Upset about the revised scaled down plans the Foxwoods group offered for a casino in Philadelphia (which would be the second casino in the city), Pennsylvania revoked the group’s license.  For now, there are no plans to replace Foxwoods any time in the foreseeable future.  That said, big bucks have a way of making people see straight.  PLB is betting that Foxwoods has not crapped out yet and that some compromise plan will be agreed upon.

After an arguably much-deserved vacation, PLB is back.  PLB’s vacation involved a long drive down half of the eastern seaboard, only to turn around when Earl approached.  This meant that — twice — I had to pass sign after sign for Mohegan Sun, Mohegan Sun at Pocono Downs, Bethlehem Sands, Mount Airy, and Delaware Park, among others.  (Plus, I accidentally stumbled into a video poker room in North Carolina that doubled as a Philip Morris testing facility.  After seeing the people in there on a beautiful weekday I might have to reverse my stance on personal freedoms.)  All these billboards and the hours in traffic got me thinking.  How is the competition affecting games?  Are there too many places in too close a vicinity?  Is AC still the mothership?  (Got to be, right?)  These are questions posed here previously, but not since the poker rooms have been running full bore for some time.  Any thoughts from our loyal readers?  (Who I know, thanks to google, are out there.)

If you’ve been to Atlantic City in the, well, past 30 years, you know that the town is need of a massive makeover.  Heck, it needs more than touch-up work.  It needs to be gutted.  Enter Governor Christie to the rescue.  New Jersey just announced a total overhaul of the city, including who is in charge legally, who is in charge practically, a new direction, and a rededicated drive.

To be more accurate, NJ will be taking over just the gaming and entertainment district, not the entire city.  But for us non-residents, this is the part we are most concerned with anyway.  Among the changes are that the gaming/entertainment district will become its own city (albeit within the rest of the city of AC — think the Vatican), local police no longer will be charged with protection, garbage disposal responsibility will reside with the state, and gaming regulations will be updated to make them in-line with those of Nevada (i.e., looser).

These are much needed and long overdue upgrades for AC.  Hopefully it is not too late.  AC faces strong competition from every direction (except east, since it is on the ocean).  The new Pennsylvania casinos are a stone’s throw away, Yonkers has added slots, Mohegan/Foxwoods have expanded greatly recently, the Shinneock tribe soon will be getting a casino, and Delaware has broadened its gambling.  What none of these places have, however, is miles of beautiful beaches.  Vegas is hot, and so usable year round.  But AC has the water.  Granted it’s usable for only a few months each year, but the water should be made a major focal point of the destination.  People should want to fly to AC to wine, dine, gamble, and swim.  Water sports (surfing, windsurfing, paddle surfing, swimming, jet skiing, etc.), fishing, piers with restaurants/bars, etc. should be everywhere.  Every great military leader knows that you must use your environment to your advantage.  Atlantic City is under attack.  Use the water.

Some big things happening in the poker legal world. 

(1) Rep. McDermott (D-WA) unveiled a new bill that would tax online gambling.  8% of all deposits would be taxed with 6% going to state and tribal governments and 2% going to the federal government.  This is a tough call for poker players — pay the G-men and play legally or operate on the fringes and keep that 8%.  Here’s a thought that could help all poker players, the sites, and the government.  If this bill passes, maybe there will be more reload/deposit bonuses available.  That would enable individuals to minimize their taxable amount and the sites to increase the pool (and their rake).  And the government still to get taxes.  A win-win-win. 

(2) Pennsylvania is sending mixed signals.  On the one hand, the state is moving rapidly toward legalizing live poker and table games.  Yet on the other, a Pennsylvania appellate court just overturned by a vote of 2-1 a lower court’s decision, in the process ruling that poker is a game of chance, even if skill elements are involved.  This is not good.   Especially because it is another precedent future cases might site when looking to rule poker a game of chance.  How about these judges sit in a room with Ivey, Durrr, and Antonius for some PLO.  Then let’s see whether they think poker is predominantly a game of chance.

(3) The Kentucky iMEGA case takes another turn.  An appellate court has granted a motion that could return the case to the State’s high court very quickly.  The thinking is that the court wants to determine the standing issue (legal gibberish for whether the correct party is suing) in case the case ultimately gets sent to the U.S. Supreme Court.  Hard to tell how this will play out, but it’s probably good news for poker players since the last ruling hinted at siding with poker players on the merits of the lawsuit.  Then again, reading courts is almost as difficult as reading facial tells online. 

(4) The American Gaming Association (AGA) has changed its stance and now is “open to” legalized online gaming sites.  This is a powerful ally in the war to legalize poker.

