More food for thought on the 'Unlawful Gaming Act'

[ukpoker]

Another excellent piece of analysis on Bill Rini's website, from Chuck Humphreys, on the 'Unlawful Gaming Act'.

Makes scary reading for Full Tilt & Pokerstars US players!!

http://www.billrini.com/

[Hock_]

I'm not going to spend hours responding to the many inaccuracies, oversimplifications, and errors in this article, but suffice it to say, that there are many inaccuracies, oversimplifications, and errors.

One point in particular worth mentioning is that after the author goes to great lengths to explain how playing poker is illegal -- without citing any statute, regulation, or case -- he then at the end of the article mentions in passing "Online poker is illegal (or not specifically legal) in most states". This "or not specifically legal" point is more than a little important. His entire article is premised on the assumption that playing poker is illegal. Whether it is or not is not at all clear, despite his ever-so-inapplicable marijuana example.

I have no idea who this guy is, but I am quite confident that PStars and FTP, who have hundreds of millions of dollars at stake, got the best legal advice available. They're not going to risk big fines or sentences without having a legitimate argument that what they're doing isn't legal. This guy's article is not a legal analysis in any real sense of the term.

[SlapPappy]

I'm so confused now. "Online poker is illegal (or not specifcally legal) in most states." WTF. I thought it was not illegal in most states.

I think his statement in parentheses "not specifically legal" is even more vague. I don't know of any state where online poker, besides maybe Florida, is specifically legal.

[jrz1972]

[ QUOTE ]
I'm so confused now. "Online poker is illegal (or not specifcally legal) in most states." WTF. I thought it was not illegal in most states.

I think his statement in parentheses "not specifically legal" is even more vague. I don't know of any state where online poker, besides maybe Florida, is specifically legal.

[/ QUOTE ]

A lot of states have laws on the books stating that if a specific form of gambling isn't explicitly legal, then it's illegal.

I'm not sure how many states have that particular policy, but it's more than just one or two.

[Billman]

As the author of the piece, please do take the time to respond to all of the inaccuracies. I would love to hear them.

[ QUOTE ]
without citing any statute, regulation, or case

[/ QUOTE ]

Because there have been enough busts that I thought it would be obvious. Tell me, is poker legal in NYC? Do I have to cite every police raid in order for you to believe that?

My point was that if you can't spread a game and collect rake it's illegal.

[Billman]

Thanks jrz, that was the point of saying "not specifically legal." I wanted to cover those states where they don't have laws on the books making poker illegal but do have laws similar in nature.

[adios]

[ QUOTE ]
have no idea who this guy is

[/ QUOTE ]

Chuck Humphrey is a lawyer.

[Hock_]

[ QUOTE ]
Because there have been enough busts that I thought it would be obvious. Tell me, is poker legal in NYC? Do I have to cite every police raid in order for you to believe that?

[/ QUOTE ]

Well, no, it's far from obvious. It may well be illegal in New York, but that's a far cry from the blanket nationwide illegality on which much of your article is premised. My understanding -- and I'm the first to admit that I'm no expert in this field -- is that there's a significant disagreement about whether any federal statute criminalizes playing poker on the internet. To my knowledge, the only US Court of Appeals ever to have considered the issue has held that the Wire Act doesn't. So unless there's another federal statute or case to which you can point me, we're left with a state-by-state analysis. And my guess is that in many (most?) states there isn't going to be a clear answer. Which means that one of the premises of your article and the entire applicability of the statute in question is very much up in the air, despite the rather absolute impression conveyed by the article.

[Little_Luck]

The only thing scaring me is that all publicly traded companies have complied with the US or intend on doing so. The ones that aren't are the privately-held ones. Neteller is a publicly traded company and, if I had to bet on it, I would have to bet that they will eventually comply, if for no other reason than to avoid shareholder lawsuits.

I really hope I am way off on it. I am sure one of the other large e-wallets are privately-held and business will be able to shift in their direction.

[SlapPappy]

[ QUOTE ]
[ QUOTE ]
I'm so confused now. "Online poker is illegal (or not specifcally legal) in most states." WTF. I thought it was not illegal in most states.

I think his statement in parentheses "not specifically legal" is even more vague. I don't know of any state where online poker, besides maybe Florida, is specifically legal.

[/ QUOTE ]

A lot of states have laws on the books stating that if a specific form of gambling isn't explicitly legal, then it's illegal.

I'm not sure how many states have that particular policy, but it's more than just one or two.

[/ QUOTE ]

Examples please. The state of Kansas has nothing in their Constitution similar to this.

