On August 7, 2009, Senator Menendez introduced a bill in Congress which would legalize online poker.

Under the bill poker sites would be reviewed by the Treasury. Poker sites would have to submit financial information to apply for licenses which would be for five years. Poker sites would have to ensure under age individuals are prevented from playing and have to make sure taxes are collected. There would be a 10% tax on all deposits to poker sites. This tax would be split 50% to the US Government and 50% to the state where the player is located.

"Pulling Internet poker out of the shadows and into the light of the law, we have the opportunity to help our economy while protecting our families. By bringing these games of skill into the mainstream, we can generate billions in revenue for businesses and the Treasury during these tough times."

http://sports.espn.go.com/espn/news/story?id=4338365

A must read if you play online poker. Interesting snippets from the article:

"The legal ambiguity doesn't stop more than a half-million Americans from playing each month on sites such as PokerStars.com and FullTiltPoker.com."

"Last year, about 1.6 million Americans played at least one hand of online poker, according to numbers from PokerAnalytics.com, which mines and measures online poker data. That's about the same number of people who cross-country ski each year."

"PokerAnalytics.com estimates that U.S. players are generating $1 billion in revenue each year for the overseas online poker sites."

"At the forefront of those efforts [to oppose legal online poker] is Focus on the Family, a national Christian advocacy group based in Colorado Springs, Colo. [Their motto is] 'You can lose your house with the click of a mouse.'"

All of you playing online poker should know about a bunch of changes which have been happening over the past months.

First, the good news. Some of you might know, but Congressman Barney Frank has been an outspoken advocate of online poker for years now. He's tried to get through exceptions for online poker from the UIGEA during Bush's presidency but could not get a bill past the committee. Rep. Frank, who has been at the forefront of the bailouts now (he's the committee head for the House Financial Services Committee) has been in the limelight a lot recently. This is good because he's now putting forth a bill to repeal the UIEGA completely. Rep. Frank has openly told reporters this bill will pass in 2009 (it's scheduled for the first mark up June 24). If true this would open the flood gates for many new players from the United States.

More on the bill: http://www.casinocitytimes.com/news/article.cfm?contentID=173780

In the meantime, Party Poker has settled a long standing suit with the US Attorney's Office which is bad for online poker. Flash back to the days when Party Poker ruled--at that time Party Poker was sued by the US Attorney's Office because the US Attorney's Office said Party Poker was engaged in online gambling. Party Poker denied this, but now in 2009, they have accepted this ruling and paid a 105 million dollar penalty. In this agreement Party Poker accepts the fact that they legally offered "gambling" not poker to poker players. This is troubling because it sets a standard for potential other suits against other online poker sites such as Full Tilt and PokerStars.

The next sections of this are summarized from www.mattmatros.com (Matt is a full time professional tournament player and has been on during WPT final tables):

As you know, two years ago the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed into law Rep. Frist tacked it onto a port safety bill that had no chance of being voted down. The UIGEA, contrary to what many people believe, does not make playing poker online a crime. Instead, it disallows banks and other financial institutions from transferring funds to sites whose customers engage in unlawful wagering. What’s “unlawful” depends on a lot of things–first and foremost, on your state. For example, if you live in Washington state, you are committing a felony by playing a $5 Sit-N-Go online. Meanwhile, federal law is murky on the subject. At least a few very knowledgeable people will tell you that there is no federal statute prohibiting online poker. As far as I know, the federal government has never prosecuted anyone for playing online poker.

As of Monday, January 19, 2009, the controversial UIGEA has officially taken effect. It is now in the hands of individual financial institutions to deny what it deems to be illegal gambling related transactions. Although the UIGEA is not supposed to apply to lotteries, horse racing, and other legal forms of gambling, it appears that the reaction from many banks and credit card companies has been to simply flag any transaction related to gambling, legal or otherwise, and prevent such a transaction from going through. I guess it’s just not worth the banks’ time and effort to figure out which gambling transactions involve legal gambling, and which involve illegal gambling. This has already proven to be a problem in New Hampshire, where people can no longer buy lottery tickets online with credit cards. The state lottery director said this problem could end up costing the state a million dollars in revenue.

One more interesting item to not is that when the full regulations came out on how to implement the UIEGA they (the regulations) specifically discussed whether playing online poker would be illegal. It was determined that the players are not breaking any laws by simply playing online poker, it was just illegal to deposit or withdrawal any money to or from the online poker sites.


And on another note, here is some interesting news about Poker in Texas:

As of April, 3, 2009, the Licensing and Administrative Procedures Committee has passed through a Bill that would legalize the game of poker in Texas. The vote was 6-3 in favor of the Bill. The Bill is aimed at giving local communities the right to vote on whether to allow poker.

It is currently legal to play poker in Texas, but the house cannot profit from the games. Once the house or the dealers profit, the game becomes illegal. The new Bill would call for establishments to obtain poker licenses, and then to be taxed on their winnings.

If this passes, can you say legal cardrooms everywhere?

I wrote a while back the status of online poker in the US. Here's an important update which occurred today. First, some background. The Treasury department was scheduled to release on Nov. 1 the final regulations on how the UEIGA was to be implemented by banks. As you remember the UEIGA does not define "gambling" at all and because of that online poker, along with other games on the internet, were lumped into the possible prohibition of the UEIGA.

A while ago Rep. Barney Frank introduced a bill in the House of Representatives which would have forced Congress to define what gambling is in the UEIGA. That bill did not make it out of committee. Today a new bill written by Rep. Barney Frank was voted on by the same committee passed. The bill is H.R. 6870 and states that the Treasury department cannot implement any regulations under the UEIGA for anything except sports betting. This means if this bill becomes law, online poker will be exempt from the UEIGA and will be legal in any state which does not expressly prohibit online poker.

H.R. 6870 passed today so it now moves to the full House of Representatives. There are rumors that the bill might be tacked on to a must pass legislation in 2008. If that did happen online poker could be expressly legalized by the end of the year.

This is an important step in the political process if you play online poker. This could open up the gates of online poker again to the masses and we could see a huge main event at the World Series of Poker next year. If you play online or are interested in playing online you should write your Representative in Congress and tell them how you feel about this issue. You can do that here:

https://forms.house.gov/wyr/welcome.shtml

Or check out the Poker Players Alliance.
http://pokerplayersalliance.org/