Is Online Poker Legal?

Online poker is one of the most popular forms of online gambling. Players can place real money bets and win cash prizes on various games. These sites are regulated by governments in an effort to prevent them from taking unmanageable risks with player funds. Some states also have specific laws against certain types of gambling activities. This makes it important for players to understand the laws in their jurisdiction before playing online poker.

While the federal government has made it difficult for some online poker operators to accept US players, several major operators continue to offer this game to Americans. Some of these websites are run by state-regulated casinos, while others are owned by private businesses or investors who want to make a profit from the popularity of the game.

Regardless of how they are operated, most major online poker sites invest the money that their customers deposit. This money can be used to pay prizes to winners, cover operating expenses or even to invest in additional casino games. While this form of risk-taking is illegal in some jurisdictions, it is an important part of the business model for many online poker sites.

The federal government cracked down on online gambling in 2011 with the indictments of several major poker operators, including PokerStars, Full Tilt and Absolute Poker. These actions were largely motivated by concerns over the Unlawful Internet Gambling Enforcement Act (UIGEA), which makes it illegal for banks to process payments to offshore online gambling operators.

Following the indictments, four states passed legislation to legalize and regulate online poker within their borders, with three of them signing an agreement to share liquidity pools with each other. This has allowed them to create a robust market for the game, while also protecting their own players from the dangers of offshore poker sites.

Pennsylvania and Michigan have already jumped through the hoops required to launch real-money poker sites, and West Virginia is expected to follow suit in 2021. However, California has not yet made online poker legal and is unlikely to do so until it passes a legislative initiative.

California lawmakers have made annual attempts to pass an online poker bill. But, each year, these proposals have failed to gain enough traction. A bill in 2019 would have imposed a five-year ban on “bad actors” that the federal government has targeted, but it was deemed too harsh by the legislative committee and died an early death.