Legal Poker Under Prohibition 2.0

written by I. Nelson Rose
2017

© Copyright 2007, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com.

Bill Frist, then Majority Leader of the U.S. Senate and now ex-would-be presidential candidate, designed the Unlawful Internet Gambling Enforcement Act (“Prohibition 2.0″) to cover Internet poker. He defined “bet or wager” as including risking something of value on the outcome of a contest, sports event “or a game subject to chance.”

Is there any game, even chess, that is not “subject to chance?”

But Frist, whose arrogance was matched only by his incompetence, actually created the greatest explosion of creativity in the poker industry that I have ever seen. Everyone wants to be the next PartyPoker.com, to figure out a way to spread legal poker games online.

The cleanest way to run a traditional Internet poker site that does not violate any federal or state law is to be licensed by a state and limit players to people who are physically present in that state.

Even in this situation, it is possible the federal Department of Justice might say there is a violation of the Wire Act, since a phone line might pass temporarily into another state. But the DOJ would lose this argument for many reasons. The sole purpose the Wire Act was enacted in 1961 was to help the states enforce their public policy, which, at the time, was prohibition. What could possibly be the justification for preventing a state, like Nevada, from allowing its residents to bet with its own state-licensed poker sites?

The main obstacle to every state licensing, regulating, and of course, taxing, their own Internet poker sites is politics. Utah is not the only place where legislators would hesitate to authorize even the most limited form of online gaming. In Nevada, the problem is the opposite: there are already so many (landbased) licensed poker rooms that it is difficult to work out the details for sharing the new online revenue, and there is fear of diverting players away from the existing gaming floors.

In general, the answer is “skins.” Players will log on to Caesars Palace’s future online poker room and choose which game they want to play, say $5 – $10 Hold’em. They then are placed at a table that has a Caesars Palace logo on it. They probably will not know, or care, that other players may see different logos because they signed up through different casino websites. Computers ensure that each casino gets its correct share of the table’s revenue.

But there are at least three other ways to have legal online poker. All gambling requires prize, consideration and chance. Eliminate any one, and it is not gambling.

A site could charge money, even for games of chance, so long as it does not give valuable prizes. Bragging rights don’t count. So, someone could start a contest for the world’s greatest poker player, if all they win is a trophy, no cash.

Some poker sites allow players to play for free. This is not gambling, despite what some law enforcement agents may say. Since there is no consideration, it does not violate federal law or the laws of most states.

Others are looking at showing that poker is a game of skill. I am writing a Legal Opinion for one of the biggest operators that at least tournament poker is predominantly skill, and therefore legal under federal law and the laws of most states.

There may or may not ever be lawsuits on the issue. After all, is there any government lawyer who wants to be made a public laughingstock by claiming that poker is a game of chance?

END
© Copyright 2006. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website, www.GamblingAndTheLaw.com.

I. Nelson Rose

Related Posts

Is a New York City Casino License Worth $1 Billion?

Is a New York City Casino License Worth $1 Billion?

No government has ever asked $1 billion just for the right to build a casino. That still is true.  But that’s how much New York Governor Kathy Hochul had originally wanted for casinos in New York City. Casino executives and lobbyists were able to get the leaders of...

Texas’s Poker Clubs Are in Trouble

Texas’s Poker Clubs Are in Trouble

A little-known fact, known by few:  Texas has poker clubs.  These are by no means just a couple of tables in the back of a bar.  The Lodge Card Club in Round Rock outside of Austin has more than 60 tables.   The games -- mostly Texas Hold 'em, naturally -- are played...

Macau’s Casinos Are About To Change

Macau’s Casinos Are About To Change

Junkets and high-rollers are out. Mass-market is definitely in. The six current concessionaires, including the American companies MGM, Wynn, and Las Vegas Sands, are, rightly, mostly concerned about whether they will be allowed to continue to operate casinos. But they...

Comments

0 Comments