Gambling Law US
Poker as a Game of Skill: Recent Cases
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Prepared for presentation Oct. 11, 2010 at the Monaco i-Gaming Exchanges
Poker as a Game of Skill: Recent Cases By: Chuck Humphrey
Introduction: Games of Chance, Games of Skill
Generally, each of the elements of prize, chance and consideration must be present for an activity to be gambling. Morrow v. State, 511 P.2d 127 (Alaska, 1973). In traditional poker games there is no dispute that prize and consideration are present. Poker players have long believed that poker does not have the element of chance. They contend that it is a game of skill.
In most states, the determination of whether a game is one of skill or chance is based on the predominance test. The California Supreme Court said:
As I said in a previous article, see: Is U.S. Online Poker a Game of Skill? Skill vs chance no state court has ever specifically held that poker is a game of skill—until now!
In rapid order there have now been two lower court cases that specifically held poker is a game of skill under the predominance test and one case that impliedly so held. Unfortunately, two of those have been reversed on appeal.
Pennsylvania v. Dent
In Pennsylvania v. Dent, available online at http://pokerplayersalliance.org/headlines/2009/01/19/pa-judge-thomas-a-james-jr-opinion-on-commonwealth-of-pa-vs-walter-watkins/ the court ruled:
Colorado v. Raley
Raley started a bar poker league in Greely in early 2008. Initially about 15 players showed up at a local bar to play in a poker tournament once a week or so. Each player paid $20 to play and the league kept 10% of that to pay a player/dealer $10 for his services in dealing in the game in which he was also a player. The rest of the money withheld was used to pay various league expenses. The balance of the player's buy-ins were awarded as prizes to the top finishers in the weekly tournament. Over the next few months the people who asked to join and were accepted into the league grew to over 100, although no more than 37 ever showed up on any given night.
Raley was charged with illegal gambling under Colo. Revised Statutes Sec. 18-10-103(1). Gambling - professional gambling - offenses. (1) A person who engages in gambling commits a class 1 petty offense. (2) A person who engages in professional gambling commits a class 1 misdemeanor. If he is a repeating gambling offender, it is a class 5 felony.
Colorado Revised Statutes Sec. 18-10-102. Definitions provides:
The defense presented two threads in its case. First, that the members of the League had a bona fide social relationship because only an existing member could introduce people he knew to join the league. Second, the defense presented Professor Robert Hannum, a tenured professor of statistics and mathematics at the University of Denver, as an expert who was accepted as such and testified that in his expert opinion poker was a game of skill. Colorado case law has not determined whether the predominance test is followed. Professor Hannum presented testimony about one of his studies that showed the "skilled" player won 97% of the time in his simulation against an unskilled player who played at random. He also testified about other studies that reached similar conclusions.
The jury came back with a not guilty verdict. Since there were no special questions propounded to the jury, there is no way to know the grounds on which they based their decision.
The prosecution gave notice of appeal of the trial judge's decision allowing Professor Hannum to testify on the game of skill issue. The prosecution asserted that the Colorado Supreme Court has ruled that games such as poker are games of chance, and thus it was error to admit evidence that it is a game of skill. In Charmes v. Central City Opera House Association, 773 P.2d 546 (Colo., 1989) the Colorado Supreme Court said: The last element of the statutory definition of "gambling" is that the risking of a thing of value for gain be contingent in whole or in part upon lot, chance, or the happening of an event over which the person taking the risk has no control. There is no dispute here over the fact that the card games and other games of chance at the Gala were contingent in whole or in part upon lot or chance or the happening or outcome of an event over which the person taking the risk had no control. While poker and perhaps some of the wagering games might involve some skill, these games certainly are contingent "in part" upon chance, and when, as here, the games involve risking a thing of value for gain, they constitute a form of "gambling" in its commonly understood sense. See Ginsberg v. Centennial Turf Club, 126 Colo. 471, 477, 251 P.2d 926, 929 (1952) (the game of poker is not a lottery but is most certainly a form of gambling). Id. at 551. (Emphasis supplied.)