Pennsylvania has legalized tables games in its casinos.  The larger casinos may spread up to 250 tables while two smaller casinos may have as many as 50 tables.  16% of the gross revenue is slotted for taxes, with two percentage points of that dedicated to local counties and municipalities.  (The total tax drops to 14% next year.)  But perhaps the most notable aspect of this development is the location of the existing and planned casinos.  Foxwoods – which operates a major casino in Connecticut — already plans to open a large casino in South Philly.  That’s barely outside of Atlantic City.  Other casinos (Mount Airy, for example) are a short drive from New York City and other large metropolitan areas.  While undoubtedly good for Pennsylvania in the short-term, the long-term effects of diluting the player pool is unclear for gambling (and poker) generally.

Poker players love to disagree. But one topic on which we all agree is that poker, even when the house profits, should be legal. Yet, even in this area of agreement, there appears to be an important difference in how, or more accurately, where, we attempt to accomplish that goal.

Much of the effort to legalize poker is focused at the federal level. This includes the recent legislation introduced by Senator Robert Menendez (D-NJ), Congressman Barney Frank (D-MA), and others, and the efforts taken and support given by the Poker Players Alliance (PPA). The weight toward a federal-directed approach likely is warranted given the imminent threat of the UIGEA, the broad-reaching effect federal laws have on states, and the volume of money at stake with online poker. But a focus on federal action should not be at the expense of state action. More needs to be done on a state-by-state basis to legalize poker, particularly the live variant. After all, legalizing poker in each state would not only be a boon to the daily lives of poker players but would symbiotically aid the movement to legalize poker federally.

Similar to what is being done at the federal level, lobbies could be established – with or without PPA aid or affiliation – to petition states to amend their laws. Mass letter-writing campaigns could be undertaken to voice support to state representatives. Advertisements depicting the financial benefits of poker revenue (and even perhaps the hypocrisy of differentiating between lotteries and horse racing on the one hand and poker on the other) could be launched. These tactics actually might prove more successful on the state level than they have at the federal level given the acute revenue shortages many states are experiencing and that fewer people (and, at least theoretically, a less diverse group of people) need to be convinced of their merit.

Some states, to varying degrees, permit poker even when the house profits. California, Washington, and Florida are examples. However, little exists akin to the coordinated federal attack launched by the PPA. There is hope that at least certain states may be willing to listen to such a campaign.

A ballot question has been filed in Massachusetts that would legalize Internet poker in that state with winnings being taxed. Its inclusion on the ballot awaits approval by the state Attorney General and then needs 66,000 signatures. Providing hope that it may succeed, Massachusetts Governor Deval Patrick, Senate President Therese Murray, and House Speaker Robert DeLeo each support in varying degrees some version of expanded gambling, potentially including poker.

Pennsylvania also may be fertile ground. The Pennsylvania legislature is considering legalizing table games. Governor Ed Rendell already publicly supports legalizing video poker with the revenue being used for college education or other state needs.

Other states considering legalization of table games, including poker, are New Hampshire and Rhode Island. Even Kentucky, despite its unsuccessful attempt to shutter Internet poker sites, is considering expanding electronic gaming at its racetracks. New York also has intimated an interest in permitting electronic table games.

Legalization of state poker may have tangential benefits as well. For example, the federal prosecution of Douglas Rennick by the U.S. Attorney for the Southern District of New York for money laundering, bank fraud, and illegal gambling offenses is based, in part, on New York penal law. The U.S. Attorney’s case does not even reference the UIGEA. If New York penal law is altered as a result of lobbying efforts, the legal basis on which the Federal Government pursues certain actions could be invalidated, though granted it would not likely affect actions already commenced. And, if multiple states legalize poker, it may have a persuasive affect on the U.S. Congress’ stance on the UIGEA and poker-related laws. It could not hurt.

Resources being used currently to legalize poker on the federal level should not be shifted to a state level use. Rather, the pie of resources needs to be expanded, with those new resources (time, money, expertise, etc…) directed at state governments in a coordinated approach. People should become involved at a grassroots level to organize within their states to provide a coordinated and unified lobby. Perhaps existing lobbies and organizations, or even social networking sites such as Facebook, could be of assistance. It will take time, and may not succeed, but the importance of uniting to legalize the individual game we love is something on which all poker players can agree.

One would be better off flipping a coin than playing poker, at least according to a Pennsylvania jury, which convicted a man based on its determination that poker is predominantly a game of chance.

Lawrence R. Burns, 65, was charged with illegal gambling for organizing and operating for-profit Texas Hold’em poker tournaments in Westmoreland County, Pennsylvania.  Mr. Burns admitted that he ran the tournaments.  His defense was that Texas Hold’em is a game of skill, and therefore not illegal gambling under Pennsylvania law, which in relevant part defines gambling as an activity in which the outcome is determined by chance.

As his lawyer, David Millstein, argued during trial, “Any game is predominated by skill if by the application of learned techniques you can win significantly more than you can lose. . . Poker is like golf in that there are repeated winners because the highly skilled are victorious more often.”

