act, the appeals court wrote: 

The district court concluded that the Wire Act concerns gambling on sporting events or contests and that the Plaintiffs had failed to allege that they had en- gaged in internet sports gambling. We agree with the district court’s statutory interpretation, its reading of the relevant case law, its summary of the relevant legislative history, and its conclusion. 

The appeals court further found that “[b]ecause the Wire Act does not prohibit non-sports internet gambling, any debts incurred in connection with such gambling are not illegal.” 

So don’t think you can get out of your online poker debts by claiming the credit card companies have no right to collect a gambling debt. As the courts interpret the law, all you’re doing with your credit card is taking out a cash advance. What you do with the money you receive is up to you. 

Play online lettering, four aces and casino chips. Casino business advertising design. For posters, banners, leaflets and brochures.

Online Poker in Individual U.S. States 

According to the Fifth Circuit Court of Appeals, there is no national law on the books that prohibits non-sports Internet gambling. However, each state has its own gambling laws. The laws are too numerous and varied to discuss here, but you can find both a summary and the full text of each state’s gambling laws at www.gambling-law-us.com/. Chuck Humphrey, the lawyer who runs the site, specializes in gaming, business, securities and exchange, and venture capital law. 

It’s interesting to note that the laws are all constructed to prevent interstate gambling, but it’s OK for state residents to place a bet on a game run by a legal gambling operation based in that state. For example, it’s only legal for a Nevada resident to place a bet at an online casino that is hosted by a Nevada corporation. How convenient. 

Laws of Countries Other than the United States 

As with individual U.S. states, keeping track of the gaming laws in foreign lands is a full- time occupation. Even the U.S. government’s General Accounting Office (GAO) had a hard time figuring out where online gambling was legal, as noted in a 2002 GAO report: 

For example, gaming laws in many countries, like those in many U.S. states, apply to gaming in general rather than to Internet gambling. Although we were 

unable to determine the exact number, an interactive gaming industry services group reported that over 50 countries and foreign jurisdictions, mostly in Europe, the Caribbean, and the Australia/Pacific region, have legalized Internet gambling. 

You can find the full GAO report online at www.gao.gov/new.items/d0389.pdf. 

Conclusion 

Our best guess is that online poker is probably legal in the United States unless your state or locality has a law that prohibits you from placing bets over the Internet. Other countries’ laws depend on each nation’s court and judicial system, so it is your respon- sibility to check your local laws and, if necessary, get legal advice to aid your decision on whether to play or not. 

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