After the US Congress made funding online poker accounts illegal, publicly traded companies like Party Poker realized they were at huge risk, so they acted quickly to cut off all of their US players. Unfortunately, US players made up 80% of their customers. Private companies like Poker Stars and Full Tilt remained in business, but players and sites had to devise new ways to fund their accounts.
The entire situation was murky. US players weren't sure if they were breaking the law, and millions of casual gamers simply quit, while play continued on the European sites because online poker is legal in the United Kingdom and many other countries.
Further confusing the matter is that several poker sites have their headquarters located in places like Ireland, Costa Rica, the Isle of Man, and Antigua. US laws have no jurisdiction here, and yet the actions of Congress had a serious impact on these businesses.
Four years later in 2010, lobbying by the gaming industry and a players' organization prompted the US Congress House Financial Services Committee to pass HR2267, a bill that would legalize online poker in the USA as long as it is regulated. However, the same year the Washington State Supreme Court upheld a law that made online poker playing a felony.
In April 2011, the US District Court for the Southern District of New York brought a criminal case against Poker Stars, Full Tilt and Cereus (which runs Absolute Poker and Ultimate Bet). The Department of Justice seized their Internet addresses and froze bank accounts in 14 countries. These accounts not only hold money for the poker sites, but also contain the money of individual players.
I am not a lawyer, so depending on what country you live in, online gambling may be illegal. I am not encouraging you to play poker online. I am encouraging you to think about this case and what it means.
I believe people should have the freedom to make choices like whether they want to play poker online for play money or for real money. A few will become addicted to it, a few will become professionals at it, but the majority will simply play for fun as casual gamers.
Is some government regulation necessary here? Maybe so. We don't want children playing for real money online. Of course, you can make a reasonable argument that their parents, not the government, should be the ones to regulate their behavior. And no one wants online poker money channeled to terrorists. So there is room for reasonable regulation.
I do not know if all of the online poker sites always conducted business in an ethical manner. But what we can see from this case is that government interference and heavy-handed regulation in one country affected people and businesses in many countries. Businesses have failed because of it, and individual citizens have lost everything from an amusing activity to their main source of income.
Loss of personal freedom and loss of the freedom to conduct business is something we should all be concerned about.
(Several sources were used for this article, including this one on the early history of online poker. A three part series from ChicagoNow. And this article from the UK's Poker Player. This article on online poker at Wikipedia, and also one on US versus Scheinberg. And finally, here is a summary of HR 2267.)
(The pic is from www.graphicshunt.com)