[permafrost]

[ QUOTE ]
His entire article is premised on the assumption that playing poker is illegal.

[/ QUOTE ]

And the new law has the same premise - if there is no Unlawful Internet Gambling, the illegal online poker of your post, then no worries since the new law won't apply. You just need to find the States that allow legal online poker. Keep us posted.

[Hock_]

[ QUOTE ]
if there is no Unlawful Internet Gambling

[/ QUOTE ]

Other types of betting on the internet (or at least over the phone) clearly are illegal. Most obviously betting on sports. The statute applies to those; possibly not poker.

[Billman]

[ QUOTE ]
So unless there's another federal statute or case to which you can point me, we're left with a state-by-state analysis.

[/ QUOTE ]

Would you be willing to accept that operating any sort of gaming (skill based or not) is illegal in every state if the operator does not hold a license?

The law then would apply in the following way: If the operator accepts a bet from a player who is in a state that requires that gaming operators be licensed, the operator is in violation of the UIGEA.

[Billman]

[ QUOTE ]
Chuck Humphrey is a lawyer.

[/ QUOTE ]

From his bio: (http://www.gambling-law-us.com/)

He is admitted to practice law in Colorado, Michigan and Texas, currently being active in Colorado, where he lives. He was a staff attorney for the Securities and Exchange Commission in Washington, D.C. early in his legal career.

Chuck continues his law practice, which principally focuses on business matters, including gambling law, structuring transactions, and securities and venture capital law.

[Hock_]

[ QUOTE ]
Would you be willing to accept that operating any sort of gaming (skill based or not) is illegal in every state if the operator does not hold a license?

[/ QUOTE ]

I don't know if that's true or not, but I wouldn't be surprised if it were. The thing is that all of the big sites ARE licensed, or at least legal in some way, shape, or form, in the jurisdictions in which they are located. One of the ways that your article seems to oversimplify things is in its back-of-the-hand treatment of issues relating to the intersection of the laws of the jurisdictions where the sites are based and the laws of the jurisdictions where the players are located.

[Billman]

[ QUOTE ]
I don't know if that's true or not, but I wouldn't be surprised if it were.

[/ QUOTE ]

Hock, I really recommend you go to Charles Humphrey's site (http://www.gambling-law-us.com/) as he has a state by state listing of each state's law.

Listen, I do appreciate the fact that you hate what's happening and so reading analysis like what I wrote is not very fun. But in your original post commenting on my article you said that you didn't have the hours to address all the inaccuracies. So far, all you've done is tell me you don't know state laws, don't know how the law applies, and yet you seem fairly convinced that I'm wrong. I was honest in seeking your feedback on where I might be wrong. As I mentioned in the article, I respect those who hold differing views on this legislation so if my post was as riddled with errors as you stated then I would love to correct myself.

Let me quote Humphry's website:

[ QUOTE ]
The words "gamble" and "gambling" are generally used to discuss an activity that may run afoul of applicable criminal laws. The word "gaming" is usually reserved for those instances where the activity has been specifically legalized by applicable laws or where the activity is exempted from the criminal laws. Thus, playing a casino-style game at a for-profit website online in the United States is referred to as gambling, since no state has yet finalized any law specifically authorizing a for-profit website operator to offer any casino games.

[/ QUOTE ]

Bottom line is that it doesn't matter if XYZ Poker is licensed in Antigua. It's not licensed in the jurisdiction where the part of the gaming is taking place (e.g. the US). Think about it this way, if I hold a liquor license in Canada, can I legally sell booze to Americans? No. If what you propose were the case, Harrah's could open up a casino tomorrow.

[SlapPappy]

Okay Billman. I think the counter arguement is that in certain states, I am not sure that opening up a pokerroom is illegal or requires a license because certain states require that these establishments take "bets", and they define "bets" as "dependent on chance". Well since poker is a game of skill maybe someone wouldn't need a license to open a straight pokerroom. Maybe I am way off base here.

[breaktwister]

Pathetic article. Who is Chuck Humpries? I don't know but I doubt he has ever had any legal schooling. Its seems a poor attempt by a non-lawyer to analyse a complex legal scenario.

Too many inaccuracies for me to begin so I wont.

[Zetack]

[ QUOTE ]
As the author of the piece, please do take the time to respond to all of the inaccuracies. I would love to hear them.

[ QUOTE ]
without citing any statute, regulation, or case

[/ QUOTE ]

Because there have been enough busts that I thought it would be obvious. Tell me, is poker legal in NYC? Do I have to cite every police raid in order for you to believe that?

My point was that if you can't spread a game and collect rake it's illegal.

