Fed. Court Rules Poker a Game of Skill

A federal judge has ruled that poker is predominately a game of skill and not a form of gambling and therefore is not illegal under a federal law designed to prevent organized crime from running gambling operations.

A federal judge ruled Tuesday that poker is more a game of skill than chance and cannot be prosecuted under a law created to stop organized crime families from making millions of dollars from gambling.

The decision by Judge Jack Weinstein in Brooklyn was embraced by advocates of card games pushing to legalize Internet poker in the United States. The judge relied extensively on the findings of a defense expert who analyzed online poker games.

The ruling tossed out a jury’s July conviction of a man charged with conspiring to operate an illegal underground poker club, a business featuring Texas Hold’em games run in a warehouse where he also sold electric bicycles. There were no allegations in the case that organized crime was involved or that anything such as money laundering or loansharking occurred.

“Because the poker played on the defendant’s premises is not predominately a game of chance, it is not gambling” as defined in the federal law, the judge wrote in a lengthy decision that traced the history of poker and federal laws to combat illegal gambling…

Attorney Tom Goldstein, who made arguments before Weinstein on behalf of the Poker Players Alliance, called the decision a validation for poker players, the tens of millions of people who play the game, and believe they are not gambling, taking a chance, but exercising skill in playing against each other.

He said the decision was the most thorough and detailed poker ruling he had seen by a U.S. court.

John Pappas, executive director of the advocacy group representing more than a million poker enthusiasts, said the “thoughtful decision recognizes what we have consistently argued for years: poker is not a crime, it is a game of skill.”

Awesome news. It doesn’t invalidate state laws, unfortunately, but few laws have states specifically making poker illegal. Most state laws are like that federal law, outlawing “games of chance” with the assumption that poker is included in that category. So this ruling at least provides a precedent for arguing that state anti-gambling laws don’t apply to poker.

Comments

  1. Alverant says

    How is it not gambling since the main focus of the game is to bet during each hand? Would this mean Chutes and Ladders is gambling since there is NO skill involved, just random dice rolls? IMHO if an integral part of the game is for the players to make bets then it’s gambling. I don’t care how much skill is involved.

  2. Michael Heath says

    I’m not an ardent student of gambling, but poker seems like gambling to me even if one concedes it is a game of skill, a point I readily concede. Perhaps the U.S. has defined gambling in a manner so narrow poker doesn’t fit their legal definition.

  3. Mark Sherry says

    The mention of organized crime makes it sound like the law is set up to prevent numbers rackets, bookkeeping and similar.

    Under this law, it sounds like playing chess for money would be perfectly legal. While there is money on the line, because the game is entirely skill, each player can influence their chance of winning. On the other end of the spectrum, playing Snakes/Chutes & Ladders, or Candyland for money would be illegal since it’s entirely random. The ruling is that poker falls closer to the chess end of the spectrum, and so the players are allowed to bet on the outcome.

    On the other hand, I suspect that the law would still prevent betting on a game of chess you’re not participating in, since although chess is still a game of skill, it’s not a game of skill on the part of the non-participants. Betting on a game of Candyland is right out, and you should probably see somebody about your gambling addiction.

  4. tomh says

    Perhaps the U.S. has defined gambling in a manner so narrow poker doesn’t fit their legal definition.

    The defendant was charged with violating the Illegal Gambling Business Act, a federal statute which relies on the “Dominant Factor” test (which dominates the game, skill or chance?), to decide if an activity is gambling. On this basis, the decision was that poker was not covered by the IGBA. This was a heavily researched and thoughtful decision, covering history, gaming, statutory history, and expert testimony, (it’s 120 pages) and makes fascinating reading for anyone interested in the subject.

    The defendant is still subject to be charged with violating NY state law, because the controlling law in New York relies on the “Material Degree” test (does chance play a substantial, even if non-dominant, role?), which, of course, is different than the federal definition.

  5. brianwestley says

    So poker is more like evolution; both depend on random events, but the outcome isn’t “random chance”.

  6. ottod says

    Absent the skill, poker would be a game of chance. With some shame, I admit that for me poker would still be gambling. Do I need to take a test?

