Mark down July 21 in your poker calendars. (How many poker players actually keep calendars?) That’s the day the House Financial Services Committee will hear testimony on Barney Frank’s (Rep.-MA) bill that would legalize and regulate online poker. Needless to say, it’s big day. So if you’re in DC, stop by Room 2128 of the Rayburn House Office Building at 1 pm. For more information on the hearing/bill, check this article out.
Full Tilt Poker became the first major U.S. site to officially and publicly push for legaliztion of online poker in the U.S. Just recently, the site began to encourage its players to petition their Congresspeople to vote for legislation which would legalize online poker. The site’s effort comes just ahead of what is supposed to be the week in which the House Financial Services Committee hears Rep. Barney Frank’s (D-MA) bill.
The Netherlands won a thrilling (at least in spurts) 3-2 football contest to advance to the World Cup finals. That should be enough to make many a gambling Dutchman happy. But there’s even more good news. Recently, a Dutch court ruled that poker is a game of skill, not chance. The ruling is limited to a single person who had been arrested back in 2006. But the decision raises hope that its core holding — skill, not chance — will be extended to all poker in Holland. Maybe if the Oranje win the World Cup the legislature will be in such a good move that they’ll expedite the change in law. Amsterdam, football, and poker? Heaven may not be in Iowa after all.
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.
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.
