Does the UIGEA apply to poker-only sites?

[Steve Brecher]

Buried deep in another thread, http://tinyurl.com/yfvqqt, I raised a legal question which I haven't seen discussed (sorry if I missed it):

<font class="small">Code:</font><hr /><pre>`` 5362. Definitions
``In this subchapter:
``(1) BET OR WAGER.--The term `bet or wager'--
``(A) means the staking or risking by any person of
something of value upon the outcome of a contest of others,
a sporting event, or a game subject to chance, upon an
agreement or understanding that the person or another
person will receive something of value in the event of
a certain outcome;
...

`` 5363. Prohibition on acceptance of any financial
instrument for unlawful Internet gambling
``No person engaged in the business of betting or wagering
may knowingly accept, in connection with the participation of
another person in unlawful Internet gambling-- [funds]</pre><hr />
In other words, no person in the business of staking or risking something of value on a game subject to chance may accept...

I don't see how a poker-only site would be in the business of of betting or wagering, unlike a sports book or casino site.

[maurile]

Yes, "bet or wager" includes running a poker site. You quoted subsection (A), but left out subsection (D), which states that the term 'bet or wager' includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer.

PokerStars is not risking a thing of value on a game subject to chance, but it is executing instructions on behalf of DeezNuts45 that pertain to making bets on a game subject to chance.

That's my interpretation, anyway. I believe TruePoker CEO has a different interpretation.

[Shorty35]

Its a good argument and hoperfully one that will never be tested (or if it is, will be succesful).

Someone aguing the Frsit side of the legislation would say:

1. Poker is a game of betting or wagering (between players, of course, not the house).

2. The sites are engaged in the business of poker.

I am a lawyer, and I think this debate is a coinflip (we have the pair, Frist and company have the overcards). The use of "game subject to chance" instead of game of chance is also troublesome for poker.

caveat: I havent read the full text of the legislation

[maurile]

[ QUOTE ]
The use of "game subject to chance" instead of game of chance is also troublesome for poker.

[/ QUOTE ]
Yes, I think the reason they used "subject to" instead of "of" was specifically to include poker.

[gonebroke]

It applies to all sites. Poker only sites or poker+casino sites. If it did not apply to poker only sites, then all the public sites would have either dumped their casino assets or spun off the poker sites into its own entity.

[Shorty35]

[ QUOTE ]
Yes, "bet or wager" includes running a poker site. You quoted subsection (A), but left out subsection (D), which states that the term 'bet or wager' includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer.

PokerStars is not risking a thing of value on a game subject to chance, but it is executing instructions on behalf of DeezNuts45 that pertain to making bets on a game subject to chance.

That's my interpretation, anyway. I believe TruePoker CEO has a different interpretation.

[/ QUOTE ]

Ugh, given this text, I think we are a flush draw looking to crack AA. Thank goodness the sites have the jurisdictional arguments.

[Steve Brecher]

[ QUOTE ]
Yes, "bet or wager" includes running a poker site. You quoted subsection (A), but left out subsection (D), which states that the term 'bet or wager' includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer.

PokerStars is not risking a thing of value on a game subject to chance, but it is executing instructions on behalf of DeezNuts45 that pertain to making bets on a game subject to chance.

[/ QUOTE ]
"(D) includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering;"

So the rest of (D), of which I have boldfaced the salient part, leaves (A) in control of the meaning of "business of betting or wagering," and thus I think the poker-only point is still germane.

[TakenItEasy]

[ QUOTE ]
[ QUOTE ]
Yes, "bet or wager" includes running a poker site. You quoted subsection (A), but left out subsection (D), which states that the term 'bet or wager' includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer.

PokerStars is not risking a thing of value on a game subject to chance, but it is executing instructions on behalf of DeezNuts45 that pertain to making bets on a game subject to chance.

[/ QUOTE ]
"(D) includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering;"

So the rest of (D), of which I have boldfaced the salient part, leaves (A) in control of the meaning of "business of betting or wagering," and thus I think the poker-only point is still germane.

[/ QUOTE ]

Poker bets don't go to or from the business account, they go to or from another players account, The rake goes to the business account.

I think this is why some forms of blackjack were legal in California when players rotated the deal and the house neither took or payed bets but took a rake.

[KEW]

This was discussed briefly in an earlier thread but I can not recall the thread...I believe TRUE started and basically said a Poker site is mearly providing a service..Then others(I think BERGE and/or Mr K) said something along the lines they could go back to Legeslative intent..And based on there review it was clear the intent was to include Poker..It is a interesting arguement that I would like to hear the opinion of all our resident experts/insiders...

