Last updated on July 6th, 2016 at 11:44 am
Online poker could finally be making its way back to the US, with New Jersey gaining access to PokerStars following a successful five-day soft launch. After almost five years of a poker blackout across the states, the New Jersey beacon could be a shining light for campaigners. Five years ago US authorities served indictments suggesting PokerStars, Full Tilt Poker and Absolute Poker were not throwing straight die.
In the three years after the poker boom of 2003 ESPN began to broadcast Hold ‘Em’s most prestigious event, The World Series of Poker, in which participants in the tournament leapfrogged from 839 to 8773. The $10,000 knock-out main event, held every year in Las Vegas, was becoming a spectator sport after ESPN’s ever-more extensive broadcasting. And, thus, a previously underfunded and under-valued game solidified its international audience and exploded into the entertainment industry.
That very year, US Congress passed a bill which appeared to mark the end of online poker. The biggest players in the US market at the time, Party Poker, withdrew immediately. The digital card room paid an out-of-court settlement of over $100m in the assured hope of being reinstated as the king of online poker at a time when the law reverted. Other companies, such as Full Tilt, Pokerstars and Absolute, continued to serve the US market, sparking a landmark case in 2011. Arguing against a ban, the big three sites refused to shut up shop since the law never specifically mentioned online poker as a federal offence. It was, however, clear that no gambling website could accept payments “in connection with the participation of another person in unlawful internet gambling”. The ambiguity of the bill’s wording, according to Pokerstars and co, meant they would go on trading until specifically told to.
Both PokerStars and Full TIlt refused to blink until a law, later in 2006, made it a felony to play online poker – specifically – in the state of Washington. PokerStars pulled out without second thought, with Full Tilt hot on its heels. Both card rooms, however, continued to allow real money games in all other US States. This set the scene for the most important legal battle in the Texas Hold ‘Em’s long history. The game, even after an exciting transitional period of reignited potential, suddenly faced a very uncertain future. Another federal law, The Wire Act 1961, backed up the Unlawful Internet Gambling and Enforcement Act 2006 (UIGEA), by prohibiting the collection of funds intended for use in gambling by international or interstate telecommunication wires.
The indictment named eleven people, across three companies, on four charges. Within an hour and a half, PokerStars stopped allowing its US members access real money games and its players were refused access to their balances, in what came to be known as Black Friday. Brandon Adams, a professional player whose earnings exceed a million dollars, expressed his shock at the swiftness at which the card rooms had ceased to offer payouts to its customers. April 15 saw the US Department of Justice seize the biggest players’ domain names, effectively wiping them off the American map. The very next day, ESPN removed all PokerStars advertising from its poker section and a former US attorney called for an investigation into the poker powerhouse’s “political activities”.
As far as the US was concerned, these websites ceased to exist.
Adams, at the time, harpooned the companies for a complete lack of warning – especially considering the amount of money some players at risk. At the time, he told media reporters that some players “literally had millions of dollars in their online poker account” when they were seized by authorities.
A lot of poker players were, rightly, very angry. Since then, we’ve seen plenty of firsts that haven’t been quite the same. Daniel Negreanu done his first Twitch streams using play money and coaching sessions across the US have been stripped away from the rail and forced back into real life. The game appeared to move back into the home games that were popular before the monopolization of online poker. Strategies have, again, changed drastically as a result of the social climate. Players, like Negreanu have often complained how technology and its effects on society change the face of the game it impacts. But those of us looking to continue grinding while still refined to American borders, we may find ourselves restricted in any such endeavor.
Another federal court judgement in 2012 decided that poker was a game of skill, and not one of luck. The subsequent ruling has ensured that no single player has ever been arrested or convicted of playing online poker. This effectively made UIGEA a law directed at the way poker websites were banking – not the act of “illegal gambling”.
To this day, some smaller websites do allow sign-ups for American players. Across the US, people have also been using VPNs to hide the international calling card attached to their IP addresses. And yet the enforcement continues. In keeping with a closer attachment to technology, players soon discovered that using bitcoins, instead of traditional US dollars from their credit cards, could be a solution.
Of course, as soon as the viability of such a concept became apparent, hundreds of bitcoin focused casinos and card rooms cropped up across the internet. Regardless of whether or not it was illegal, the anonymity of bitcoin made playing poker a reality again. Many, too, began offering the same kind of generous sign up rewards offered by conventional sites – many again beating traditional offers.
At the time, however, the huge fluctuations in BTC meant the risk-reward was unstable. Persistent players, however, would find their profits were greatly increased by the volatile market, with the BTC rocketing in cost against the US dollar in recent years. Poker authorities would regularly warn against using these websites, since there was no protection against fraudulent attempts – but it was rife in the early stages. Should a bitcoin casino be shut down, its members would lose their funds, emulating the frustrations that were had with PokerStars and Full Tilt on Black Friday.
In any investigation into the legality of these websites, one common phrase pops up: gray area. And that is so. If, according to the judgment in 2012 that suggests poker is a skill game – and not one of luck – then UIGEA can only refer to the way in which banking is done and currency is transferred. So, subsequently, if the exchange of USD is removed from the situation and a new, currently unregulated and decentralized, currency is put in its place – who knows, it might just be legal.
As some websites point out, there are no US laws that say gambling with bitcoin is illegal, but there could be future traction for putting a halt to it should popularity continue to rise at its current rate.
The big game players of bitcoin casino and poker rooms are obvious to find on the internet. Popular websites will often have in excess of 30-40 cash players at any one time, which is more than you can expect from many live casinos across the world. It would be wise to suggest that players don’t keep too many BTC in their accounts and regularly transfer any winnings to an independent bitcoin wallet. In the unlikely event the website is closed down and you lose access to your funds, your losses will be minimised.
The dangers of playing online poker with bitcoin exist only in the protection that you receive as a consumer. For instance, if you used an American Express card to make a deposit to PokerStars, you would likely be protected by the card company’s insurance in relation to fraud. When purchasing items in an anonymous currency, you are not offered the same protection. Struggles between the US and those behind a new wave of crypto-currencies have seen regulation become a difficult pill for both sides to swallow, though some ground seems to be underway.
US poker players should find some resolve in the ability to login to a bitcoin card room and hit the tables. Many even feature the same aesthetics as some of our favorite poker websites, as they’re powered by the same technology. In essence, it is unlikely that US authorities will be looking to target any individual cases of grinders playing with BTC.
Most, which operate outside the US, claim that local gambling laws do not apply to them, considering their global gambling licenses. And it’s a fair argument. Just because a business accepts clientele from any specific country does not necessarily mean it is operating within or out of it. There is, however, no reason to think that a BTC casino without a gambling license in your country is somehow worse or shadier than anywhere else – gambling licenses in all jurisdictions are only offered under strict guidelines. While nobody will ever be prosecuted for playing online poker, it seems a safe bet that BTC could be a wise investment.
Note: This article represents the opinion of the writer alone. Do not look at this article as expert investment advice or anything other than a personal opinion.