In recent months, the United States federal government has seized almost $8 million from financial institutions, saying that the money was the result of illegal online poker in the state of Washington. It is the latest signal that Washington is serious about cracking down on illegal gambling, and residents of the Evergreen State had better take heed.

Like it or not, online gambling (including online poker) is illegal in the state of Washington. The state legislature passed a law banning the activity back in 2006, but that law was challenged in the courts. While it was being challenged, residents continued playing and poker rooms, such as PokerStars and Full Tilt Poker, continued to accept wagers from those residents. However, in September of 2010, the state Supreme Court upheld the law, stating that it was constitutional. When that happened, it settled the argument: Online gambling (including poker) is illegal in the state of Washington. As a result, PokerStars immediately began blocking bets from Washington residents.

According to federal prosecutors in the state, though, online gambling has persisted since then. In recent months, they have seized funds in a variety of banks – including Bank of America, JPMorgan Chase, SunTrust and more – that were transferred from online poker rooms. According to Forbes, the largest forfeiture case involves $5.1 million seized from a man who had received a check of poker winnings from Arrow Checks.

According to the federal prosecutors, they have the authority to seize the funds because online gambling is illegal in Washington and therefore, by gambling at overseas websites, the Washington residents violated the federal Interstate Wire Act. That seems like a rather broad reading of the Wire Act, but even if they’re wrong, it’s just a technicality.

As I had said many times, there is no federal law banning online gambling (except sports betting). Therefore, gambling online is legal in the U.S. as long as it is not done in a state that bans the activity. Washington does have an online gambling ban. Therefore, even if the feds don’t have the legal authority to seize the funds and prosecute the offenders, the state government does. In either case, a law is being broken, which makes the money ill-gotten gains.

So I will say this now to be perfectly clear: I support legalizing online gambling everywhere, so people have the freedom to make their own choices about their money. However, I do not advocate breaking the law. If you live in a U.S. state that does not have a law banning online gambling, feel free to play. If you live in a state where it is illegal, such as Washington, do not gamble online.

Tags: online poker, PokerStars, Washington online gambling, Wire Act

This entry was posted on Friday, January 7th, 2011 at 10:34 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.