Internet Poker Freedom Act of 2013 / IPFA

The Internet Poker Freedom Act of 2013, or IPFA for short, was introduced in July 2013 by Texas Rep. Joe Barton.

Below is an overview of the sections worth talking about and cliff notes for each.

Sec. 102 – This states that operating an online poker site without proper license is illegal. The penalties for operating a poker site illegally is 5 years prison or one of the penalties listed under US Code 18. This varies – appears to be around 2 years and /or fines of $500 or less.

Sec. 103 – This section outlines the duties of the Office of Internet Poker Oversight. Their job is to review, qualify, appoint and oversee ‘regulatory authorities.’ The regulatory authorities are the ones that issue licenses to poker operators and vendors, as well as ensure they abide by the rules.

The Office will have be able to take authorization away from the regulatory authorities if they’re incapable of doing their job. In doing so licensees (site operators) will also need to stop operation, send funds back to customers, etc, until they receive (or are in the process of applying for) another license from a different regulatory body.

Sec. 104 – This outlines licensing and the process to being licensed. Here are the most important takeaways.

  1. Vendors that provide services to licensed poker operators will not need a license, so long as they have a certificate of suitability from a regulatory authority.
  1. Operators cannot accept bets/wagers from people in a state that prohibits (online) gambling. This applies to Indian tribes that prohibit online gambling too.
  2. The above point does not apply to Indian tribes (meaning that Indian tribe laws aren’t the same (or to be treated the same) as the state, unless it is).
  3. The secretary will need to notify the licensees and applicants of the Indian tribes in the state / area.
  4. The operator license will need to be from where their servers are located.
  5. Applicants will need to disclose who their organization is, business (model), criminal history, financials, etc, all of which will be used to qualify them. Criminal activity is not an automatic decline – they want to make sure the licensee isn’t a threat. They also want them to have or obtain business knowledge in running online gambling companies.
  6. Applicants are denied if they fail to disclose all the necessary information, have been convicted of a crime that resulted in a year or more of prison or is a delinquent tax payer.
  7. No person/company will be eligible for a license if they were convicted of accepting bets/wagers that were in violation of federal or state law. The ineligibility will terminate after 5 years from the date the first license was issued. So it’s not a permanent ban. The same holds true for applicants that purchases assets of a person convicted of breaking those laws. THIS APPLIES TO POKERSTARS TWO-FOLD.
  8. Operators will need to ensure that players are 21 or older, that bets aren’t being made from a location that prohibits said bets, that all related taxes are being reported, that players are verified, that fraud, money laundering, etc are being prevented and that the games are fair with no cheating. The bill refers to cheating as colluding, bots, etc.
  9. Game equipment must remaining within the territory of the USA.

Sec. 105 – This discusses enforcement. Licensees can be either suspended or have their licenses revoked. Only the secretary of the regulatory body is able to make these decisions. Licensees may be able to continue operating while appealing an action if they can persuade the court to agree. Operators will have 30 days to return funds if their license is revoked. Penalties can be as much as $250,000 for individuals and $750,000 for corporations.

Unlicensed operators will face fines as much as $1 million per day or equal to the amount of bets taken during the period in which the operator should’ve been licensed.

Sec. 106 – This covers responsible and compulsive gambling. Operators will be required to have information regarding responsible gaming, how to get on a self-exclude list and include options that allow customers to limit their deposits and/or playing. The regulatory body will keep a master list of all individual self-exclusion lists.

Players that continue to play while self excluded don’t have to be paid their winnings from the operator. Anyone delinquent on child support payments will be automatically placed on the self-exclusion list.

Sec. 107 – This section mentions that the bill cannot be construed to authorize operators to accept bets / wagers on any other form of gambling other than poker. That includes casino games, sports, lotteries, scratch tickets, bingo, etc. No credit card deposits are allowed, nor are poker parlors or clubs.

The rest of the bill covers the following items:

  1. You cannot get in trouble under other laws if you’re following the IPFA law.
  2. Cheating is prohibited. Software is mentioned, which may or may not include 3rd party hand tracking software or data mining.
  3. The IPFA won’t impact existing laws, except for “the provisions of this title shall supersede any provisions of the law of any State or federally recognized Indian tribe.”

View Other State Bills

Will the Bill Pass?

It’s unlikely. According to GovTrack.us only 11% of bills made it past the committee and only 3% were enacted between 2011-2013. They give this bill similar odds.