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Eastern District Deals Bad Hand to Government in Poker Game

By Gordon M. Daniell

Required card play references aside, Hon. Jack B. Weinstein of the Eastern District ruled on Tuesday that Texas Hold'Em- a style of poker which has grown exponentially in popularity in recent years, is not gambling under the Illegal Gambling Business Act (18 U.S.C. 1955), because it is a game of skill, rather than one of chance.

The court in United States v. DiCristina (1:11-cr-00414-JBW) dismissed the defendant's indictment under the statute, and overturned his conviction after a lengthy analysis. The opinion, running to nearly 120 pages, features a detailed discussion of poker, its history, and its play, as well as graph featuring an analysis of winnings by skilled players versus unskilled players over time, the chance of winning with a particular hand given a player's skill level, and the percentage of the time a skilled player would defeat a lesser skilled player after a given number of hands. Further analysis is given to both the history of the statutes involved, and the reasoning behind each respective piece of legislation (Including pre and post IGBA laws, and the Indian Gambling Regulatory Act, among others).

It is the court's analysis of the statute that holds the best cards. In analyzing the IGBA and its application to the facts of the case, the court first found that while the statute did criminalize the running of "gambling businesses", it was unclear as to what "gambling" actually was. As an aside, it is not the gambling itself which the IGBA makes illegal, simply the running of the game; the business of gambling. The court first began with an analysis of the statute itself, and determined that the text makes it illegal to operate a gambling business that is illegal under the laws of the state where it takes place, has more than five participants who direct, manage and supervise the business, and is undertaken for more than 30 days or nets more than $2,000 in a single day. It also includes a non-exclusive list of activities, including "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 ruled that the language of the statute, pegging illegal gambling businesses to the state in which they are active, but also including a non-exhaustive list of activities, was ambiguous, because it could be read to limit the list of what constituted gambling (as the Defense contended) or expanded the activities violating the statute to all of those violating state law, as the Government contended. The court next analyzed the legislative history of the statute, and finding no clear indication of whether poker was a) included or b) a game of chance or one of skill. Finding no help from other statutes as well, Judge Weinstein determined that the rule of lenity must favor the defendant - in other words that a draw must favor the accused.

When considering the statute for itself, the court reasoned that Congress, when drafting, could have included poker as part of its list of activities that constitute gambling. Citing to numerous and varied authority for this point, including Bilski v. Kappos (a recent patent case from the U.S. Supreme Court) the court determined that to be gambling, poker must fall under the general definition of the list of games in the statute, but that it does not. Judge Weinstein, in the absence of controlling case authority, and because the statute is unclear as to whether poker is a game of skill or of chance, conducted a thorough analysis of poker. The judge largely adopted the position offered by the defense, that poker is a game of skill because it is not "house banked" and requires skill to play successfully, rather than chance. Summarizing its earlier difficulty in finding a firm definition of what constitutes gambling in the statute and the legislative history, the court returned largely to the testimony of defense and prosecution expert witnesses, a large portion of which is included in the earlier sections of the opinion itself. The court compared poker to golf or the card game Bridge, and found that while some degree of chance is inherent in all three (weather conditions produce harder greens or a more difficult shot in golf, the draw of cards introduces the chance into bridge, as it does to an extent in poker), the major question is one of whether skill or chance predominates the game in question.

As is clear from its outcome, Judge Weinstein found that evidence introduced by the defense expert Dr. Heeb (himself a poker player) was persuasive. In poker, Dr. Heeb was able to demonstrate, skill can affect the outcome more than 50% of the time in as many as 240 hands - the number typically played in a social game of poker - or the amount played in a single session at the defendant's location. According to the evidence, skillful players earn more than unskilled players, and are more successful than unskilled players with every starting hand. Despite evidence from the prosecution's expert, Dr. DeRosa, that the proper data set was a single hand, rather than a longer set of games, the court ruled in favor of the defense, finding that overwhelmingly poker was a game of skill.

The question remains in the ruling: that of its impact. While it dealt federal prosecutors a bad hand in their attempts to include poker in the list of prohibited activities under the IGBA, the court noted that there are still other laws that may be used to bring the power of the federal government to bear against illegal activity; including RICO laws and other legislation designed to prevent organized crime from infiltrating card games. Of course, it need not be mentioned that the opinion is one of a single court in a single judicial district, but it is worth considering the element of territoriality inherent in the decision. Finally, consider also that Mr. DiCristina had already been convicted of running an illegal poker game in Richmond County Supreme Court under a New York law which includes poker in its list of prohibited games of chance.

Yet it is no bluff to say that, at least for now, and at least in the Eastern District of New York, poker is a game of skill, and that those who run poker games may not be charged under the IGBA. That, they can bet on.

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This page contains a single entry from the blog posted on August 26, 2012 9:43 PM.

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