  7. says

    democommie’s gonna take a little spin on the wheel here…

    I would say that for most people “Poker skills” are entirely fabulous. Bridge, now that’s a fucking game of SKILL. Luck factors into both situations but in order to have a decent poker game you need to have some people who don’t know shit who don’t shit about the game.

    I can’t wait for the “Freshwater Case” on this one. I can see Ed sitting on the witness chair, taking the oath, giving his testimony, surviving cross and re-direct and when interviewed on the courthouse steps saying:

    “Boy, I dodged a bullet in there. I ain’t been that lucky since I drew to an inside straight!”.

  8. davem says

    So betting on horses is no longer gambling, right? After all, it takes skill to spot the horse that’s going to win the race… Poker involves skill, but if you’re dealt the wrong cards, then you’re gambling on the other guy making a mess of his hand.

  9. tomh says

    I would say that for most people “Poker skills” are entirely fabulous.

    A statement like this merely shows your inexperience. The fact is, that in the long run, the more skilful players end up with the money. This is an indisputable fact, proven over decades and probably centuries, and it shows that skill is the dominant factor in the game, outweighing chance. Whatever it is that you mean by the above statement, it is not relevant to the question of whether skill outweighs chance in poker.

  10. Crudely Wrott says

    Ed walks with a bit more pride in his stride.

    Glad to see the court accepting actual facts and evidence. Hope to see the trend spread.

  11. puppygod says

    Why is gambling regulated, anyway? Could it be abrahamic sharia law?

    Well, it has much more to do with money and control than with any religion or philosophy. First of all, gambling always was a huge source of revenue – so it’s only natural that any form of government wanted to have a share in it (or, optimally, monopolize it completely).

    Reason number two is more complicated from the moral point of view. Gambling since times immemorial attracted various criminal types who: a) wanted their share of pie (loading the dice, running the numbers games etc.), b) through running gambling establishments not only had ensured source of income, but also had a perfect washing machine for money laundering. Sure, regulating hazard is probably more about securing government income, but also does serve some function in protecting general population directly (from unfair practices or outright cheating) and indirectly (by making it harder to legalize money from illegal activities – and by illegal activities I mean those that actually does hurt innocent people and not are just result of misguided policies). So arguably some degree of control over gambling is a reasonable thing.

    Unfortunately, I’d say that nine out of ten regulations are nonsensical, so theory is one thing, but practical applications still sucks big time.

  12. says

    “statement like this merely shows your inexperience. The fact is, that in the long run, the more skilful players end up with the money.”

    And that refutes my point? How?

    “This is an indisputable fact, proven over decades and probably centuries, and it shows that skill is the dominant factor in the game, outweighing chance.”

    So, what you’re saying is that all other forms of wagering based on skill are in the same category as poker? I think that the DoJ will strenuously disagree.

    It’s nice for those skilled at poker that so many unskilled players are willing to be tutored–at, in some cases, a very high cost–to learn the intricies of the game.

    Online poker, which seems to be what Ed is mostly talking about when he writes one of these posts, is something I don’t and won’t be doing–”Free” or not. Internet poker is, afaia, currently illegal in the U.S.. I suspect that the reason it is illegal is that the gummint hasn’t figured out how to get their piece or keep the money wagered from disappearing down electronic wormholes. IF I was going to play poker on the internet I would want to be playing on a VERY secure website. Since my skills at poker are approximately the same as my skills at playing the ponies, picking winning lotter numbers and scratching instant tickets with big payouts (worse, actually, I’ve never won in a casino) I’m not tempted to acquire and education from a “skilled” poker player–and I know a few of them, self-professed.

    Of course there is skill in playing poker, pinochle, pitch, canasta,
    bridge and other card games. This is true of many forms of gaming. As Ed has pointed out in the past, random selection sometimes trumps the best thinking at “games of skill”.

    I don’t personally give a shit how people throw their money away, it’s their money. I am a bit concerned about a lack of regulation on gambling and the internet, in general, is not that easy to regulate as the repeated cyber attacks and scams illustrate.

  13. tomh says

    And that refutes my point? How?

