US Online Poker History - Events & Timeline

US Poker exists in a very complex situation, where state, federal, and international laws all have a role to play. Though the game has been on American soil since 1829, the online version is only about two decades old. It was born with the birth of Planet Poker in 1998. The name poker is believed to be a derivation of the French word "poque," which in turn is descendent of the German word "pochen" meaning to bluff. It was not until the late 90s that US real money online poker came to be.

Tracing the Growth of US Poker

In 1970, poker history was made when the very first World Series of Poker (WSOP) was held. During this year, Benny Binion invited seven of the very best poker players he knew to his Horseshoe Casino for a game of No Limit Texas Hold 'em in front of a live audience. The seven were Doyle Brunson, Johnny Moss, Carl Cannon, Brian "Sailor" Roberts, Amarillo "Slim" Preston, Crandall Addington, and Walter "Puggy" Pearson. Johnny Moss was declared winner by vote. The following year saw the tournament open up to players for a $5,000 buy-in, and in 1972 that had doubled to $10,000, which still serves as the buy-in today.

The Birth of Online Poker – The Late 90s

In 1997, the foundation of online poker was laid with the explosion of Internet gambling from only 15 gambling websites to about 200 online gambling websites. In 1998, poker legend, pro, and author, Mike "Mad Genius" Caro launched Planet Poker and online poker finally burst onto the scene. The first ever virtual poker hand was dealt to Randy Blumer on January 1, 1998. Planet Poker set an initial rake rate at about 5% or a max $3 rake cap, which has prevailed through the years and remains the industry norm today. The first real money poker game was Texas Hold 'em $3/$6. Unfortunately, Planet Poker quit taking real money bets in March of 2007 following the enactment of the UIGEA.

In 1998, Arizona Senator Jon Kyl introduced the Internet Gambling Prohibition Act (IGPA) to make it illegal for online gambling operators to offer US citizens online gambling services. It became apparent that the fight ahead of online gambling in the US would be long and tough, with lawmakers already trying to knock it down before it had firmly planted its feet. The bill failed to pass. As the year drew to a close, a global market research firm, Frost and Sullivan, reported that there was $834.5 million in revenue generated from online gambling in spite of primitive network technology, slow servers, and connectivity issues.

In 1999, Paradise Poker launched in Costa Rica, and it managed to outperform Planet Poker to become the industry leader. The poker site offered Texas Hold'em, Omaha, and Seven Card Stud. It also offered much improved software, customer service, and security.

Online Poker Survives Y2K

In May 2000, Dutch Boyd, a successful poker pro, launched Poker Spot, which offered the first ever online poker tournament. Later on, the poker site experienced the first online poker scandal, as players were left unpaid. According to Boyd, the system had no money because the credit card firm that was used to process deposits from players was unable to collect the deposits. Poker Spot was out of business by November 2001.
UltimateBet also launched in 2000 via some high-stakes poker players who preferred to be silent partners. The poker site offered No Limit Hold 'em, and for the first time, the average pot size was visible in the software lobby. The site hired Russ Hamilton to promote it, and his player sponsorship model is what you still find in use today, and he is responsible for bringing on the 11-time WSOP winner, Phil "The Poker Brat" Hellmuth.

The PartyPoker Era

In 2001, PokerStars and Party Poker launched. Together with Paradise Poker, the poker sites were powered by proprietary software that enhanced the games and made them easily accessible to dial-up and broadband Internet users. They became very successful and Paradise Poker led the industry throughout the year. Party Poker also began offering tournaments, and in the summer of 2001, their tournaments culminated on a cruise ship in the PartyPoker Million Cruise, which still sets sail annually.

By 2002, the first rumblings of US Internet gambling problems were heard. The United States Court of Appeals for the Fifth Circuit made a ruling asserting that the Wire Act of 1961 did not prohibit Internet gambling on games of chance. However, the Department of Justice opposed this ruling and made a public announcement that the Wire Act indeed applied to every form of gambling. At this time, poker was still considered strictly a game of chance.

In the same year, Paradise Poker began slipping, as it was yet to offer multi-table tournaments.  The World Poker Tour was televised by the travel channel, and Party Poker took advantage of this opportunity to promote itself. Overnight, there was a huge influx of players, and the poker site became one of the world's largest virtual poker rooms. It would remain in this spot until 2006.

Chris Moneymaker Makes Online Poker Anyone’s Game

2003 became another big year in the history of US online poker, as the game finally experienced a popularity explosion. This happened in the wake of the publicity that Chris Moneymaker garnered when he won $2.5 million and first place in the 2003 WSOP after entering a WSOP qualifier event held as a PokerStars satellite tournament with a $39 buy-in. Moneymaker solidified his place in the history of US online Poker.

Moneymaker's win inspired poker lovers from all over the world to sign up with PokerStars in hopes of also bagging the huge one, which resulted in an influx of traffic to PokerStars and the largest player base in the world. PokerStars skyrocketed to become the biggest online poker site in the world.

