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Old 08-05-2007, 09:54 PM
Berge20 Berge20 is offline
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Default Legislative Forum: Master Sticky

Welcome to the 2+2 Legislation Forum. Please take some time to review the information below to see if it helps answer some of your more general questions.

What is the Legislation Forum?

The Legislation forum is designed as a place to discuss and find information pertaining to legislative and regulatory activity that has a direct or indirect impact on poker. Most of the discussion focuses on recent federal changes in the United States law in this arena, but discussion at the state or local level is encouraged, as is anything relating to the topic across the world.

This is <u>not</u> a place to extensively disucss current political events or theory. The Politics Forum is the appropriate place for those matters and such posts will be moved there.

Some political discourse and discussion relating to poker legislation and advocacy tactics is necessary and allowed, just don't turn it into something that goes beyond that.

Tax questions are also directed here to some extent and we allow discussion on such matters. In general, if you have a confusing situation, please consult a professional tax advisor. 2+2 does not give any tax advice and anything you receive here is not to be considered professional advice.

What is the current legal situation of online poker in the United States?

The short answer is that, with a few exceptions, no one knows for sure.

At the Federal level there is no law that specifically addresses online poker. For many years now the DOJ and the FBI have maintained that the Federal law known has the WIRE ACT makes online poker illegal. This law, however, has been held by two Federal Courts of Appeal to apply only to sports betting. Also, the WIRE ACT itself only criminalizes the provider of the "gambling" service, not the individual bettor. Until and unless the US Supreme Court takes a case and overturns the decisions of these Courts of Appeal, it is therefore safe to conclude that no Federal law makes online poker illegal.

In the US, however, citizens are also subject to state law. A few states specifically make playing online poker illegal. Although no one has yet to be arrested under any such law, if you play online poker from one of those states, it is a crime.

Most state laws say nothing about playing online or about poker specifically. Virtually all states have laws against "gambling" outside of licensed Brick and Mortar casinos. Most states define gambling as wagering on a game of chance. A game of chance is usually defined as a game where the outcome is more dependent on chance than on skill. That is still an open legal question in most states, as is whether these general anti-gambling laws apply to the internet.

Further complicating the answer, in the fall of 2006, the United States passed legislation that significantly altered the landscape in the online poker arena. The SAFE Port Act included legislative language commonly referred to the Unlawful Internet Gambling Enforcement Act (UIEGA).

This law focused on halting the electronic transfer of money to gambling sites in relation to unlawful Internet gambling. It did not define "unlawful internet gambling" in any new way, however, instead it said unlawful internet gambling is that which was already illegal under any state or federal law. Subsequently, Party Poker withdrew from the United States market, as did many other smaller poker sites. Major electronic financial service companies such as Neteller found themselves in the middle of this and also withdrew from the market.

The legislation did nothing to change the status of internet poker players and did not focus any of its efforts on penalizing or criminalizing players. Rather, the measures focused on those companies that choose to accept and process financial transactions that are deemed related to illegal internet gambling.

Several major sites still allow United States players to play and there are methods for getting money into and out of these sites. Whether a site that only offers poker, and whether a money transfer to sites that only offer poker, are breaking this new law is a hotly debated question, and the answer depends on a lot of other questions involving individual state laws, foreign treaties, interstate commerce, and other issues.

Under the UIGEA, the United States has also issued additional regulations relating to this law. On October 1, 2007, the proposed regulations were published and open for comment. A discussion of the proposed regulations can be found here.

Throughout this forum you will find threads and posts discussing the ongoing debate over online poker's legal status. Until the Courts rule, or new legislation passes, however, the answer will remain (except in those few states where its a listed criminal offense) no one knows for certain.

You can find a slightly longer version, including some history and a bit more detailed legal analysis here: UIGEA Summary

What are current legislative measures relating to online poker in the United States?

There are presently several pieces of legislation that would alter current federal law as it relates to online poker. They range from attempting to exempt skill games from current law to efforts for full regulation and taxation of online gambling.

These measures are presently pending in the United States Congress. Thousands of bills are introduced each year and a vast majority never are even voted on by the instituion, so simply because measures are out there does not at all mean there is a change coming tomorrow.

There is some hope that the House Financial Services Committee hearing on this subject will be a precursor for legislative action and movement in some fashion.
[*] H.R. 2046, the Internet Gambling Regulation and Enforcement Act of 2007 introduced by Rep. Barney Frank (MA-4)
- Discussion on the Frank Bill
[*] H.R. 2610, the Skill Game Protection Act introduced by Rep. Wexler (FL-19)
- H.R. 2610 Discussion
[*] H.R. 2607, the Internet Gambling Regulation and Tax Enforcement Act of 2007 introduced by Rep. Jim McDermott (WA-7)
[*] H.R. 2140, the Internet Gambling Study Act by Rep. Shelley Berkley and Jon Porter
[*] House Financial Services Hearing: Can Internet Gambling Be Effectively Regulated to Protect Consumers and the Payments System?
- Financial Services Site with Video

- Discussion Regarding Hearing

How can I influence public policy in this area?

Many online poker players, both recreational and professional, have decided to work together to advocate for public policy changes since passage of the UIGEA. Efforts have been made in very structured manners with organizations and in more informal ways with grassroots encouragement.

One manner of influencing the debate is to contact elected officials that represent you. You can find a variety of different letters in this thread: Master Letter Thread

It is helpful to understand where your elected official stands on this issue and this post highlights key votes on Internet gambling: Analysis of voting records

There are also a number of replies that posters have received from their elected official on this subject posted in the forum. These letters range from very articulate responses with detailed reasons for their support/opposition to basic form letter responses that barely touch on the topic at hand. Please do a quick search for your representatives and see if a response letter has been posted.

Can we expect changes soon?

The legislative process in the United States is generally very slow. Changing laws generally requires significant energy behind a movement, grassroots organizations that can leverage votes and financial resources, politicians who strongly support you and are in a position to assist with more than their vote.

Efforts are underway, but by no means is anything certain or likely coming soon.

Even the regulations that are required to accompany the UIGEA have gone beyond the initial period of crafting, so while many expected those to be ready in late summer, everyone is still waiting.

How do my poker winnings impact my taxes?

Being successful at poker may have impact on the amount you owe the government in taxes. There are many various laws depending on what country you live in and any sub-division of governments within that country. No advice given on these forums should be considered formal tax preparation advice. Please consult a local tax professional if you are in a jurisdiction that taxes gambling winnings.

This thread has various links to some previous discussions on the topic and may be a resource to further assist in answering some very basic questions.
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