Details of the Proposed US Online Poker Legislation – Part 2.


Posted: September 18, 2012

Updated: September 18, 2012

The summary of the Reid-Kyl proposal and their effect on the American online poker, race betting and casinos – Part 2.

This is the second part of the summary of the much-disputed Reid-Kyl proposal to change online American gambling laws

You can read the previous article in: Details of the Proposed US Online Poker Legislation – Part 1.

The Internet Gambling Prohibition, Poker Consumer Protection and Strengthening UIGEA Act of 2012 (also known as the Reid-Kyl proposal) would continue authorizing online lottery ticket sales.

Off-track race betting would be subject to a similar regulation as online poker: individual states would have to decide on their level whether they want to allow it, with the option of losing this possibility if they choose not to vote about it.

At the same time, the draft would prohibit states from offering online games that “mimic casino or slot titles”. This is practically a ban on online casinos in United States apart from online poker rooms.

The bill also plans to continue balling American players playing online poker on international sites, including players in opt-out states. Playing on unlicensed sites will be explicitly outlawed with winnings subject to forfeiture.

The proposal also outlaws internet gambling cafes.

The bill would only give license to land-based casino operators and land-based poker gaming machine device manufacturers meeting certain criteria to start online American poker rooms for two years after it’s been ratified.

There’s a 15-month blackout period: no-one would be allowed to begin offering online poker during this time. This measure is allegedly to prevent “first mover’s advantage”.

Online poker sites that were up and running in the US after the Black Friday UIGEA act (such as PokerStars) would face a five-year ban, unless they prove to the federal court that there was no breach of federal and state laws in their operation.

Online poker operators would be subject to a 16 percent tax. 2 percent would go to the federal treasury, the remaining 14 percent would go to the individual licensing state or tribe.

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