Court Rules Poker Is a Game of Skill, But …

Sunday Op-Ed: (Now What?)

by , Sep 16, 2012 | 8:00 am

A federal judge in New York shook the gaming world in August 2012 by ruling that poker is predominantly a game of skill and therefore not “gambling” under the federal Illegal Gambling Business Act (“IGBA”).

The editorial headline from the Christian Science Monitor was typical:  “Misdeal on Internet poker gambling:  A federal court ruling that poker is mainly a game of skill and thus not gambling could steer Congress down the wrong path of approving Internet gaming.”

The opinion is significant.  The IGBA was the most important remaining federal statute that could be applied to Internet poker, now that the Department of Justice has limited the Wire Act to sports betting.  And any court that wants to declare that poker is predominantly chance will have to deal with Judge Jack B. Weinstein’s detailed 120-page-long opinion.

But the impact will be less than most commentators think.  The decision deals with only one specific statute, the IGBA, and expressly states that poker is still illegal gambling under other laws.  And the decision is so weak in so many places, that it will probably be overturned, if taken up on appeal.

The case arose on December 9, 2011, when Lawrence Dicristina and his two partners were charged with running an illegal two-table poker club two days a week in the Staten Island warehouse where he sold electric bicycles.  The game was, naturally, Texas Hold ‘Em.  Dealers were paid a portion of the 5% rake of each pot.  Since the statute requires that there be five or more individuals involved in the gambling operation, it is safe to assume that the dealers were in addition to the three owners.  There was at least one waitress, who may, or may not, have been counted in getting to the required minimum of five.

This does not look like the big-time organized crime operations that the IGBA was designed for.  The statute was added by the Organized Crime Control Act of 1970.  Judge Weinstein emphasizes that there was no allegation this small-scale, literally back room poker operation had anything to do with organized crime.

The heart of the opinion analyzes the amount of skill involved with poker in general, including video poker machines, and no-limit Hold ‘Em in particular.  There are pages and pages of graphs and testimony.  There are studies showing that skilled poker players win more than unskilled ones.  Others prove that most poker rounds are not won by the player with the best hand, since most rounds end with all but one player dropping out.

But there is a question whether any of these were properly considered by the trial court.

Dicristina had asked the court to dismiss the charges “on the grounds that a poker room does not fall under the definition of an illegal gambling business” under the IGBA, “because poker is predominantly a game of skill…”  He also wanted the question of whether skill or chance predominates to be decided by the jury.

Judge Weinstein took evidence from experts, but then decided that “whether poker constituted gambling under the applicable federal criminal statute would be decided as a matter of law.”  He reserved the decision on whether the charges should be dismissed.

This resulted in a weird jury trial:  Jurors were not allowed to hear any of the evidence that poker was predominantly skill.  In fact, they were instructed that poker was gambling under the IGBA.  So, naturally, Dicristina was convicted.

Then Judge Weinstein went back to the evidence that he had excluded to decide whether, as a matter of law, poker is predominantly skill.  That standard requires the court to find that no reasonable jury could reach any other decision; a dubious proposition, considering the amount of information on both sides the judge looked at.

The IGBA turns state anti-gambling laws, which are usually misdemeanors, into a federal felony – if the business is big enough.  Besides having to have five or more people, it must do $2,000 in business in a day.  This is so the federal government has jurisdiction, under the questionable assertion that an illegal gambling business this big must have an impact on interstate commerce.

Judge Weinstein concludes that prosecutors have to not only prove that the defendants violated a state anti-gambling law, but that the business was involved in “gambling” under a separate federal definition. He focuses on this language from the IGBA:

“gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.

Judge Weinstein looked at that list of examples and decided that only the forms of gambling that are like pool-selling, bookmaking, etc., are what Congress wanted to go after.  Probably his strongest argument is the elephant in the mousehole doctrine:

The defendant points out that “Congress ‘does not, one might say, hide elephants in mouseholes.’  The question remains whether poker is an elephant or a mouse under the statute.

Poker is, for the purposes of this case, an elephant—or perhaps an eight hundred pound gorilla—that Congress would have been unlikely to ignore. The fact that card games like poker, pinochle, gin rummy, and bridge were so widely played by law-abiding individuals in noncriminal settings may explain its omission from the IGBA. As Sherlock Holmes would describe the clue, it is the dog that didn’t bark.

Of course, Congress also did not include blackjack as an example.  Judge Weinstein admits that maybe poker was not included because organized crime was not much interested in it in 1970.  And, of course, it has to be a gambling business, so the discussion of social card games is irrelevant.

Even with that list, Judge Weinstein has to find a way to justify not letting a jury decide.  For that, he turns to the doctrine of lenity.  This rule requires that prosecutors have the burden of proving an ambiguous criminal statute should be construed in their favor.

This decision is only binding in Judge Weinstein’s federal courtroom in Brooklyn.  On appeal, there are lots of ways it could be overturned.

First, there is the questionable conclusion that Congress created two separate standards for “gambling” under the IGBA:  A person could only be convicted if he violated state anti-gambling laws and also the form of gambling was similar to those on the list of examples.  A court could easily say those were just examples, and that Congress wanted to make sure that IGBA would be limited to illegal gambling and not, say, prostitution.

Second, the rule of lenity only kicks in if there is something ambiguous about the statute.  It is possible to read the IGBA as clearly making all gambling that is illegal under state law a violation of the IGBA, if the business is big enough.

And a court could rule that the prosecutors did meet their burden, of proving the IGBA covers all large illegal gambling.

But there is an even bigger issue:  How can poker even be gambling if it is predominantly skill?  All gambling requires chance, prize and consideration.  If a game is not predominantly chance, then it is not gambling.  Period.

Judge Weinstein is not saying that poker has so much skill that it could never be considered gambling.  Far from it.  He expressly states that poker is gambling under New York state law, and that Dicristina could have been charged under those statutes, or other federal laws.  He includes the Unlawful Internet Gambling Enforcement Act, which does not have a list of examples of gambling.  If poker violates New York state laws, then neither the operator nor the bettor can use the Internet to play the game.

Where this decision will have the most impact is in the partially incorrect perception that a senior federal judge ruled that poker is predominantly skill and not gambling.

That isn’t what he ruled.  But the impression will linger, and will help lawmakers in Congress and state legislatures carve out exceptions to their anti-gambling laws for Internet poker.

© Copyright 2012, I. Nelson Rose, Encino, California. All rights reserved worldwide.


Prof. I. Nelson Rose’s latest books, INTERNET GAMING LAW (1st and 2nd editions), BLACKJACK AND THE LAW, GAMING LAW: CASES AND MATERIALS and GAMING LAW IN A NUTSHELL (just published) are available through his website, www.GAMBLINGANDTHELAW.com.


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