UIGEA and Legal New Jersey Poker

UIGEA

Ask anyone in online poker about the darkest day in Internet gambling history and they'll tell you it was Black Friday. It was April 15th, 2011 when the Department of Justice shut down the big three online poker sites in the United States - namely PokerStars, Full Tilt, and Ultimate Bet/Absolute Poker.

But to us, the darkest day was actually October 13, 2006. That was the day that President Bush signed the Unlawful Internet Gambling Enforcement Act into law. With the stroke of a pen, the entire poker landscape in the US changed, setting the stage for a complete US shutdown of poker in the US five years later.

Everything you need to know about the UIGEA in 60 Seconds

  • The UIGEA was signed into law by President George Bush on October 13, 2006
  • The law made it illegal to process credit card transactions and other financial transactions for the purpose of illegal gambling
  • While the UIGEA excluded fantasy sports, it allegedly covered all other forms of gambling
  • However, the act never defined illegal gambling (and since the same gambling online takes place in land-based casinos, how can it be illegal?)
  • The UIGEA forced some publically traded companies out of the US market, including Party Poker
  • The parent company of UltimateBet was also publically traded, but they remained in the market by going private and being sold to the owners of Absolute Poker

About the UIGEA

The Unlawful Internet Gambling Enforcement Act prohibits gambling businesses from knowingly accepting payments related to restricted transactions. In a nutshell, it makes it illegal for companies to use restricted transactions for gambling purposes, and it ultimately makes it against the law for credit card processors and financial institutions to process transactions related to gambling.

Once the UIGEA was signed into law, a few companies bolted from the US market, including Paradise Poker and Party Poker. At the time, Party Poker was the world's largest online poker site. But their departure from the US meant that PokerStars would claim the number one spot.

Stars took the view that the law didn't apply since they were based outside the US. The World Trade Organization has also sided with offshore companies in the past, arguing that the US can't shut down a site based on their own set of laws. A few other sites, like Full Tilt Poker and UB, remained in the US market, operating from offshore but choosing to serve US players.

UIGEA and Black Friday

On April 15th, 2011, the US Department of Justice seized the domains and froze the assets of Poker Stars, UB/Absolute Poker, and Full Tilt. After a lengthy investigation, it was revealed that the three sites had violated the UIGEA by essentially controlling a bank in the United States and setting up fake websites where gambling payments were disguised as sales of golf balls, jewelry, and other fake goods.

After Black Friday, US poker players were left without a place to play. Many players saw their bankrolls frozen and seized by the US government. Few players blamed the sites. Many accused the government of acting in the interest of big-name Vegas casinos.

UIGEA Controversy

The act is controversial, not just among poker players, but among legislators. This wasn't a standalone bill. It was attached to the SAFE Port Act, which regulated port security. After it was passed, many legislators reported that they hadn't even read the UIGEA component.

Why the UIGEA is great for New Jersey poker players

The shutdown of poker in America of all the major offshore poker sites led a few states to realize that there was a major appetite for poker. While the UIGEA still applies, the federal government confirmed that the Wire Act only applies for sports betting. With that interpretation, the government of New Jersey drafted legislation to legalize and regulate online poker and Internet gambling in the Garden State.

Today, you've got lots of options for legit Internet poker in New Jersey. As a resident of NJ, you're one of the lucky Americans who get to play poker and not have to worry about your funds being seized or whether you're violating the law. So go ahead, read our reviews, discover a New Jersey poker room and get back to that pre-Black Friday feeling you've missed for so long.

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