[Nate tha\\\' Great]

[ QUOTE ]
This was discussed briefly in an earlier thread but I can not recall the thread...I believe TRUE started and basically said a Poker site is mearly providing a service..Then others(I think BERGE and/or Mr K) said something along the lines they could go back to Legeslative intent..And based on there review it was clear the intent was to include Poker..It is a interesting arguement that I would like to hear the opinion of all our resident experts/insiders...

[/ QUOTE ]

My feeling is that the sites that want to stay in business are doing so because they've conlcuded that the legal risks are not substantial enough, in consideration of the country they reside in and other things, to outweigh the financial rewards. In other words, "we don't think the regulations are strong enough to stop the games, and we don't think the Department of Justice will bust us". However, none of them are going to be impolitic enough to say this. So they're working off the fact that the regulations are pretty ambiguous and coming up with sort of plausible deniability re: the regulations' applicability to poker. This helps to reassure customers and perhaps lets them avoid the appearance of "bad faith" if the authorities do go after them.

This is not to say there's no merit at all to their claims. I simply don't have enough legal training to offer a credible interpreation about that, although my gut feeling is that these arguments are a bit far-fetched. But to use one of those analogies that everyone hates, this is something like one of those semi-bluffs where you have a handful of outs but are mainly just hoping that your opponent won't call you.

[maurile]

[ QUOTE ]
[ QUOTE ]
Yes, "bet or wager" includes running a poker site. You quoted subsection (A), but left out subsection (D), which states that the term 'bet or wager' includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer.

PokerStars is not risking a thing of value on a game subject to chance, but it is executing instructions on behalf of DeezNuts45 that pertain to making bets on a game subject to chance.

[/ QUOTE ]
"(D) includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering;"

So the rest of (D), of which I have boldfaced the salient part, leaves (A) in control of the meaning of "business of betting or wagering," and thus I think the poker-only point is still germane.

[/ QUOTE ]
(D) becomes circular because it uses the phrase "betting or wagering" even as it defines the phrase "bet or wager." But (D) does not leave the definition to (A) any more than (A) leaves it to (D). They are on equal footing, and they both describe what the phrase "bet or wager" includes. (D) says it includes information or instructions as well as the bets themselves.

This is also Nelson Rose's interpretation.

I don't think it's perfectly clear, but I read it as including poker.

[StellarWind]

Some poker-only sites may wish to review their promotions.

It would be a shame if a royal flush or cracked aces promotion was used to pierce this potential defense.

The key thing to recognize about this argument is that interpreting a law is not a form of mathematics where there are objective standards of right and wrong. It will take a test case and a judge, perhaps multiple cases and many judges, before this matter is settled. If in fact it ever comes up at all.

In the mean time the argument exists and it has power. It is a deterrent against spending large amounts of time and money building a case against (e.g.) PokerStars and bringing it to trial. Even a 5% chance of an adverse ruling before trial has to give an aspiring prosecutor pause, especially since it is just one of many ways a prosecution could go bust.

Poker supporters should make this argument and keep making it. If push comes to shove maybe it will work. In the mean time the mere existence of the argument supports our cause.

[Sniper]

[ QUOTE ]
But to use one of those analogies that everyone hates, this is something like one of those semi-bluffs where you have a handful of outs but are mainly just hoping that your opponent won't call you.

[/ QUOTE ]

... but don't forget... Stars rules on the river /images/graemlins/wink.gif

[Our House]

[ QUOTE ]
[ QUOTE ]
The use of "game subject to chance" instead of game of chance is also troublesome for poker.

[/ QUOTE ]
Yes, I think the reason they used "subject to" instead of "of" was specifically to include poker.

[/ QUOTE ]
There isn't a game in existence (maybe chess, but that can argued as well) that's not subject to some type of chance. Two equally skilled golfers can hit the same shot into a sand trap. One ball can bounce out and land 3 feet from the pin; the other can get burried like a fried egg.

I really don't think the government is prepared to handle all the gaming site/bank/etc. court cases bearing various degrees of short and long term luck. How could they ever decide where the (percentage of luck or time frame for convergence) line is drawn without any knowledge of which games can be +EV or are beatable? One can even argue that casino games are profitable while bonus whoring.

"Subject to chance" is just as ambiguous as "game of chance" IMO.