To support his defense, Mr. Burns relied on the testimony of two experts.  University of Denver professor Dr. Robert Hannum testified that he ran one billion computer simulations of poker hands between skilled and unskilled opponents.  968 million of the simulations, or approximately 97 percent, were won by the skilled players.  Professor Hannum elaborated that “skilled players…observe betting patterns to gain an advantage on how others check [hands], bet, call, raise or fold,” and that players also can learn “idiosyncrasies of opposing players — such as rubbing their face — if they have a good or bad hand, or maybe a vein in their neck appears if they are bluffing,” all of which may help a player to win.

Dr. Hannum previously testified in a similar case in Colorado that resulted in an acquittal.  Colorado sought and obtained a ruling that the trial court’s use of his trial testimony was improper.  That finding is being appealed.

The other expert, Susquehanna University professor Matthew Rousu, testified about various poker strategies and also concluded that poker is a game of skill.

Yet, after two hours of deliberations, the 12-person jury returned a verdict of guilty.  District Attorney John Peck has announced that the County will not seek jail time.  Mr. Burns has stated his intention to appeal the verdict.

The issue in Pennsylvania is far from over, however, as it appears that at least two other people, James E. Miller and James L. Hricko, are awaiting trial on similar offenses.  It is a distinct possibility that their juries will find the defendants otherwise.

Dirty Harry’s infamous question “Do you feel lucky, punk?” might have been answered by cheeky poker players with “No, Detective Callahan, I feel skillful over a sufficiently large sample of hands.”   Chance and skill.  These factors often determine whether poker is legal here and forbidden there.  Confusingly, here and there can sometimes be found in the same place.  Without further insult to Mr. Eastwood, we now tour the status of poker in Pennsylvania, North Carolina, and South Carolina.

Many states, such as Pennsylvania and North Carolina, use the “dominant factor” or “predominant” test to determine the legality of poker games when the house takes a rake.  This test requires a court to determine whether skill predominates over chance, and if so, then poker is not prohibited.  In Pennsylvania v. Dent (2009), a Pennsylvania trial court concluded that Texas Hold’em was a skill game and therefore not illegal.  In the absence of any relevant case law or a clear statute, the court’s conclusion was based entirely on law review articles (including one authored by our own Joe Kelly) and on scientific studies such as one conducted by Swedish researchers: Explaining Winning Poker – A Data Mining Approach (2006).  The Dent case is on appeal.  Meanwhile, a different Pennsylvania trial court conclude in Pennsylvania v. Burns (2009) that the Pennsylvania statute on poker was not unconstitutionally vague.  The Burns’ trial concerning a Texas Hold’em tournament is set for August 10, 2009.

Unlike Pennsylvania, which had minimal case law on poker, distant judicial history in North Carolina suggested poker was a game where chance prevailed over skill.  Much more recently, in Joker Club v. Hardin (2005), a poker club requested a declaratory judgment that poker was predominately a game of skill.  At a court hearing, expert witnesses, including Roy Cooke, gave ample and convincing evidence that poker was a skill game.  In a seven-page order, the trial judge listed numerous reasons why poker was a skill game, but concluded that the matter should be resolved by the legislature.  The appellate court in 2007 affirmed the trial court decision and stated that unlike skill games such as bowling or billiards, the skilled poker player “is always subject to defeat at the turn of a card, an instrumentality beyond his control.  We think that is the critical difference.”

In South Carolina, the trial court in County of Charleston v. Chimento et al. concluded earlier this year that South Carolina law prohibited Texas Hold’em.  The judge opined at one point that expert witnesses had established that poker was a skill game since skill predominated over chance.  However, the judge concluded that South Carolina law and public policy prohibited all “games with cards” at a gaming house.  Also, a 2004 South Carolina Attorney General opinion indicated that South Carolina prohibited the playing of “any game with cards or dice.”  Attorney General opinions, while not binding on courts, are often considered persuasive authority.

It is difficult to predict the future of poker games in the United States because of the lack of legal clarity.  The Pennsylvania Attorney General’s office, according to a March 1, 2009 Pittsburgh Post article stated  “If you did a survey of the 67 district attorneys in Pennsylvania, you would probably get 67 different opinions on what constitutes illegal gambling in terms of poker.”

As we said earlier, legal here and illegal there can cause vertigo when here and there are found in the same jurisdiction.  Are state prosecutors  refraining from acting under a cloud of uncertainty? Do they have too much latitude to pick from potentially inconsistent enforcement objectives?  Both are an affront to the rule of law.  Moreover,  schizophrenic policy leaves poker players wondering whether they are faithful to the law, so they are forced to abstain out of fear or lunge forward and hope for the best.

The law ought not be a game of partial information, mixed signals, and potentially risky action.  We have poker for that.