This new popularity was further reinforced by TV coverage of the WSOP by ESPN. In particular, a late night show was started, Poker After Dark, which popularized the game even further among Americans. The attention of true poker lovers had now been caught, and there was no looking back. Players started entering games through the virtual rooms in the thousands, and this was facilitated by their easy accessibility.

By 2004, the daily profit for Party Poker was over $1 million. Full Tilt Poker introduced famous poker pros as spokespersons and via widespread television advertising campaigns. It was an instant hit.

Online Poker Becomes More and More Taboo

Also in 2004, Internet gambling advertising is written off by search engines Google and Yahoo following the announcement of the US Department of Defense (DOJ) that the advertising of any kind of Internet gambling aids illegal gambling and was in direct violation of the 1961 Wire Wager Act.

By 2005, there was an estimated 55 million Americans playing online poker. The previous year already witnessed the purchase of the Horseshoe by Harrah's, and with it the WSOP rights. In 2005, Harrah's moved the series to its Rio Hotel & Casino where is has been held ever since.

Also in February of 2005, the North Dakota House of Representatives passed a bill that legalized and regulated online poker and poker cardroom operations in the state. Online poker operators were required to have their poker operations physically located within the state. About seven years ahead of its time, in March of 2005, the State Senate rejected the bill on the allegation that the legislation was in violation of the Federal Wire Act, which states that online gaming is illegal. Legal experts heavily disputed the DOJ's claim and a number of legal concerns were raised. Consequentially, many online poker operators halted the promotions of their "dot-com" poker sites via American media. Instead, they created the similar "dot-net" poker sites without real cash wagering.

The Year the Lights Went Out on Online Poker

In 2006, the WSOP Main Event saw a record 8,773 players compete for the $12 million first place prize. Jamie Gold bagged this prize. The tournament had come a long way from the seven players who first participated to double digits in 1973, and triple digits in 1982. It had grown to become a grueling week-and-a-half of non-stop play as poker players strived to be crowned champions. This number was the peak of the tournament and was the all-time high for WSOP, as the Bush administration was about to open Pandora’s box on the country's entire Internet gambling world with the infamous UIGEA.

In September 2006, the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed by the US Congress. In October, President George W. Bush signed the SAFE Port Act bill, which came with the UIGEA attached, into law. Unlawful Internet gambling as defined by the UIGEA is the act of transmitting wagers online. It makes transmission of funds between online gambling companies and American financial institutions illegal. The act makes no reference to operating an online poker site or playing online poker. It only relates to the act of processing Internet gambling financial transactions. However, it fails to define what constitutes illegal Internet gambling.

The impact of the UIGEA was negatively felt as the stock value of online poker companies took a dip, with some ending up shuting down altogether. In October, many leading poker sites including Party Poker, Pacific Poker, and Bwin were forced to shut down their US operations and stop accepting American players at their online poker tables. Real money Internet gambling became near-impossible as players had no way of funding their online poker accounts. A mass migration of American players to offshore poker sites began.

Some sites like PokerStars, Full Tilt Poker, and Bodog continued serving US players under the argument that the UIGEA did not apply to online poker as a game of skill and not chance. UltimateBet was sold to the smaller Absolute Poker and the merged sites continued serving the US market. These sites very quickly rose to become giants in the online poker industry that had by this point gone global.

The Coalition to Legalize Online Poker Grows

Post-UIGEA, Democratic US Congressman Barney Frank started lobbying for a legislation that would overturn the UIGEA. He was backed by the Poker Players Alliance (PPA).

Barney Frank's fight continued in 2008. His bill received a 32-32 vote with only one more vote needed to pass it. During this year, the UIGEA's repeal became a major political campaign topic for the likes of Republican Texas Congressman and presidential candidate Ron Paul. The future seemed brighter after all.

By 2009, another champion for the bill arose in Congressman Jared Polis, who stated, "The nail in the UIGEA coffin is the fact that the law doesn't prevent Americans spending over $100 billion every year on foreign gambling sites." He advocated for the pumping of the estimated $42 billion in tax revenue that would be generated from Internet gambling per decade into beneficial programs for American society.

In the same year, the requirements for the Poker Hall of Fame were changed to allow even nominees from the public. This was a move aimed at garnering more interest in the award from the poker community in an effort to make it more prestigious. Immediately, online poker rooms began to lobby for the acceptance of poker professionals. Mike Sexton of Party Poker was inducted into the Poker Hall of Fame. Of course he was well qualified, considering at the time he had an excess of $3 million in live tournament winnings, had reached 21 final tables in the WSOP, and had been serving as a World Poker Tour commentator since its inception.
2009 was also the same year of the creation of the International Federation of Poker in Lausanne, Switzerland, to promote poker as a mind sport. The federation became the official governing body of poker. On an individual player level, history was made when Patrik Antonius' won an $878,959 pot from Isildur1 on Full Tilt Poker. This was the largest pot ever won in an online game, and it was a clear indicator of the massive stakes poker pros were willing to gamble.

Unfortunately, 2009 was also the year the DOJ seized close to $35 million belonging to more than 27,000 online poker accounts. This was a shocking and unprecedented move, as the US government had never before targeted individual players for playing online poker.

