2006 – #3 © Copyright 2006, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, Whittier Law School, Costa Mesa, CA

It always amazes me that highly intelligent men and women make and interpret laws without having the slightest idea what they are doing.

Actually, that is unfair. Judges and regulators try to do what is right, although they are often limited by statutes. Scandals involving a few corrupt lobbyists and members of Congress give a false picture of legislators, who are usually good people.

But where these leaders of society fall down is in their refusal to listen to experts. Especially when it comes to legal gambling, lawmakers usually don’t even think about talking to people who work in the field, let alone players.

Take, for example, the mess over poker in Florida.

The state legislature passed a law in 1996 allowing licensed pari-mutuel facilities, namely racetracks and jai alai frontons, to open commercial cardrooms. Limiting the games to poker made some sense, since the state did not want to legalize what it considered to be as true casino games, in part because that would open the door to Indian casinos.

But legislators imposed a maximum pot limit of $10 for every game. Even a seven-handed home game would have trouble staying under $10, unless the game were literally penny ante; even 25¢ – 50¢ could violate the law.

It took cardroom operators seven years to convince the legislature to change the law. And even then, the limits were raised only to $2, three raises maximum.

This was good – but not great – news, for cardrooms. Poker players could have told lawmakers that Texas Hold ‘Em tournaments were the next big thing.

The regulators, the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, took up the difficult task of deciding what to do about poker tournaments in the face of the legislature’s silence on the topic. Their job was made more difficult because the legislature gave them no money to regulate cardrooms. The Division’s racetrack chief inspectors could spend no more than 10% to 12% of their time on cardroom compliance.

Now, regulators don’t tend to be the most adventurous of individuals. In fact, it is not their job to make new laws. Rather, they are suppose to control situations created by legislatures to make sure that things do not go horribly wrong. So, naturally, they decided that if poker tournaments were to take place at all, buy-ins had to be one-time only, and small, based on the legislature’s limits of $2 bets and three raises.

Two cardroom operators, Calder Race Course and Dania Jai Alai, sued.

Experts were finally allowed to testify, at a formal hearing.

The cardrooms called upon true experts, including Poker Player’s own Stanley Sludikoff, to testify about poker, especially how poker in general, and poker tournaments in particular, are played in the United States. The Division called no experts to the stand.

Sludikoff was able to explain to Administrative Law Judge Barbara J. Staros how re-buys worked, and she understood that they were not the same thing as re-entering a tournament. So she struck down the Division’s prohibition on re-buys.

The legislature had said nothing about jackpots. Judge Staros was not convinced that this meant jackpots were legal, but it also did not give the Division the authority to outlaw them.

Most importantly, the legislature had defined “authorized games” to mean “a game or series of games of poker…” which clearly showed that tournaments were allowed. Again, the legislature had not specifically given the Division the authority to limit how tournaments were played, so Judge Staros held that the Division had overstepped its power.

The cardrooms won this battle, because they were able to call in experts like Sludikoff.

But the war over the $2 limit and tournaments is not yet over.

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© Copyright 2006. Professor I Nelson Rose will be teaching International Gaming Law as part of Whittier Law School’s Summer Abroad Program in France in July 2006. For more information, contact Prof. Rose through his website, www.GamblingAndTheLaw.com.