Second Court Rules Poker is a Game of Skill

#2009-3 © Copyright 2009, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com

For the second time in two weeks, a trial court has found that poker is a game of skill, and therefore not gambling.

Both cases involved criminal charges being brought against operators of real-money, though unlicensed, games. Both cases ended with the defendants walking. But, unfortunately, in both cases the decisions are unpublished conclusions of state trial courts and thus binding only on the parties, and cannot be used as binding precedents in any other case.

But the results are still significant. The two cases are a trend, because they are a radical break with the way poker cases have been handled before.

The most important new developments are that the poker operators are getting support, including money for experts in legal and gaming issues, from organizations like the Poker Players Alliance, and the judges are letting in scientific evidence and recent law review articles. Instead of nonsense, like “an amateur could beat a professional by getting dealt a Royal Flush,” which makes poker sound like a single roll of dice, judges and juries are hearing about statistical studies and experts who conclude, “in the long run, good players will win money and bad players will lose money.”

The first case, which I discussed in my last column, is a more persuasive precedent, because a trial judge dismissed the gambling charges with a written opinion. Columbia County Judge Thomas A. James, Jr., held that Texas Hold ’em is predominantly a game of skill and thus not gambling under Pennsylvania state law.

Nine days later, a Colorado jury found Kevin P. Raley not guilty of gambling for setting up a poker tournament in a bar. Because there was no written decision, other than “not guilty,” it is always possible that the jury based its decision on some other reason. But that seems unlikely, because the only issue in dispute was whether the poker tournament was predominantly skill or chance.

In the past, trials about poker tended to be short affairs. Prosecutors would call up a law enforcement officer who would testify that he has played poker for years and concluded that winning or losing depended on luck more than skill. The defendant would sometimes testify himself or get a professional poker player, who would testify to the exact opposite.

But the modern poker trials are being fought with the organization and skill that only big money can provide. Anecdotal and pure opinion evidence have been replaced with experts in gaming law and statistics.

In Colorado, for example, a major factor was the testimony of Robert Hannum, Professor of Statistics at the University of Denver. In the Pennsylvania case, the judge cited recent books and articles, including from the Gaming Law Review and Economics, for which I am co-editor-in-chief, and a statistical study of online poker published by academics in Sweden.

Guilt or innocence often depends on the language of ancient statutes. In South Carolina, for example, defendants in a private home Texas Hold ’em tournament were charged with a statute enacted in 1802, before poker had even been invented. The law outlaws “any game with cards or dice,” which would even make games of skill, like duplicate bridge, illegal.

Eventually the law will catch up to fact that people understand the difference between a slot machine and poker. The tide has turned for poker operators and players, because the legal fight has finally gotten organized help.

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© Copyright 2009. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law and is a consultant and expert witness for players, governments and industry. His latest books, Internet Gaming Law and Gaming Law: Cases and Materials, are available through his website, www.GamblingAndTheLaw.com.