[/ QUOTE ]

Prosecutors have said that it is not illegal to play poker for money in New York State, only to profit from promoting it.

I haven't read the law, I don't know what promoting it means.

To others in the thread, its far from a settled issue that if a state prohibits gambling, and a person makes a wager on the computer in that state with other parties on computers in some other juridiction, that a general anti-gambling law in the state applies. It is clear that there's enough nexus that a State can specifically make that illegal, in the absense of such a specific statute, it is not settled.

--Zetack

[Billman]

[ QUOTE ]
Okay Billman. I think the counter arguement is that in certain states, I am not sure that opening up a pokerroom is illegal or requires a license because certain states require that these establishments take "bets", and they define "bets" as "dependent on chance". Well since poker is a game of skill maybe someone wouldn't need a license to open a straight pokerroom. Maybe I am way off base here.

[/ QUOTE ]

Hi SlapPappy,

Again, I will refer you back to Humphrey's site since he addresses this issue specifically. Please read the article as the guy is a lawyer and specializes in gambling law. I didn't make this up. Many of the states that do differentiate between games of skill and games of chance have a test. Chess is clearly a game of skill because even on his best day a bad player can't beat a grand master. Though poker is also a game of skill, any donkey can win against the best pro in the world over a hand, a session, or even some other longer period of time. You know how we all laugh at those people who claim a site is rigged because they've played 300 hands and haven't gotten aces? Yeah, now think of that in reverse. If poker is a skill game, how come the best pro in the world only has a minuscule advantage over a donkey in any particular hand? Most states ask if it's overwhelmingly a game of skill. 51/49 doesn't qualify.

And whether or not you accept the above . . . opening up a card room without a license in that state is illegal in all 50 states. Name a state that lets just anyone set up a card room. That state would have more card rooms than Vegas has casinos. The reason you can't name a state is that no state allows unregulated gambling.

[Billman]

[ QUOTE ]
[ QUOTE ]
As the author of the piece, please do take the time to respond to all of the inaccuracies. I would love to hear them.

[ QUOTE ]
without citing any statute, regulation, or case

[/ QUOTE ]

Because there have been enough busts that I thought it would be obvious. Tell me, is poker legal in NYC? Do I have to cite every police raid in order for you to believe that?

My point was that if you can't spread a game and collect rake it's illegal.

[/ QUOTE ]

Prosecutors have said that it is not illegal to play poker for money in New York State, only to profit from promoting it.

I haven't read the law, I don't know what promoting it means.

To others in the thread, its far from a settled issue that if a state prohibits gambling, and a person makes a wager on the computer in that state with other parties on computers in some other juridiction, that a general anti-gambling law in the state applies. It is clear that there's enough nexus that a State can specifically make that illegal, in the absense of such a specific statute, it is not settled.

--Zetack

[/ QUOTE ]

Hi Zetack,

Do a Google search on "online jurisdiction" and see if you still agree that if two people transact if the law of both states doesn't apply. There's a mountain of rulings that state that if you do business with someone in a different state online that they can bring a suit against you in either state. The only exception is if it says in the contract that all disputes will be subject to the law of X state.

But that's civil law. You can't just say that if what we're doing is illegal that the law of some other jurisdiction applies. Thus my marijuana example in my blog post. You can't just say "Well, you agree to be held under Holland law which makes it legal for me to sell you a joint." Your violation is not with the other party in the transaction but the state who has the right to impose rules on anybody doing business with customers who reside in that state. Normally that works to your benefit. XYZ Corp can't sell you shoddy goods just because there's no law against it where they're at. If you get ripped off, you can go to your state attorney general and ask them to file charges.

Lastly, I'm going to take a pretty wild guess and say that spreading a poker game and taking rake qualifies as "promoting."

Bill

[StellarWind]

[ QUOTE ]
Additionally, there is the fact that they are unlicensed gaming establishments which negates any protection that the poker is a skill game argument might offer.

[/ QUOTE ]
You are effectively saying that holding a chess or tennis tournament that pays cash prizes out of entry fees requires a gaming license. I don't believe that. There is no middle category in which to place a game. If the game-of-skill argument is upheld then poker equals chess and the sites are in the clear.

That said, the game-of-skill argument is pretty hopeless. Poker has been around for a long time and I don't know of any state that has accepted that argument.

Of course poker is not actually a game. It is a generic term for many games including new ones that are constantly being invented. If the skill vs. luck factor in a specific form of poker was slanted sufficiently toward skill then an exemption might be available. Bridge for money is considered to be a game of skill in some states despite the fact that a bad player can easily beat a master on any given evening. If I were facing charges for spreading a no limit hold'em cash game I might raise this point as the luck factor is reputedly much lower than the traditional games upon which the precedents are based.

