#2009-2 © Copyright 2009, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, www.GamblingAndTheLaw.com

In the first important legal decision of 2009, a trial judge in Pennsylvania dismissed criminal gambling charges against the operator of a garage poker room and his girlfriend dealer, holding that Texas Hold ’em is a game of skill.

Columbia County Judge Thomas A. James, Jr., filed his written Opinion on January 14, 2009. Walter “Buzz” Watkins and Diane A. Dent had been charged with 20 counts of violating Pennsylvania’s anti-gambling statutes. Prosecutors alleged they unlawfully solicited and allowed “persons to collect and assemble for the purpose of unlawful gambling.”

Judge James dismissed all charges.

Buzz had set up poker tables in a rented garage. The only game spread was no limit Hold ’em. Antes were $1 or $2. There apparently was no rake or drop. Instead, winners were expected, but not required, to tip the dealer; the larger the win the bigger the tip.

In August and September 2008, an undercover vice cop sat in on several of the games. Charges were filed in September.

Judge James had to decide whether Buzz and Diane could be guilty of the crimes charged.

The case was made somewhat easier because both the state and defendants agreed, “that the controlling issue is whether Texas Hold ’em is ‘unlawful gambling’ under the Crimes Code.” The Pennsylvania statutes, like many in the U.S., have no definition of “gambling.”

So, the first thing Judge James did was to turn to dictionaries. These were not much help.

Next, he looked at prior case law. Pennsylvania courts, like almost all others, have held that gambling has three elements: “consideration, chance, and reward.” “Thus,” the Judge wrote, “the controlling sub-issue is whether Texas Hold ’em is a game of skill or a game of chance or, if both, does skill trump chance or vice-versa.”

There are disputes about how much skill is necessary to make a game not gambling. Judge James adopted the majority test: “If skill predominates, it is not gambling.”

Courts have developed many different tests for skill. Judge James decided to apply these four, whether: 1) each player has sufficient data available to make informed choices; 2) each player possesses and has the opportunity to exercise skill; 3) skill sufficiently governs the outcome; and 4) the standard of skill is known to all players.

Judge James’ conclusion could be extremely important, because it is the first case to look at recent literature and current scientific studies. Judge James cited articles from 2007 and 2005, including from the Gaming Law Review, of which I am co-editor-in-chief. He looked at the many “how-to” books, including the 2008 edition of Mike Caro’s Caro’s Secrets of Winning Poker. And he examined a statistical study of online poker published by academics in Sweden.

Virtually every author and expert agreed, of course, that “in the long run, good players will win money and bad players will lose money.”

According to the Bloomsburg, Pennsylvania Press Enterprise, Buzz thinks the whole thing was a waste of money, especially the undercover cop.

“The funny part is, there was no need to send him in there. I get three or four police officers who play regularly in our games now.”

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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.