On July 28, 2010, the House Financial Services Commission approved H.R. 2267 that was aimed at regulating and legalizing online poker within the US. Come September of the same year the Washington State Supreme Court approved a law that made it a felony to play online poker. This judgment unequivocally stated that "the statute prohibits Internet gambling evenhandedly, regardless of whether the company running the website is located in or outside the state of Washington. The effects imposed on in-state and out-of-state entities engaging or that would engage in Internet gambling are the same... The dormant Commerce Clause only prevents a state from discriminating based on whether the business is in-state or out-of-state."

On Nov 10, bill S490 was passed by the New Jersey State Senate, legalizing certain forms of online gambling. Companies operating within the state were permitted to take bets from online poker players residing in New Jersey.

Six Weeks in Online Poker: Black Friday to Blue Monday

On April 15, 2011, the federal government made a rash move against online poker, causing yet another upheaval in the already uncertain, but successful nonetheless, industry of online poker. The US Department of Justice (DOJ) indicted 11 executives associated with PokerStars, Full Tilt Poker, and Absolute Poker, the three largest poker rooms in the country. On this day, the aforementioned online poker sites were also shut down and their domains seized, as well as all US players’ accounts and funds, with the claim that the online poker sites were violating the UIGEA. This day came to be known as Black Friday. Of these sites, only PokerStars would be able to get back on its feet to remain a leading poker site in the world, though it no longer accepts US players.

One week later on April 21, Antigua Barbuda, a Caribbean island nation, filed a case to the World Trade Organization stating that the US’s move to shut down the online poker sites according to the Wire Wager Act is in violation of the international trade law. The WTO ruled in Antigua Barbuda's favor. There were a number of small online poker sites that go on with their operations and continue enhancing their software. Several of them partnered to form large poker networks.

Five weeks after Black Friday, on March 23, the Department of Homeland Security hit the market again by shutting down 10 more online poker sites. These comprise of most of the remaining online poker sites that were still serving US players and had failed to heed the Black Friday warning. The day came to be known as Blue Monday.

There was also a migration of many notable poker pros to Costa Rica, Canada, and the UK, where they could continue playing online poker. Senate Majority Leader Harry Reid also started his attempt to pass legislation making online poker legal at the federal level.

The Full Tilt Saga

In September 2011, the Alderney Gaming Control Commission suspended Full Tilt's license for a number of charges that had been filed against it. Following Black Friday, the company had not been able to pay their players off after being shut down by the DOJ. Furthermore, they were labeled a Ponzi scheme. Negotiations between several different entities to buy the brand in an effort to save it were futile. Finally, in 2012, PorkerStars purchased Full Tilt Poker. On November 6, 2012 Full Tilt Poker re-launched for non-US players.

Finally a Win for US Online Poker

On August 21, 2012 a New York federal judge made a ruling that poker does not violate federal law because it does not fall under games of chance but is instead a game of skill and strategy.

On November 15, 2012, the Nevada Gaming Commission gave its first online poker license to MGM.
On December 17, the window for getting a federal Internet poker bill to pass closed, as the lame duck session ended. This meant that federal regulation would not be happening in 2012 and probably not in 2013 either. Instead, state-by-state regulation would go on.

Caesars Entertainment received the license to operate an online poker site and casino in Nevada on December 21. The year ends as New Jersey appeared to be very close to legalizing Internet poker within its borders. Many believed Governor Chris Christie would sign the bill due to alleviate New Jersey’s bruised economy and a burning desire to beat Nevada at pioneering online gaming.

2014 may very well be the year that legal online poker in the US becomes a common thing, with legislation being passed by some states and others tabling bills for the same.

US Poker Timeline from 2006 to 2013

2006

June - An all time record 8,773 participate in the WSOP Main Event. The first place prize is a whopping $12 million, won by Jamie Gold.

September - the US House of Representatives and the US Senate pass the UIGEA.

October - President Bush signs the UIGEA into law. Party Poker, Pacific Poker, and Bwin stop serving US players.

2009

The US Department of Justice freezes over 27,000 online poker accounts and seizes over $35 million from them.

2010

November 10 - Online poker operators in the state of New Jersey are allowed to take bets from players.

2011

April 15 - The infamous Black Friday. The federal government seizes the domains of PokerStars, Absolute Poker, and Full Tilt Poker. Eleven online poker execs are indicted  and players' accounts are frozen too. Only PokerStars survives the year.

May 23 - Blue Monday. The feds shut down 10 more online poker sites serving US players.

2012

August 21 - Online poker is declared a game of skill not chance by a New York federal judge, thus, exempting it from the Federal Wire Act of 1961.

November 15 - Nevada grants MGM a license to provide online poker within the state.

December 21 - Nevada grants Caesars Entertainment a license to operate both a casino and online poker site within the state.

2013

February 23 - Nevada passes interstate gambling legislation to allow multi-state online poker play.

February 26 - New Jersey passes the online betting bill, which is expected to take one year for full implementation

April 30 - Ultimate Poker becomes the first legal real money online poker site in the US, though its operations are limited to Nevada.