[prodonkey]

[ QUOTE ]
The law then would apply in the following way: If the operator accepts a bet from a player who is in a state that requires that gaming operators be licensed, the operator is in violation of the UIGEA.

[/ QUOTE ]

If the poker operations were in the states, I agree that it would be patently illegal. The "operators" are not in the states though, and are not subject to US jurisdiction.

The wire act has already been shown not to include poker in it's scope. Yet the DOJ still insists that it does.. there won't be a really good interpretation of all this until someone takes a case before the supreme court though.

Welcome to the United States of China

[pseudoego]

Skill versus chance:

Look: Quite intelligent guys regularly lose to people with lower IQs who happen to have better skill at Poker.
Happens to me all the time! :-)

Why? because they have more skill than me. It is not because I am "unlucky." I am not a victim of chance. I am a victim of my own stupidity..even though I am smart, by definition. (Don't ask me to prove it).

You mention chess. The world chess championship is not played over a single game, or even three. It used to be decided over 24 games. This was because anybody could have a bad day...i.e. be unlucky. But over time, skill will exercise itself.

If you do not make blunders, in either Poker or Chess, you will rarely have a losing session. That says "skill," to me.

Any idiot can crack a pair of Aces, that is the random aspect.

The game of Poker is *not* about single hand outcomes.
Blackjack is clearly a game of skill for the card counters, yet they will lose hands because of "chance." However, over the long haul, they will win, because their skill allows them to exploit Positive Expectancies. Those with no skill will get wiped out and go bankrupt.

The same applies to Poker.

The same applies to Lovemaking.
Those with limited skill do not last long.

[bcubed72]

[ QUOTE ]
These companies will never float while they are actively engaged in illegal activity because no professional investor is going to touch them with a ten foot pole.

[/ QUOTE ]

They'd probably be in trouble from instsutional investors (i.e mutual funds, pension funds, etc). As a private investor, I'd love to invest in a company engaging in illegal activity, so long as I could assure 1) said company not being punsihed in a meaningful way for their behavior and 2) not absconding with my money. If I could meet these conditions, I'd probably invest in a crack distrubution company.

Since we know that you can't be extradited for an offense that's legal in your home country, and I have faith in the bigger online companies, I'd gladly invest if I could expect higher than average ROI. It'd sorta be like a junk bond fund: higher anticipated rewards in return for higher risk.

[permafrost]

[ QUOTE ]
[ QUOTE ]
if there is no Unlawful Internet Gambling

[/ QUOTE ]

Other types of betting on the internet (or at least over the phone) clearly are illegal. Most obviously betting on sports. The statute applies to those; possibly not poker.

[/ QUOTE ]

Huh? We were BOTH talking about poker (even though you left off that part of the quote). You said earlier

[ QUOTE ]
His entire article is premised on the assumption that playing poker is illegal.

[/ QUOTE ]
as part of your implication that poker could be legal in "many" States (after a "state-by state analysis"). I was agreeing that if you found those legal States or even unclear States, the new law was not applicable. Please share those States with us if you find them so we will know where we can play legal online poker.

[permafrost]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I'm so confused now. "Online poker is illegal (or not specifcally legal) in most states." WTF. I thought it was not illegal in most states.

I think his statement in parentheses "not specifically legal" is even more vague. I don't know of any state where online poker, besides maybe Florida, is specifically legal.

[/ QUOTE ]

A lot of states have laws on the books stating that if a specific form of gambling isn't explicitly legal, then it's illegal.

I'm not sure how many states have that particular policy, but it's more than just one or two.

[/ QUOTE ]

Examples please. The state of Kansas has nothing in their Constitution similar to this.

[/ QUOTE ] Kansas law making gambling illegal, 21-4303 (http://www.gambling-law-us.com/State-Laws/Kansas/)

[Billman]

[ QUOTE ]
You are effectively saying that holding a chess or tennis tournament that pays cash prizes out of entry fees requires a gaming license. I don't believe that. There is no middle category in which to place a game. If the game-of-skill argument is upheld then poker equals chess and the sites are in the clear.

[/ QUOTE ]

In both cases the prize pools are equal to or in excess of the entry fees. Raking the game is usually what makes it illegal.

[Billman]

[ QUOTE ]
If the poker operations were in the states, I agree that it would be patently illegal. The "operators" are not in the states though, and are not subject to US jurisdiction.

