Poker Legislation Post

 STATE LAWS AND POKER

Introduction: Most people are surprised to learn that the word "poker" does not appear anywhere in any US Federal law relating to "illegal gambling." Whether playing poker is engaging in "illegal gambling" or not is therefore almost for certain a matter of each individual State's laws. Of course, with 50 states each having their own laws and each being slightly different from the rest, completely analyzing each state's gambling laws as they relate to poker would require writing a book, not a forum post. So what I intend to do here is discuss the basic issues involved in analyzing state law. I will occasionally use a specific state as an example, but not go through each state individually. There is a very useful resource on the web that includes each state's gambling law, and is updated pretty frequently (but always double check before relying on it!). It is http://www.gambling-law-us.com/State-Law-Summary/ .

Also, I try and keep a running discussion specific to each state over at the PPA's forums. And while posting general comments or questions is fine in this forum, the PPA forum is where I request you post any questions you have that are specific to an individual state. Someday I hope to have all 50 states covered in that forum, so don't hesitate to ask questions there if you have any:  http://theppa.org/forums/forum/55

There are 2 basic issues regarding state law and poker:

1) Is poker included in the state's legal definition of gambling?

2) If poker is a game covered by the law, are there exceptions that may still allow a game to be legal in one form or another?

Is Poker included in the legal definition of gambling?

    The answer, which may surprise many people is, in my opinion and the opinion of the PPA, NO, at least for MOST states.

    It is a difficult thing for a law about games to be written with every game specifically mentioned. If you list all the known gambling games in a statute, you can bet some smart alec will simply invent a new game, or a new variation on a game, and claim its not illegal. Thus most states use a general definition of gambling: an activity is gambling if it involves consideration, chance, and reward. "Consideration" requires that you pay to play. "Reward" means you get something back if you win. Clearly the key word with respect to poker is "chance."

    Some games, like roulette and slots, are obviously pure chance. No amount of player skill is involved in determining or influencing what number the ball drops in, nor what reel combination comes up. Thus the winner in those games is totally a matter of chance. On the  other hand, some games are almost all skill, like chess and tic tac toe. The only time a random act is used in those games is to determine who goes first. But the vast majority of games, like poker, golf, bridge, spades, blackjack, D&D, Magic, backgammon, pinball, and so many others, are obviously a mixture of chance and skill. To determine which games are gambling and which are not, the law uses what has come to be called the "predominance test." Under that test, a game is not gambling, even if played for money, if the outcome of the game is predominantly determined by the skill of the player(s). "Predominantly" as used here simply means "mostly."

    All of us who play poker know that skill makes a difference in poker. Also, all of us who play know that chance is a factor too. The question is which is the more important factor. This is often simply referred to as the "skill v. chance" argument. I will do a separate post detailing this argument later. For now let me say that in the last few months in 2 different state courts (Pennsylvania and South Carolina) we have seen judges examine the modern evidence that the PPA's Litigation Support Network has collected or developed and both concluded strongly that poker is a game of mostly skill. Assuming we can maintain that winning streak, that takes poker out of the gambling laws of about 30-35 states.

    The number is 30-35 because a few states use different language in their definition of gambling; a frequent variation is the " chance is a material element" test. It has yet to be decided if a "material element" is the same as a "predominant element" or if it requires some lesser amount of chance.

    A small number of states, like Tennessee, go to the far opposite extreme. ANY element of chance makes a game played for money gambling in Tennessee.

    And finally, a few states mention poker specifically in their statutes. Idaho is one example, and all poker is therefore gambling in Idaho. The big card room states (California obviously) also have laws specifically on poker, basically so that only operators with a state issued license can run card rooms that offer poker games.

Does the law, even if it applies to poker, have exceptions?

    YES, almost all states have some exceptions in their gambling laws that will allow for some kind of games to happen. And many of these exceptions allow for poker in one way or another. The exceptions can be grouped into four basic categories:  Licensed games, Home Games, Charity games and Contest exceptions.

    Licensed Games:
    
    This is easy; many state gambling laws allow for games that are licensed by the state. Obviously Nevada, New Jersey and California do this, so do a surprising number of other states to one degree or another.

     Home Games:
    
    In many states a specific exception is created in the law for "home" games. These exceptions all have their particular details, and it is important to check the specific details of your state's law before advertising your home game. Many folks believe that as long as no one is "taking a rake" or charging a fee, a private game is legal. Thats true in some states (California is one). But some states do not have this exception at all (Alabama for example). Some states limit it to playing with folks you have a real "social relationship" with other than gambling (Colorado and Connecticut for example). Some specifically limit it to a private residence (Virginia). Virtually all states with a home game exception require that there be no one making money off the game other than as a player. But even that can get difficult. Suppose you have a home game and charge a "food and beverage fee?" In some states that will be enough to take you out of the exception, in other its OK.

    Also interesting is that in a small number of states, like Kentucky and New York, there are no laws that make the player a criminal. In those states only the "operators" of the game can be charged with a crime. So in an underground card room in New York, the card room owner is in a lot of trouble if caught, but the players can't be charged with anything because there is no criminal offense to charge them with! What's ironic here is that the game will still be considered "illegal." So even if there is no "operator" you can't advertise it or do other similar things with respect to it. But as a practical matter this becomes another kind of "home game" exception. The game may still be considered illegal, but there is no one to arrest for it.
    
    Charity Games:

    Many states have laws that allow for "gambling" so long as at least some of the profit off the game(s) goes to charity. These laws vary immensely from state tot state. In some, like New Hampshire, a private enterprise sets up and runs the games from a regular venue, simply changing which charity benefits on each particular night. In others, like Vermont, a charity can only do 3 games a year, they must all be at different locations, and no private group can run them. Also, in many states, charity gaming is limited to raffles and bingo and does not even include poker at all!

    Contest Exceptions:

    An awful lot of states have a provision in their gambling laws that exempts from the law "bone fide contests of skill, speed, strength or endurance." We have already discussed poker as a game of skill in general, but here we can be more specific: is a poker tournament a "bone fide contest of skill?" Well its clearly a contest: people pay an entry fee and get a prize if they win. This is how a golf tournament works, a fishing tournament, a beauty contest, a NASCAR race, and even a chess tournament. The question thus comes back to "skill v, chance" - is a winning a poker tournament more often the  product of players skill, or of the chance dealing of the cards? I think you already know my answer to that question!

    In fact, just recently the PPA helped out a poker player in Colorado who was running a friendly tournament at his local bar. After he was arrested and charged with a criminal offense. The PPA's Litigation Support Network helped his lawyer craft the argument and paid for an expert witness in statistics to testify that yes indeed, a poker tournament is a "bone fide contest of skill" and therefore not "illegal gambling" under Colorado law. The jury found that player  NOT GUILTY.

Thats the general outline of concerns, but since this only speaks about live poker, I suspect it hasn't answered the real burning question of the day: HOW DO THESE LAWS APPLY, IF AT ALL, TO ONLINE POKER?

Excellent question, but I think this post is long enough. So the next one will be: State gambling laws and the internet.

See you soon!

Skallagrim
PPA Litigation Support Director

Thanks Skall.  That's a really great post with excelelnt info!

All: Please click here to Twitter a message about this thread.

TheEngineer:

Thanks Skall.  That's a really great post with excelelnt info!

All: Please click here to Twitter a message about this thread.

Mookman: Thanks for Twittering it.

Skall: Again, well done.  Feel free to keep your (posting) mouth open here! 

Great Post Skall.  I look forward to your article about state laws and online poker.  They will be very important to the SDNY seizure legal issues.

 great post

great post sir, dugg, etc.