So as I understand it after reading posts here, federal (and most state) law is vague as to whether or not online poker for real money is legal or not, but for the purposes of this post, I will assume that it is illegal, both for the players and the poker site.
My hypothetical question involves playing free poker online. What if you were to play an "online home game", where you had a private online poker room, say, on Full Tilt where you and your friends played for play money. The catch is that everybody agrees beforehand that they're buying in for $20. At the end of the game, everybody settles their winnings and losses offline.
For example, Bob, Tom, and John all buy in for $20 and get $20 in play money at the online poker table. At the end of the game, Bob has $35, Tom has $25, and John has $0. John would pay Bob $15 and Tom $5 offline. No money goes to or from the poker site.
Is this illegal? What if it all occurred within one state, and a state where home games are legal? Is the poker site where the game was played liable?
Thanks for answering--I've always been curious about online poker laws.