[/ QUOTE ]

I think you're confusing the ability to arrest someone and whether or not they're breaking the law. If I set up a server in China and start selling pirated music, it may be difficult for a state or the federal government to arrest me as China is likely unwilling to cooperate. But, if I ever set foot on American soil, I will be arrested.

The US has jurisdiction over any transaction involving a citizen and some third party regardless of where that third party is.

[Billman]

[ QUOTE ]
They'd probably be in trouble from instsutional investors (i.e mutual funds, pension funds, etc). As a private investor, I'd love to invest in a company engaging in illegal activity

[/ QUOTE ]

I understand you probably say that half in jest but it's more than institutional investors. Investment banks, stock exchanges, everybody who has even a small amount of desire to remain respectable is going to stay away as well. In most public offerings the vast majority of stock is sold to institutions. It would be near impossible for Stars to find a $1.6 billion valuation selling to normal investors. And even if they could raise enough money to make it worthwhile, they would have a hell of a time floating the offering without investment bankers or an exchange.

[ QUOTE ]
Since we know that you can't be extradited for an offense that's legal in your home country

[/ QUOTE ]

Technically correct but falsely based on the assumption that many of the upper echelon of management of these companies are not US citizens.

[blueodum]

Think about it this way, if I hold a liquor license in Canada, can I legally sell booze to Americans?

Yes - if the Americans come to Canada.

[blueodum]

You mention chess. The world chess championship is not played over a single game, or even three. It used to be decided over 24 games. This was because anybody could have a bad day...i.e. be unlucky. But over time, skill will exercise itself.

It's because the contestants are very close in skill level, so a large number of games are needed to provide a reasonably meaningful result. It would be like a free-throw shooting competition between Calvin Murphy and Larry Bird.

[blueodum]

In both cases the prize pools are equal to or in excess of the entry fees. Raking the game is usually what makes it illegal.

No. Most low level chess tournaments take money out of the prize pool for costs (just like poker tournaments). Only major tournaments, which can attact sponsors, add money to the prize pool. They are generally for "professional" chess players.

And don't scrabble tournaments do this as well?

[Billman]

[ QUOTE ]
Think about it this way, if I hold a liquor license in Canada, can I legally sell booze to Americans?

Yes - if the Americans come to Canada.

[/ QUOTE ]

Go read the post. I specifically said that an American going to Amsterdam and smoking out is perfectly legal but that doesn't mean you can open up Bulldogcafe.com and sell pot to US citizens while they're in the US.

[PokeReader]

1. All publicly listed companies must follow the laws and regulations of all jurisdiction in which they operate. They would gain additional civil liability if they knowingly violated U.S. laws.


2. In a surprise case last year, the U.S. successfully extradited a British banker for his role in the Enron case, for violating U.S. laws while in Britain.

3. I completely agree that the underlying case law the internet poker is illegal on the face of it via the '61 Wire Act is very weak. However, the new legislation is not dependant on that precedant and will not prevent the extradition and prosecution of employees of IG companies. They will have an interesting case on appeal, that the gov't shouldn't be able to restrict interstate commerce if there is no underlying criminal act. However, unless they are able to bond out while out on appeal I don't think this will be a great comfort, as the appeal may take as long as the sentence.

4. PokerStars and Fulltilt are both licensed by an Indian tribe in Quebec, while Canada does not recognize these licenses it may that because the new legislation is entirely based on the federal gov'ts right to legislate interstate commerce they feel they have addition protection, as recognized Indian tribes have a special legal position via a via interstate commerce regulations. I am still not sure why they are confident they will escape extradition, and probably worse from their point of view, the confiscation of their assests. Hopefully they intend to challenge to law on it's face and have good legal advice.

[Zetack]

[ QUOTE ]
[ QUOTE ]
In both cases the prize pools are equal to or in excess of the entry fees. Raking the game is usually what makes it illegal.

[/ QUOTE ]

No. Most low level chess tournaments take money out of the prize pool for costs (just like poker tournaments). Only major tournaments, which can attact sponsors, add money to the prize pool. They are generally for "professional" chess players.

And don't scrabble tournaments do this as well?

[/ QUOTE ]

I have to agree and say the first quoted poster doesn't know what he's talking about.

In NC for example, its illegal to bet on a game of chance. Given that nobody thinks, chess, tennis, or say, footracing, is a game of chance its clearly legal regardless of whether somebody is raking the prize pool.

In fact there are cases that specifically say betting on pool (and I belive bowling as well- I'm too lazy too go look it up) is legal in NC under the anti-gambling law because those are not games of chance. [Let me be clear here, lest somebody fall afoul of the law based on what I say - its legal to bet on pool in NC if you are one of the players, if your are a spectator it is still illegal].

