Legality of Online Texas Hold'em in the US

Efforts for legalizing online poker in the US are on. But whether legalization will become a reality or not is a big question. A large number of Texas Hold'em enthusiasts gamble with offshore sites. As this does not protect players from unregulated sites, it puts their money at risk. This is one of the reasons why various lobbying groups in the US are pushing for a federal bill on internet poker legalization to be passed. Proposals to regulate the game have been submitted by the lobbyists. To understand the online Texas Hold'em poker legalization scene in the US, here is some information on related events that have taken place over the years.

Unlawful Internet Gambling Enforcement Act (UIGEA)

Unlawful Internet Gambling Enforcement Act (UIGEA) passed in the US in 2006 changed the online poker scenario in the country. According to the UIGEA, gambling businesses are not permitted to accept payments related to unlawful internet gambling activities. However, the activities that fall under unlawful internet gambling have not been clarified by the act.

After the announcement of the UIGEA, many well-known gambling firms started withdrawing from the US market. However, big poker rooms like Party Poker and PokerStars stood against the act as they considered it to be unfair. Nothing specific to poker was mentioned in the UIGEA, so, these poker sites continued to offer online gambling services to US players.

Federal Wire Act

The federal Wire Act was passed in the US in 1961. According to the act, certain types of betting activities are not permitted in the US. The Wire Act prohibits transmission of information related to online gambling through wires. Till last year, the US Department of Justice (DOJ) held the view that playing real money Texas Hold'em is not legal in the US under the Wire Act. However, in December 2011, the DOJ changed its position on the Wire Act. The DOJ announced that the Wire Act does not hold good for online poker. The act applies solely to online sportsbetting.

After the announcement made by the DOJ, several US states started preparing for adopting online poker regulations. Nevada is the first among them. New Jersey and Iowa will be following Nevada's foot steps.

Black Friday 2011

15th April, 2011 is referred to as Black Friday in the online poker industry. On this day, 3 leading online poker rooms were indicted by the DOJ with charges of money laundering and fraud. The poker rooms' operations allegedly violated the UIGEA, according to the DOJ. The 3 indicted poker rooms are PokerStars, Full Tilt Poker and Absolute Poker. About $3 million in assets was seized by the DOJ from these gambling firms. 76 bank accounts associated with these sites were frozen. Cases were filed against a few payment processors as well.

Among the three poker sites indicted by the DOJ, PokerStars managed to get back on its feet. Although the site closed its doors to US customers, it is still the leading online poker room in the world. Full Tilt Poker is struggling to re-start its operations after its license was cancelled by the Alderney Gaming Control Commission. The poker room landed up in serious financial and legal troubles after this. Full Tilt still owes money to its former players.

In October 2011, Full Tilt got an investor, Groupe Bernard Tapie. The French investment firm agreed to purchase Full Tilt with all its assets. Negotiations with the DOJ were made by the investor and the deal has been finalized. According to the deal, the DOJ will take over Full Tilt's assets. The investment firm will acquire Full Tilt's assets directly from the DOJ. Once the acquisition process is over, Full Tilt players are expected to get back their money.

Wire Act Announcement and Change in Texas Hold'em Scenario in US

After the Black Friday incident, several gambling firms moved out of the US market fearing adverse consequences. However, DOJ's Wire Act announcement in December changed the online gambling scenario in the US significantly. Poker enthusiasts believe that Texas Hold'em will be made legal in the US in 2012. In case this becomes a reality, hundreds of jobs will be created and state revenue will increase.