Florida Poker Law

Currently under Florida gambling laws, the only poker that is expressly legal is poker games at the licensed cardrooms and "penny-ante" home games. A literal reading of current Florida law shows any other forms of poker play to be illegal, both for the persons laying the game and for the players, including play on the Internet. The nuances of the wording of the laws have not been tested in court - no one is raiding social home games or arresting Internet players - so we don't know if the courts would support such strict application of the law. There are five legal issues of import for poker in Florida.

1. Federal Licensing Option

The current bills being considered by the U.S. Congress to license and regulate Internet poker at the federal level include an option for each state to opt out of the program. This is a necessary provision on the federal level to preserve states rights. A state which opts out of federal licensing can still implement their own legislation to legalize Internet poker, such as a state licensing program. As players, we want to ensure that Florida does not opt out of a federal program, unless there is a state licensing program which allows equal access to in-state, out-of-state and foreign-based sites.

2. Uncapped Poker

As of July 1, 2010, all betting caps and limits were removed from Florida statutes and the games offered are now at the discretion of each cardroom operator. This was a great victory for poker players and Florida is fast becoming one of the biggest poker destinations in the world.

3. Florida State Licensing of Internet Poker

This bill would create one Florida iPoker network, operated by up to three licensed Hub Operators (poker sites). The existing Florida cardrooms would become affiliates of these Hub Operators. Players accounts can only be created by one of the cardroom affiliates, as a portal to the state iPoker network. Play would only be available to players physically located within the state of Florida, and of at least 18 years of age.

By limiting operations to one network and just three hub operators competition will be very limited, to the detriment of the player experience. Instead, we want to allow any company that meets the technical and consumer protections qualifications to be licensed as a Hub Operator and allowed to run an iPoker network in Florida. Below is a sample Florida ballot initiative for Internet poker. Although the attempt would be to accomplish a state licensing program through legislation rather than this ballot initiative, the initiative below lays out a framework for accomplishing sensible legislation that creates a competitive marketplace in Florida and allows Florida cardrooms to compete internationally when cross-border iPoker from the U.S. becomes a reality.

Florida Ballot Initiative for Internet Poker

FULL TEXT OF PROPOSED AMENDMENT: BE IT ENACTED BY THE PEOPLE OF FLORIDA THAT:

WHEREAS, Florida has a tradition of regulating the game of poker; WHEREAS, the citizens of Florida currently have access to foreign-based Internet poker without State regulation for consumer protection, underage participation and responsible gaming; WHEREAS, regulated cardrooms in Florida have always been a source of revenue for Florida; NOW, THEREFORE, to provide protections to the people of Florida and revenues for the State of Florida, the citizens of Florida hereby amend Article X of the Florida Constitution to add the following as Section 28:

(a) Internet Poker. The participation in and playing of the game of poker, and the provision of services related to such activity, on the Internet or any similar communication medium by any person within the borders of Florida shall be deemed lawful and not a violation of any law of the State of Florida provided that the player is of the same age required for play at licensed Florida cardrooms; that the Internet poker operator is licensed and regulated to the same standards as licensed Florida cardrooms for consumer protections, underage participation and compulsive gaming; and the player uses for any transfer of money to the Internet poker operator for the playing of the game a financial services provider that is licensed by the State of Florida for such transactions.

(b) Licensing. Internet poker operators that offer services to persons located in Florida pursuant to this section must obtain or already possess a license issued by the State of Florida or by a regulatory body in another jurisdiction that has standards governing licensing probity, honesty and integrity of the games, security and internal accounting controls and dispute resolution. The Florida Department shall be responsible for implementing and monitoring compliance with the provisions of this section including the licensing of Florida Internet poker operators, the recognition of licenses of existing Internet poker operators outside of Florida, and the licensing of financial services providers to provide transactions to and from Internet poker operators.

(c) Regulation. The Florida Department shall devise a set of criteria for licensing and regulation of Florida Internet poker operators and of financial services providers that must have in place procedures for protections against consumer fraud, money laundering or any other illegal use of the financial services; for ensuring money is being transferred only to those Internet poker operators which are in compliance with this section and provide consumer protections, prevent underage participation, and provide protections for those who suffer from compulsive gaming; and for proper reporting of transactions required for Florida and Federal tax purposes. The Florida Department may also grant a license to any licensed Florida cardroom to act as a financial services provider for transactions to and from Internet poker operators pursuant to the same criteria.

