The Unlawful Internet Gambling Enforcement Act is a 2006 law targeted at online gambling – the law bans banks and other financial institutions from dealing in payments related to “unlawful internet gambling.” The law doesn’t ban online poker outright – at least there’s nothing explicit in the law that bans online poker outright – but it is a vaguely worded law that has engendered a lot of confusion, not to mention anger, in the online poker world.
It’s also engendered law enforcement activity. UIGEA was the basis of the Department of Justice’s actions against three of the major U.S.-based online gambling websites earlier this year – the actions resulted in the Department Of Justice shutting down the three sites, freezing players’ accounts, and the Manhattan U.S. Attorney filing bank fraud charges against the sites’ operators (one of the sites, Full Tilt Poker, lost its license this morning as a result of the indictment).
Now the DC Lottery is getting into the online poker business – the AP reports today that within three months, if things go as expected, DC-based players will have access to low-stakes online poker and online blackjack, among other games.
Should the DC Lottery be worried that the DOJ will be coming for it? No. But it should be careful not to let out of District players onto the sites.
“The UIGEA only prohibits prohibited financial transactions,” says gaming lawyer A. Jeff Ifrah, founding partner of Ifrah Law and Crime in the Suites blogger, sounding like a lawyer. “And what constitutes a a prohibited financial transaction turns on state law. If it violates state law, it violates UIGEA. If it does not violate state law, then it does not violate UIGEA.”
State law – which is to say District law – allows the sites. In January, DC became the first US jurisdiction to legalize online gambling. (Other states have toyed with online gambling without it going anywhere – New Jersey’s legislature even passed a law allowing online gambling, but Governor Chris Christie refused to sign the bill.)
The DC Lottery’s proposed online gambling sites may be controversial for lots of different reasons, but the sites themselves won’t violate UIGEA, then – unless they allow a player outside the District to gamble on them, in which case the sites could violate the gaming laws in the state where the out of District player is located, bringing UIGEA into play.
But not any old entrepreneur can open an online poker site in DC. Under DC law, only the DC Lottery is authorized to provide willing gamblers the clicky pleasure of playing online poker. “So if number two came along and started offering the service, that would violate the law,” says Ifrah. In other words: it’s kosher for the DC Lottery to run some online gambling sites, but if you do the same you’ll violate DC law, and therefore you’ll violate UIGEA. And then the Feds might come getcha.
So how will this law affect the poker community? Not much, says Dave Behr, a poker writer, lawyer, and executive of membership-based online poker site RISE Poker. DC’s new law is a step in the right direction, but not the panacea that poker enthusiasts are hoping for since state-based sites mean smaller pots and fewer players, says Behr. “The community would prefer a federal solution.”
But wait there’s more: Legislation introduced last week by Rep. Joe Barton would explicitly legalize some nationwide online poker sites; the bill is popular in the online poker world, but only has 11 cosponsors so far.
But wait there’s less – top-less, that is: There is still no word on when topless poker – online or otherwise – will be widely legalized.