    Since I don’t know what your point was, I can’t answer. My point was that the fact that the same players consistently win, shows that skill is a large factor in the outcome. The court decision included 31 pages of expert testimony, by statisticians and others, which referenced a number of studies, to bring out this fact in different ways. For instance, one study looked at 1.5 million hands from an online poker site and found that in 75% of them the outcome was decided without any hands being shown or compared. In other words, it didn’t matter what cards were dealt, the winner was decided by the players’ decisions; betting, checking, bluffing, calling, folding – the success of the decisions decided the outcome. The more skilful players made successful decisions more often and won more often as a result.

    The case turned on whether poker was dominated (over 50%) by skill or chance. The judge decided skill predominated and backed his reasoning with a lengthy, detailed, and convincing decision. To deny his conclusion one needs to refute his reasoning.

  14. says

    “For instance, one study looked at 1.5 million hands from an online poker site and found that in 75% of them the outcome was decided without any hands being shown or compared.”

    Was it this site? http://www.pokerstars.com/poker/promotions/100-billion/

    I’m bad with math but 75% of 1.5M/85B is something like .000145% of the hands played, not what most people would consider a convincing sample–and that 85B is ONE website’s statistic.

    I KNOW that there are skillful poker players. I also know that there are skillful cons galore on the intertoobz.

    You’re certainly entitled to your opinion, I just don’t subscribe to it. I certainly don’t think your sample size offers any sort of compelling evidence of the “skill” involved in playing poker.

  15. tomh says

    I KNOW that there are skillful poker players. I also know that there are skillful cons galore on the intertoobz.

    You lost me there, I don’t know what con you mean. The question the court decided was not whether there were skillful players, but whether the results of the game of poker depend more on skill or on chance. In the judge’s opinion it depends more on skill. You should read the opinion, you might change your mind. Full text of opinion here.

  16. says

    tom h:

    You are a poker player, yes? I’m not. The reason I’m not is because I have never been “lucky” (or statistically anomalous) at any form of gambling–although I’ve been damned lucky at surviving incredibly stupid activities as a young man.

    The judge’s perspective on whether poker is a game of skill or luck is based on his listening to testimony/reading testimony from an expert witness and others. The defense’ expert witness is an admitted tournament poker player–might be a bit of confirmation bias there. It appears that the witness, an economist did due dilegence on a sample size. Part of the testimony indicates that he anyalyzed 415M hands of poker–still a far cry from 100B to ?T that might have been played.

    Poker IS a game of skill for professionals, just like shearing sheep is a game of skill for shepherds–for the sheep, not so much.

    You don’t know which con I’m talking about? Well, online poker is only one of many activities designed to facilitate the separation of money from marks. The expert witness for the defense testified that there was no discernible difference between online playing and live playing, in terms of reads, tells, eye contact, etc. That sounds like complete bullshit.

    Those who play poker, without understanding odds are destined to be taken to the cleaners by those who do. I got no problem with that, just don’t tell me that when you lose it’s because your “skill” was trumped by bad cards.

    Throw your money away in any manner you prefer.

  17. tomh says

    democommie wrote:

    The expert witness for the defense testified that there was no discernible difference between online playing and live playing, in terms of reads, tells, eye contact, etc. That sounds like complete bullshit.

    Actually, he said the exact opposite. From p.16 of the decision;

    “When poker is played live, as it was in the instant case, rather than on a computer, additional skills come into play, such as “the ability to read their opponent, to detect from their opponent’s betting behavior, from their tone of voice, from their reactions, whether or not they have a good hand.” Id. 42:1-4.”

    Poker IS a game of skill for professionals

    The game of poker itself is predominantly a game of skill, no matter who plays it. Skill is not an either/or proposition. In a golf tournament, for instance, it’s not that the ones who lose are unskilled, it’s that the one who wins, or the few that win consistently, are slightly more skilled than the others.

    I have never been “lucky” (or statistically anomalous) at any form of gambling

    I made a very good living for over thirty years playing cards with people who cursed their luck at the tables, when it was simply the poor decisions they made that decided their fate. The simple fact that the same people win over long periods of time shows that skill is the dominant factor. If chance determined the results everyone would win and lose about the same in the long run. You are wise not to play poker. You don’t understand the first thing about it.

  18. lpetrich says

    Seems to me that there is a continuum of skill and chance.

    Pure skill: chess
    Skill + chance: poker
    Pure chance: lottery

    So drawing a line between skill and chance may be hard to do.

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