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5 Common Myths About US Internet Poker

25 April 2015, By:

Many of us don't have the time to fully study all the inner workings behind iPoker legalization and this has led to some misunderstandings among poker fans.

Below are five commonly held myths regarding U.S. iPoker legislation. We present this as a way to clear up some of the basics behind iGaming law in the country.

The UIGEA Made Online Poker Illegal

The most common misunderstanding among poker players is that the Unlawful Internet Gambling Enforcement Act passed in 2006, aka the UIGEA, makes online poker illegal in the United States.

The UIGEA actually makes it illegal for banks to process financial transactions related to internet gambling.

This means that they cannot process deposit or withdrawals from any type of gambling site, online poker or otherwise.

This became a major problem for sites such as PokerStars, Full Tilt Poker and Absolute Poker because they had difficulty in processing payments. Other unregulated sites still have problems to this day processing payments, limiting options of those gambling on unregulated poker sites.

The December 2011 Memo from DOJ Made Online Poker Legal in the US

Where as many are confused regarding the meaning of the UIGEA, there are just as many that are confused on the meaning of a United States Department of Justice memo released in December 2011 regarding the Wire Act.

The memo addressed a question posed regarding whether the sale of online lottery tickets across state lines violated the Federal Wire Act of 1961. The Wire Act was believed to apply to online gambling in all forms and that transmission of bets or wagers across state lines were in violation of this law.

The DOJ clarified this belief and stated that the Wire Act applied only to sports betting and not to other forms of internet gaming.

As a result of this opinion lawmakers in several states started investigating the issue of offering online poker and gambling games.

The DOJ memo merely clarified a point of law, but it did not make it legal. States must individually decide whether they want to legalize online poker.

All Online Poker is Completely Legal in Nevada, New Jersey and Delaware

Another misunderstanding among poker players is that since online poker was legalized in New Jersey, Nevada and Delaware, they can play on any site of their choosing. This is inaccurate.

The three states that have legalized online poker have done so only for online poker sites that go through a licensing process. Legal online poker sites in these states must be partnered with a live casino and go through the same process for a license as a brick-and-mortar casino.

As such, only licensed online poker sites in these states are legal to play on. The advantage to playing on a regulated site is that you have the same protections as if you were in a brick-and-mortar casino.

There's no risk of not being paid your winnings.

Legalizing Online Poker Makes Home Poker Games Legal

This is a funny assumption that has been floated by some in the past, but the reality is that online poker legislation and laws governing home game poker are completely separate.

Even if online poker is legalized, it does not necessarily mean you can play out of your home. This will depend on the laws of your state.

Approximately half of the states in the United States prohibit home poker games, aka social poker games, and these are governed under state gambling laws.

Any legalization of online poker would be under a separate category. If legalized, you could play online poker from your home but you couldn't have friends over to play poker unless they logged online too.

Congress Can Pass a Law to Legalize Poker and Solve the Problem

While the ultimate goal for many in the industry is to see online poker legalized at a federal level, such a law would not guarantee that online poker would be legal everywhere in the country.

Any law that would be passed by Congress would give states the opportunity to "opt out" of the law and continue to observe their own laws or pursue their own form of legalization.

One state has already chosen to opt out of any future federal bill. Utah passed a bill back in 2012 that officially opts the state out of any future bill passed by Congress.

It is also likely that some other states would chose to opt out of any federal bill. Not every state is open to iGaming legislation.

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