(d) Revenues. Any financial services provider issued a license pursuant to this section shall make payment to the State of Florida of 5% of any money transferred to Internet poker operators for the purpose of playing poker initiated by persons located in Florida at the time of the transfer, up to a maximum of $500 per transaction. This fee cannot be deducted from the amount of the transfer by either the financial services provider or the Internet poker operator, nor can the person initiating the transfer be assessed any transaction fee for such transfers by the financial service provider or the Internet poker operator. The Florida Department may assess reasonable fees for any license issued under this section to cover expenses incurred for the implementation of and operations under this section.

(e) Players and Limits. Internet poker operators are not required to restrict players located in Florida from playing with or against players in any other locations. The State of Florida does not impose any restrictions on Internet poker operators as to stakes, betting limits, deposit limits, poker games offered and other similar options to players located in Florida except as part of any program for the protection of those suffering from compulsive gaming.

(f) Taxes. As poker is a zero sum game, gains and losses by playing poker would never be considered taxable income or deductible losses for tax purposes in Florida.

(g) Definitions. For purposes of this section, the following words and terms shall have the stated meanings:

“Poker” means any of various card games in which the players in turn make tactical bets or drop out, the bets forming a pool to be taken either by the sole remaining player or by those remaining players who hold a superior hand according to a standard ranking of hand values for the game.

‘Internet’ means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire, radio or similar methods.

“Internet poker operator” means an Internet site through which a bet or wager is initiated, received, or otherwise made with respect to poker played on the Internet site, whether transmitted by telephone, Internet, satellite, or other wire or wireless communication medium.

“Florida Department” means the agency of the government of the State of Florida which is charged with the licensing of Florida cardrooms.

“Financial services provider” means any entity which has been licensed by any State or is subject to regulation by the Federal Government as a credit card issuer, financial institution, operator of a terminal at which an electronic fund transfer may be initiated, money transmitting business, or international, national, regional, or local payment network utilized to effect a credit transaction, electronic fund transfer, stored value product transaction, or money transmitting service.

“State” means any State of the United States, the District of Columbia, or any commonwealth, territory, or other possession of the United States.

(h) Legislation. In the next regular legislative session occurring after voter approval of this amendment, the Florida Legislature shall adopt legislation to implement this amendment in a manner consistent with its broad purpose and stated terms, and having an effective date no later than July 1 of the year following voter approval. Such legislation shall include provisions for administrative enforcement; civil penalties for violations of this section; and the requirement and authorization of agency rules for implementation and enforcement.

TITLE: PROTECT FLORIDA CITIZENS WHO PLAY INTERNET POKER.

SUMMARY: To require licensing and regulation of Internet poker for the citizens of Florida which provides consumer protections, prevents underage participation and offers protections for those suffering from compulsive gaming. Also provides the State of Florida with revenues from all deposits made by players located in Florida to Internet poker operators.

4. Charity Poker Tournaments

Under current Florida law, poker tournaments held outside of a licensed Florida cardroom as a fund-raising activity for charitable organizations are unlawful, even when there are no cash prizes and the prizes are donated. Under Florida law, the only gambling (which includes poker in Florida law) which is allowed for the charity fund-raising is bingo and a limited form of sweepstakes. Per the Florida Division of Pari-Mutuel Wagering:

This law was framed before the popularity and wide acceptance of poker tournament play. The law is rather outdated as there is no good reason to prohibit charity poker tournaments today.

5. Penny-Ante Home Games

Florida laws allow poker to be played in home games, as long as it is a "penny-ante" game, which is defined as a game "in which the winnings of any player in a single round, hand, or game do not exceed $10 in value." This $10 cap is rather outdated and no doubt makes most home game players criminals per the letter of the law. At the time of the framing of this law, this was probably a reasonable cap for a social home game. This cap should be raised to $100 per person max bet for a single hand in cash games, and a $100 limit per person for a home game tournament buy-in, which today are reasonable limits for a social home game setting.