Shades of Legality: Navigating Legal Gray Areas in Online Poker
In an ideal world, there’d be no need to play online poker in an offshore market at all. Every legally licensed poker site would be flush with players from 52 states, sharing liquidity with the rest of the world. All stakes and variants would be catered for. Tournament fields would be massive and prize pools would be eye-watering.
The Reality of Online Poker Regulation in the US
The truth is, while efforts to regulate online poker state-by-state should be applauded and supported, regulated networks in the US still lack the critical mass of players to build a thriving poker ecology. We may get there one day as more states regulate and opt to share player pools. But until then many will choose to play in the offshore market, which is unrestricted by geofencing and can accept players from around the world. In fact, most Americans who want to play online poker have no choice but to engage with offshore markets because they do not reside in a state that regulates the game.
Legal Considerations for Playing Online Poker Offshore
We can’t advise that you also do this, but we can arm you with legal knowledge you might need, as we try to answer the spectacularly thorny question: “is it legal to play online poker in the offshore markets?”
Federal Law and Online Poker
First up, there is no federal law that prohibits playing on an unlicensed site. The Unlawful Internet Gambling Enforcement Act (UIGEA) targets operators and financial institutions, prohibiting them from “knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”
It has been used to prosecute online gambling operators – most famously the former owners of PokerStars and the now-defunct Full Tilt and Cereus Poker Network – as well as payment processors that have facilitated gaming transactions. There is nothing in its language that criminalizes the act of playing online.
Mostly, the federal government is content to let individual states write their own laws on gambling. And since the US Supreme Court defanged PASPA, the federal prohibition on sports betting, there is even less appetite for the feds to interfere.
State Laws and Online Poker
Broadly, states can be broken down into the following groups:
- States Targeting Illegal Operators: These states do not prohibit the act of participating in gambling as a player.
- States with Some Prohibition: These states have some prohibition against playing an illegal game but their laws do not mention internet gaming specifically.
- States Explicitly Banning Online Gambling: These states explicitly ban the act of gambling online.
The vast majority of states inhabit the middle ground, falling into the second category. In these states, we can assume that the act of gambling online is at least nominally illegal because generally all gambling is illegal unless authorized by the state.
Not only do these states’ laws not mention gambling online, but the laws they do have against illegal gambling have never been enforced against an internet player. No one has ever been prosecuted for gambling online, nor even received a single citation. Thus, it has not been tested in a court of law whether statutes that do not mention online gambling are robust enough to prosecute an online gambler.
Legal Gray Areas
It could be argued that the laws of these states are legally gray, especially if they do not have a regulated online gaming market of their own. It should be noted that operators who take bets from players where a regulated market has been established are defined as black market operators.
In all cases, states are far more concerned about targeting operators rather than players. The fact that they have not updated their laws to include online gamblers may suggest that they do not consider them to be targets for prosecution.
States with Explicit Online Gaming Laws
But what about states that have updated their laws to include online gaming? A handful have done so, but only one, the State of Washington, expressly prohibits the act of playing online. Simply “receiv[ing] gambling information by telephone, telegraph, radio, semaphore, [or] the internet” could theoretically land you in hot water in Washington.
Washington’s legislature amended the state criminal code in 2006 to include online gambling as a way to protect its tribal land-based gaming industry. Incredibly, it was made a Class C felony, which is punishable by three to five years in prison. For this reason, we recommend that you do not use offshore online poker sites if you’re based in the state.
Yet even in Washington, no one has ever been prosecuted for playing online, and the somewhat terrifying statute has remained unenforced since its enactment. That doesn’t mean it will not be enforced in the future, however.
Risks Associated with Offshore Online Poker Sites
Of course, there are other risks associated with playing on offshore sites. Most are licensed in jurisdictions like Curacao where consumer protections may not be as stringent as they are in the US. That doesn’t mean the site is out to stiff you. Most are decent businesses that want to do right by their players because, without them, they have nothing.
An online poker site that is thriving with lots of players is a sign that it is well-established and has a good reputation. That’s why it’s easier to spot a good online poker site than a good online casino.
But any business can be hit by financial difficulties. In a US-regulated environment, operators are required to keep player funds segregated from their operating costs by law. An offshore site may not be required to do this, for example, which means your money may not be safe if the business hits financial trouble. For that reason, it’s best not to keep your entire bankroll on the site for any significant period of time.
Recourse for Lost Funds
Should you lose funds, you may have little recourse to get them back. After all, it’s difficult to complain to authorities when you were doing something that wasn’t strictly legal in the first place – especially if you live in Washington.
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