The laws of the various states will vary of course, but I anticipate that there are a number of states where the game of chance/game of skill distinction is very significant.

--Zetack

[Zetack]

[ QUOTE ]

That said, the game-of-skill argument is pretty hopeless. Poker has been around for a long time and I don't know of any state that has accepted that argument.



[/ QUOTE ]

I don't know that its hopeless. I'm having trouble finding a case interpreting NC law for example, that specifically says poker fall under our anti-gambling statute (which uses the term "game of chance". There is a NC Supreme Court case dating from the 1890's that assumes poker is illegal gambling, without providing any analysis. I have no idea what law was in effect at the time.

More recently, the NC court of appeals had this interesting language, in holding that video poker was illegal, differentiating it from real poker:

[ QUOTE ]
At the summary judgment hearing in the instant case, plaintiffs presented affidavits of experts on mathematics and statistics to the effect that a knowledge of the law of probabilities can sway the outcome of the video game, and that the game's "skill stop" feature allows a player with good hand/eye coordination to fare better than a player whose coordination and dexterity is poor. Plaintiffs acknowledge, however, that except for knowledge of the law of probabilities, all of the skill elements associated with the ordinary game of draw poker are absent in the video version. The game of draw poker, played against other individuals, permits a player to use psychology, bluffing, and knowledge of the law of probabilities relative to the game of poker, to increase his potential win relative to the total number of games played. Psychology and bluffing have no effect on the final outcome of play when playing electronic video poker. See U.S. v. 294 Various Gambling Devices, 718 F.Supp. 1236, 1243 (W.D.Pa. 1989).

[/ QUOTE ]

I've more recently read a newpaper article on a case where the state attorney general said that its quite clearly established in case law in NC that poker falls under our anti-gambling statute. I'd love to get my hands on the brief in that case, cause I'm not sure what cases he's relying on to say that.

--Zetack

Edit: If I were arguing the other side, I would take this NC Supreme court case from 1955 involving operating a game of chance or a table for a game of chance, that being poker:

[ QUOTE ]
(1) charging in No. 55-112 the offense of unlawfully, wilfully and knowingly allowing a game of chance, to wit, poker, to be played, in which money was bet, on his premises known as Little Haven Grocery, located on U. S. Highway 103, in violation of G.S. 14-293, and (2) charging in No. 55-114 the offense of unlawfully operating a gaming table, to wit, a poker table, at which games of chance were played in violation of G.S. 14-295.

[/ QUOTE ]

However, the Court merely upheld the convictions, without any analysis.

[ QUOTE ]
3. Taking the evidence adduced upon the trial in Superior Court in the light most favorable to the State, this Court is of opinion and holds that it is sufficient to take the case to the jury, and to support the verdict rendered in each case. Hence the motions of defendant for judgment as of nonsuit were properly overruled.



[/ QUOTE ]

You can't tell from this whether the game of skill argument was even in front of the Court.

[Billman]

[ QUOTE ]
I don't know that its hopeless. I'm having trouble finding a case interpreting NC law for example, that specifically says poker fall under our anti-gambling statute (which uses the term "game of chance". There is a NC Supreme Court case dating from the 1890's that assumes poker is illegal gambling, without providing any analysis. I have no idea what law was in effect at the time.

[/ QUOTE ]

Here's a year old article on NC's views on poker: (http://www.pokernews.com/news/2005/07/north-carolina-poker-laws-challenged.htm)

[ QUOTE ]
Despite the fact that No Limit Texas Hold'em has become the game of choice for poker players across the United States, North Carolina state law enforcement agencies continue to crack down on businesses and companies that support the game.

[/ QUOTE ]

[Wake up CALL]

You were making some good points in your post till you wrote this:

[ QUOTE ]
If you do not make blunders, in either Poker or Chess, you will rarely have a losing session. That says "skill," to me.


[/ QUOTE ]

All credibility went Bye Bye!

[blueodum]

I read that article about NC. There are two issues:

1) Are NC authorities claiming that playing poker for NO PRIZES is illegal? If so, this is absurd.

2) Is poker a game OF chance. To me, this is disputable and I gather from the previous poster that that this has not been tested in court in that state.

[Roba1111]

[ QUOTE ]
Chess is clearly a game of skill because even on his best day a bad player can't beat a grand master. Though poker is also a game of skill, any donkey can win against the best pro in the world over a hand, a session, or even some other longer period of time. You know how we all laugh at those people who claim a site is rigged because they've played 300 hands and haven't gotten aces? Yeah, now think of that in reverse. If poker is a skill game, how come the best pro in the world only has a minuscule advantage over a donkey in any particular hand? Most states ask if it's overwhelmingly a game of skill. 51/49 doesn't qualify.

