Katie Lark

Subscribe to Katie Lark: eMailAlertsEmail Alerts
Get Katie Lark via: homepageHomepage mobileMobile rssRSS facebookFacebook twitterTwitter linkedinLinkedIn


Wage Your Bets: Will Online Poker Return to U.S.?

Will the Government Help Bring Online Poker Back?

It was Friday, April 15, 2011, when the United States Department of Justice unsealed an indictment against the three largest online poker websites in the country. Full Tilt Poker, PokerStars and Absolute Poker were shut down that day, effectively ending the online poker industry and freezing all funds players had deposited or won, ESPN reports. A settlement was reached between all the parties in July 2012 when Poker Stars bought out Full Tilt and surrendered $547 million to the federal government. Poker remains a prominent form of entertainment on TV. Fans who sign up with Comcast at cable.tv can watch the World Series of Poker and other high-stakes tournaments.

The agreement may have paved the way for online to re-emerge in the United States, but not without Uncle Sam taking his cut of the pot.

The Harry Reid/Jon Kyl Bill

Online poker has not completely disappeared and and the popularity of mobile poker is on the rise, although real-cash and virtual payouts continue to be outlawed. Several states, including Iowa, Nevada and New Jersey, have considered legislation that regulates online gaming within their own borders. These developments brought together an unlikely duo of U.S. senators: Jon Kyl, R-Ariz., and Harry Reid, D-Nev. The pair drafted federal legislation regulating online gaming, which they had hoped to push through in the final weeks of the 2012 session; however, "fiscal cliff" negotiations, along with the deeply partisan environment in Washington, forced Reid to declare the bill dead until 2013. Reid and his Senate counterpart Dean Heller plan to revive the bill, as Kyl retired from the Senate in January.

Tax Revenues

The obvious motivating factor to the federal government legalizing online poker is tax revenue. ABC News estimates $4-$6 billion was wagered online for poker in the year prior to the three big websites being shut down. The American Gaming Association, a casino lobbying group, said those numbers would grow if federal standards were enacted, and could bring upwards of $2 billion per year in revenue to the U.S. Treasury. Opponents of online gambling argue that legalization is just another way to tax the poor, while feeding the appetite of gambling addicts.

Will U.S. Full Tilt Players Get Their Money Back?

This is still the million dollar question (no pun intended) with regard to the settlement between the Department of Justice and Full Tilt Poker. Forbes estimates that U.S. poker players had $150 million in deposits and winnings when the websites were shut down and their accounts frozen. The Justice Department has said it would use "some" of the settlement money to compensate the victims; those who had monies frozen with PokerStars were reimbursed last year, while Full Tilt's non-U.S. players have also been reimbursed. Jeff Ifrah, a lawyer who represented Full Tilt, said no definitive decision has been made by the government as of yet.

More Stories By Katie Lark

Sara Bird is a computer programmer working on her PhD in robotics. She loves talking about Higgs Boson, reading New Scientist and is getting tired of her thesis but is glad it is nearly done.