The Future of Online Gambling Hangs in a Limbo

February 6, 2015 Updated: April 23, 2016

In 2006 Online Gaming took its biggest hit and faced its biggest challenge of existence yet. The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006 as a way to prohibit U.S. banks from processing transactions from illegal gambling businesses. When the bill was passed, there was not a single legal online poker site operating in the United States. Three of the websites were left operating in the United States out of the numerous that existed, and these too operates under quasi-legal constraints that squashed fund flows. The passing of the indictment resulted in the DOJ seized the US web addresses connected with those sites.

The indictment resulted in banks being stopped from processing any funds going in and out the online gambling websites, which meant that even if you played you would not get anything out if you won. This grim situation for the online gambling sites and community situation continued until April 14, 2011 when the Department of Justice seized the domain names of the last remaining large sites outright — a day dubbed as “Black Friday” by the poker community. 

The indictment took the control of these ONLINE gambling casinos which are usually regulated by state laws, and put the same control into the hands of the federal government since websites are under the preview of the Federal Government. This meant the states could not have a say until you had a powerful crusader in the Congress.

There were questions however, that everyone had ‘what about all the revenue that these sites generated’. Can the government ignore this huge flow fund? Was the federal law going to be allowed to come into the way of money in the biggest Capitalist Economy of the world? What about the democratic system that allowed people to earn in a rightful way? These and many more kept echoing in the halls of Congress and on internet blogs till 2014. Developments in 2014 have resulted in hopes being rekindled that 2015 will finally be the year that the Golden State (California) enters the market. AB 2291, SB 1366, were two bills that were submitted for consideration during the 2014 legislative session to legalize online poker in California.

Under these bills, only poker would be legal. Slots and other table games will not be permitted. Licensed sites will also be required to hold player funds in segregated accounts and they must put   technology in place to verify player age and location. However, a consensus could not be reached upon by the lawmakers and tribal interests, and both the bills were shelved. Should California legalize online poker, the  Unlawful Internet Gambling Enforcement Act would no longer apply to any businesses that secure a license. Online poker sites in New Jersey, Nevada and Delaware all accept payments from U.S. banks without any interruption. Legalization is the key for online poker in America. Once online poker is legalized and sites are licensed, they are no longer subject to the scrutinisation and restrictions of the UIGEA.


The Black Friday Episode brought to the light the fact that Legalization is of utmost importance in online poker. The episode left quite a few websites with insufficient access to funds to pay their gamers and some gamers remain unpaid to this day. This also highlighted the fact that you need legalization to protect players too, if any of these sites good have gone under, and left players without any way of legally claiming money since the websites were not under the preview of the state laws or the Federal Online Gaming and Government Laws.


The UIGEA also sounded the death knell for the companies that were operating the online gaming poker websites, as the USA is one of the biggest markets for these gambling websites.  This put the future of the Online Gambling in jeopardy and pushed back the momentum that online gambling had picked up by quite a few years. The companies did branch out to new lucrative markets in Asia, Middle East and promoted themselves more aggressively in Europe where there are still legal issues that are being ironed out. None of these markets however, can provide the kind of revenue generation that the United States can, with poker being akin to a sport. Asia does not possess the number of internet connections to even forward the online gambling cause let alone players. Europe has a more outgoing gambling culture and the Middle East too prefers to gamble for real. This leaves virtual gambling at the mercy of US lawmakers. The poker Players Alliance in the Unites States has been promoting its cause aggressively.


There is buzz in the US market that online poker sites will be legalized sometime in 2015 and will be ready to enthrall your gambling spirits, after-all till when can the revenue that is generated by online poker be ignored by the states, the lawmakers and people who run the country. Money coming through legal channels is the most wanted commodity in the front runner Capitalist US economy.


Online gamblers in California and the rest of the United States wait with abated breath as to what the outcome would be of the legislature and the legislative tussle that has now been going on for almost a decade. Online gaming has faced many hurdles but this hurdle seems to be its Armageddon. The indictment left people without jobs, players without entertainment, and banks with huge funds that the federal government freezed, which meant no-one could use them and above all a recovering economy was left without revenue which could have solved several of America’s problems.

Resolving this issue should be on top priority for Federal Lawmakers as unemployment is still a big agenda for the government and legalizing online poker would mean providing a huge surge of employment all over the country. The rest of the world will also watch the US with curiosity as whatever legal laws are enacted in America will be mirrored to quite an extent in the rest of the Online gambling approving countries. The future of online poker in America and California is directly linked to the future of online gambling in the world, and only a positive outcome can turn things around.