[/ QUOTE ]

Saying a donkey can win a hand vs. a pro is the same as saying a bad chess player can take a piece from a grand master, obviously it happens, but poker isn’t about 1 hand, just like chess isn’t about 1 move.

[MiltonFriedman]

"Would you be willing to accept that operating any sort of gaming (skill based or not) is illegal in every state if the operator does not hold a license?"

You likely should look at the statutes for each State.

How many provide that it is illegal to operate an establishment or premises within the State that offers gambling without a license ?

How many States tie operations entirely to activity within a State ? Do you think their State laws are written to apply extraterritorially (?) ?

Didn't UIGE Act expressly say it was not going to alter or expand States' laws ?

So, aside from States with express laws against Internet gambling by players or operation of sites, where is a State law violation ... ?

[Wake up CALL]

[ QUOTE ]
Saying a donkey can win a hand vs. a pro is the same as saying a bad chess player can take a piece from a grand master, obviously it happens, but poker isn’t about 1 hand, just like chess isn’t about 1 move.


[/ QUOTE ]

Poor and incorrect analogy, a poker session can in fact end with one player being broke on a single hand wheras a game of chess cannot end in a single move other than by some extraordinary circumstance like a heart attack or throwing a tantrum and forfeiting the game.

[pseudoego]

Well, if you have a different opinion, why not post it?
Are you saying players frequently have losing sessions at both games even though they do not make blunders?

I do not know too many chess players who are blunder-free and lose frequently...same goes for poker. If they do lose, it is because they met up with someone better, not because of bad luck.

Or are you trying to contradict the theory of poker that says that if you always make positive EV plays you will win over the long run? Are trying to claim that people who make blunders can win frequently and consistently?

Ah, fuggedaboudit! You think that arguing logically is a problem in logical debate anyways, according to your sig ;-)

[pseudoego]

I do not know what kind of chess you have been exposed to, but players routinely resign after a single move occurs which makes it clear there is no point continuing because losing is inevitable. Plus, *your* analogy is the weak one.
A single game of chess is not equivalent to a poker session, although both can indeed end with one significant blunder.

[pseudoego]

Like I said, over time, skill will exercise itself.

Even Larry and Calvin can get a bad bounce, or hit a dead part of the rim...but over time, skill will exercise itself.

Gosh, aren't we talking about variance here?

[blueodum]

wheras a game of chess cannot end in a single move other than by some extraordinary circumstance like a heart attack or throwing a tantrum and forfeiting the game.

Actually it does routinely. In top class chess there is almost never a checkmate. When a top player sees that his/her situation is hopeless he/she immediately resigns.

[Self Made]

[ QUOTE ]
Would you be willing to accept that operating any sort of gaming (skill based or not) is illegal in every state if the operator does not hold a license?

The law then would apply in the following way: If the operator accepts a bet from a player who is in a state that requires that gaming operators be licensed, the operator is in violation of the UIGEA.

[/ QUOTE ]

Not true. The UIGEA requires that the gambling be illegal in state where the bet originates, not the operation of a gambling site, for there to be a S5363 crime (accepting payment). Here's the exact wording, at S5362(10)(A) (the definition of unlawful internet gambling): "where such a bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made."

So the gambling, not running a gambling operation, has to be illegal where it's initiated. That's a common misconception about the bill.

There's a similar misconception regarding the Wire Act: it doesn't outlaw any type of gambling, not even sportsbetting. It applies only to those operating gambling businesses. The relevant line is, at S1084 (a): "Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility..."

[Self Made]

I previously posted the following comments about the Humphrey analysis on another forum:

He believes regulations could prohibit transfers to companies like Neteller. The law does state, however, that the regs must insure that no transfers not covered by this law are blocked (not all of Neteller's business is with gambling sites).

I do disagree with Humphrey on a few points:
- He states that ISPs can be ordered to remove access to websites that link to gambling sites. It's clear from the wording of the bill that they can only be forced to remove hyperlinks to gambling sites, or entire gambling (e.g. online poker room) sites.
- He believes gambling violates the law of every state. Let's take the two states I'm most familiar with:
- - Massachusetts: Lotteries are illegal. It can't be assumed that all types of gambling are lotteries.
- - New York: Most people, including those in law enforcement, believe it's not illegal to place a bet in New York.

- He also generally assumes that poker isn't a game of skill under states' laws. I think it varies from state to state.

