THERE IS NO FEDERAL LAW THAT MAKES PLAYING POKER ILLEGAL
Online or off line, playing poker cannot get you arrested by the Feds.
There are 3 older federal laws which some (including the Dept. of Justice - DOJ) argue make running poker games across state lines illegal. The most notable of the these is the 1960's Wire Act. The highest court to rule on the matter, though, is the Federal 5th Circuit Appeals Court which held that the Wire Act only applied to sportsbetting. Most lawyers think this opinion will stand. This, IMHO, is also why ALL of the prosecutions by the DOJ so far have involved only sportsbetting. None of the these Federal laws, however, make a criminal out of the player, even if they did apply to poker.
The UIGEA (unlawful internet gambling enforcement act) which passed in 2006 did not change poker's legality; it explicitly stated that it did not make any game illegal which was legal before. What it did do was make any gambling "that was already illegal under existing federal OR state law" the subject of a new penalty for the gambling site and require banks to not process any transactions that go to such illegal gambling. Since a gambling site is defined as one "in the business of betting and wagering" some poker sites believe this law does not apply to them since they neither bet nor wager. Maybe, IMHO.
Financial institutions are going to have to comply with regulations implementing the law, and are going to block transactions pursuant to the regulations. IF the regulations ever get written. Proposed regulations were posted (6 months late) for public comment and roundly condemned not just by us but by banks, consumer advocates, and the legal gaming industry. Hearings were held on the matter which also pointed out the futility of trying to determine which laws, if any, make playing online poker illegal. At this point, God only knows how long it will take for the regulations to become final, in whatever form. And they may never become final if the legislation introduced recently is passed. The mere anticipation of the regulations, however, has already led to much reduced options for financing online poker. And most people agree that the regulations as currently written encourage massive "overblocking" by the banks, which means blocking any transfer of money which might even remotely be labelled a "gambling transaction."
The real difficulty with the regulations and the UIGEA, however, is its reliance on state law to determine whether online poker is legal or not. State law, as will be extensively discussed in my next topic, is a true mish-mosh of laws such that, with the possible exception of just a few states that have clear laws making playing poker online illegal, NO ONE CAN SAY WITH ANY CERTAINTY WHATSOEVER WHETHER ONLINE POKER IS LEGAL OR ILLEGAL UNDER STATE LAW IN MOST STATES. Most state gambling laws never mention the word "poker" at all, and even more rarely the word "internet." And even the states that have such laws find them subject to challenge in court. So therefore its also true that no one knows for certain whether the UIGEA applies to online poker in most states. This why "overblocking" is such an important issue, and why the PPA continues to keep up the pressure on the regulators. The regulators themselves admit that figuring out exactly what online activity is illegal gambling under the individual laws of the 50 states is an impossible task. If they cant do it, neither can the banks and other money transfer services.
The fight as it stands now (06/08) is between our enemies who want the regulations to remain vague and our allies who want the regulations changed to name the specific illegal games. Our enemies figure that if the regulations stay vague, Financial Institutions will not cover the transactions of poker players out of caution (because they bear no penalty for a wrongfully blocked legal transaction, but may incur penalties for allowing an illegal transaction to go through). Our allies know that actually naming purported illegal games will by necessity vary from state to state, take forever to accomplish, and be subject to court challenge. It is hoped these difficulties will result in naming only online sportsbetting (clearly an illegal business under the Wire Act) as the ONLY activity to be covered by the UIGEA regulations.
Keep checking the PPA website for updates, and keep writing those letters to your representatives! They do make a difference.
Skallagrim