Why is PokerStars banned in US?

PokerStars, one of the world’s largest and most popular online poker sites, has been banned in the United States since 2011. This came as a shock to many players, as PokerStars had been a major player in the US market for years. So why exactly is PokerStars banned in the US? Let’s take a closer look at the history and reasons behind this ban.

The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 was the first major blow to online poker in the US. This law made it illegal for financial institutions to process transactions related to online gambling, including poker. This led to many online poker sites, including PokerStars, leaving the US market.

However, PokerStars continued to operate in the US through a loophole in the law. They argued that poker was a game of skill and not chance, therefore not falling under the definition of gambling. This allowed them to continue offering their services to US players.

In 2011, the US Department of Justice (DOJ) cracked down on online poker sites, including PokerStars, and charged them with violating the UIGEA. The DOJ also accused PokerStars of money laundering and fraud. This led to the immediate shutdown of PokerStars in the US and the freezing of their assets.

The fallout from this event was massive. Many US players were left without access to their funds on PokerStars, and the site’s reputation was severely damaged. The DOJ’s actions also had a ripple effect on the entire online poker industry, with other major sites like Full Tilt Poker also being shut down.

In 2012, PokerStars reached a settlement with the DOJ, agreeing to pay a hefty fine of $731 million. This was seen as a way for PokerStars to clear their name and potentially re-enter the US market in the future. However, the settlement also included a clause that banned PokerStars from operating in the US for at least two years.

Despite the two-year ban, PokerStars has yet to re-enter the US market. This is due to several factors, including the strict regulations and licensing requirements in individual states. Only a handful of states have legalized online poker, and even then, PokerStars has faced challenges in obtaining licenses.

Another major factor is the company’s past legal troubles. The DOJ’s accusations of money laundering and fraud have left a stain on PokerStars’ reputation, making it difficult for them to gain trust and approval from regulators.

Furthermore, the ban on PokerStars in the US has allowed other online poker sites to establish themselves in the market. This has created competition for PokerStars, making it harder for them to re-enter the US market.

In recent years, there have been some signs of progress for PokerStars in the US. In 2018, they were granted a license to operate in New Jersey, one of the few states that have legalized online poker. This was a significant step towards their return to the US market, but they still face challenges in obtaining licenses in other states.

In conclusion, PokerStars is banned in the US due to a combination of legal issues, strict regulations, and competition from other online poker sites. While they have made some progress in re-entering the US market, it is still uncertain when or if they will be able to fully operate in the country again. Only time will tell if PokerStars will be able to overcome these obstacles and regain their position as a major player in the US online poker market.