The appeal in Charmes was from a declaratory judgment. The lower court held in favor of the charity, which wanted to hold a charitable fund-raising casino night party. The basic problems with the statements about some chance in Charmes is that the issue of skill versus chance was not litigated in that case and there is some chance in all endeavors, so a standard to determine the nature of a game needs to be adopted. An overwhelming majority of jurisdictions have adopted the predominance test perhaps for this very reason.
For example, on the obverse of that point, in State ex rel. Tyson v. Ted's Game Enters., 893 So. 2d 376 (AL, 2004) a statute authorizing "bona fide coin-operated amusement machines'' defined such machines as "every machine of any kind or character used by the public to provide amusement or entertainment ... the result of whose operation depends in whole or in part upon the skill of the player ...." The defendant argued that as long as its coin-operated amusement machines involved "some skill" in their operation, they met that qualification… The Alabama Supreme Court held: …[Our constitution] forbids the Legislature from enacting a statute authorizing a lottery. Thus, we hold that [this statute] may not, without contravening [our constitution], be applied so as to legalize games or activities in which skill does not predominate over chance in determining the outcome.
The prosecution's contention on appeal to the District Court was that "The Colorado Supreme Court's finding that poker meets the statutory definition of gambling as a matter of law was binding on the trial court. Therefore, the trial court erred when it permitted an expert to testify that the form of poker played in the present case was not illegal." The principal case relied on for this proposition is Charnes v. Central City Opera House Association, 773 P.2d 546 (Colo.1989).
On appeal the District Court, sitting as an appellate court under applicable Colorado appellate procedure, reversed the pre-trail ruling permitting Professor Hannum to testify. The District Court accepted the prosecution's argument based on Charnes. It also echoed the ruling of the Pennsylvania Superior Court, saying:
Town of Mt. Pleasant v. Chimento
In this South Carolina case five defendants were charged with gambling under the South Carolina Code of Laws Sec. 16-19-40, which makes it a misdemeanor to play cards or dice in specified locations, including a "house used as a place of gaming." These defendants asserted that gaming and gambling are synonymous and that it is generally recognized that the three elements necessary to find gambling are prize, chance and consideration. Extensive expert testimony was presented on the issue of poker as a game of skill.
The judge said "This Court…finds that Texas Hold-em is a game of skill. The evidence and studies are overwhelming that this is so. Town of Mt. Pleasant v. Chimento, Case No. 98045DB, Mt. Pleasant Municipal Court, South Carolina (rendered Feb. 19, 2009). (Available online at: http://www.scribd.com/doc/12654899/SC-Judges-Decision-on-MtPleasant-Poker-Case-021909)
The judge was not convinced, however, that the predominance test is the law in South Carolina. Therefore, he found "…[T]his Court will not set itself to definitively conclude that this State will or does follow the 'Dominant Test' Theory and thus is compelled, since it has no clear guideline from the Legislature or from the majority of the Supreme Court to find that defendants guilty of violating Code Section 16-19-40, and therefore are required to pay the fines and assessments required by such a violation."
That conviction was appealed to the Court of Common Pleas sitting as a court of appeals, which found that the dominance test is, or likely would be, legally applicable in South Carolina, citing the dissent in a prior South Carolina case, Johnson v. Collins Entertainment Co., 333 S.C. 96,508 S.E.2d 575 (1998).
The prosecution has appealed the reversal to the South Carolina Supreme Court, which will hear oral argument on October 19, 2010.
Arguments in Favor of Poker as a Game of Skill
The Poker Players Alliance is the leading public advocacy group representing the interests of poker players in the United States and around the world. Its website contains a wealth of information about its activities.
A thorough analysis of the arguments in favor of poker being viewed as a game of skill is in a white paper prepared for the Poker Players Alliance by Thomas Goldstein and his associates at the law firm Akin Gump Strauss Hauer & Feld LLP, for the Poker Players Alliance. Tom and his firm are among the leading litigators in the United States Supreme Court and he is the founder and editor of the blog Scotusblog.com.
I am grateful for permission to republish this white paper, which I consider to be the most thorough and correct writing on the subject of poker as a game of skill. The text of that article is here.
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