Humphrey's analysis makes it clear that he has a much more negative attitude towards online gambling than Rose, Cabot, and Shulman.

[Self Made]

[ QUOTE ]
That said, the game-of-skill argument is pretty hopeless. Poker has been around for a long time and I don't know of any state that has accepted that argument.

[/ QUOTE ]

Some states where there have been rulings that poker is a game of skill: California, Washington, Montana, Missouri, Oregon, and Colorado. Source: study by Anthony Cabot and Robert Hannum (http://www.dittus.com/comps/ppa/commentary/CABOTA2PDF.pdf).

[Self Made]

[ QUOTE ]
2. In a surprise case last year, the U.S. successfully extradited a British banker for his role in the Enron case, for violating U.S. laws while in Britain.

[/ QUOTE ]

Actually they violated US law both while in the US (Houston specifically) and the UK.

[davmcg]

[ QUOTE ]
[ QUOTE ]
2. In a surprise case last year, the U.S. successfully extradited a British banker for his role in the Enron case, for violating U.S. laws while in Britain.

[/ QUOTE ]

Actually they violated US law both while in the US (Houston specifically) and the UK.

[/ QUOTE ]

Actually no one knows whether they violated any laws anywhere. The publicity surrounding the case was mainly centred on the one-sided nature of the extradition treaty. The US did not have to present any evidence to back up their request.

[Zetack]

[ QUOTE ]
[ QUOTE ]
I don't know that its hopeless. I'm having trouble finding a case interpreting NC law for example, that specifically says poker fall under our anti-gambling statute (which uses the term "game of chance". There is a NC Supreme Court case dating from the 1890's that assumes poker is illegal gambling, without providing any analysis. I have no idea what law was in effect at the time.

[/ QUOTE ]

Here's a year old article on NC's views on poker: (http://www.pokernews.com/news/2005/07/north-carolina-poker-laws-challenged.htm)

[ QUOTE ]
Despite the fact that No Limit Texas Hold'em has become the game of choice for poker players across the United States, North Carolina state law enforcement agencies continue to crack down on businesses and companies that support the game.

[/ QUOTE ]

[/ QUOTE ]

You might also quote this from the article:

[ QUOTE ]

The confusion over North Carolina law has left the issue up to interpretations by various law enforcement groups. "Unfortunately, we have to deal with county-by-county understandings of the law and interpretations of the law," said Ryan Turner, one of the Poker Tavern League's organizers.



[/ QUOTE ]

Which seems to support the points I'm was making. I've seen assertions that Poker has been ruled illegal under NC case law, but I'm having trouble putting my finger on any such ruling, and the first case I quoted in my earlier post at least provides dicta in favor of an opposite ruling.

Bottom line, is poker illegal in NC? I've looked into it, and I don't know.

--Zetack

[Megenoita]

The Oregon Supreme Court held that poker is a game of skill.

[Megenoita]

In NH:

I. A person is guilty of a misdemeanor if such person knowingly and unlawfully:
(b) Gambles,

Note: "Unlawfully'' means not specifically authorized by law.

But:

(d) "Gambling'' means to risk something of value upon a future contingent event not under one's control or influence, upon an agreement or understanding that something of value will be received in the event of a certain outcome.

I believe it is arguable that poker is to some extent under one's control, and certainly under one's influence.

[aces_full]

[ QUOTE ]
[ QUOTE ]
Okay Billman. I think the counter arguement is that in certain states, I am not sure that opening up a pokerroom is illegal or requires a license because certain states require that these establishments take "bets", and they define "bets" as "dependent on chance". Well since poker is a game of skill maybe someone wouldn't need a license to open a straight pokerroom. Maybe I am way off base here.

[/ QUOTE ]

Hi SlapPappy,

Again, I will refer you back to Humphrey's site since he addresses this issue specifically. Please read the article as the guy is a lawyer and specializes in gambling law. I didn't make this up. Many of the states that do differentiate between games of skill and games of chance have a test. Chess is clearly a game of skill because even on his best day a bad player can't beat a grand master. Though poker is also a game of skill, any donkey can win against the best pro in the world over a hand, a session, or even some other longer period of time. You know how we all laugh at those people who claim a site is rigged because they've played 300 hands and haven't gotten aces? Yeah, now think of that in reverse. If poker is a skill game, how come the best pro in the world only has a minuscule advantage over a donkey in any particular hand? Most states ask if it's overwhelmingly a game of skill. 51/49 doesn't qualify.

And whether or not you accept the above . . . opening up a card room without a license in that state is illegal in all 50 states. Name a state that lets just anyone set up a card room. That state would have more card rooms than Vegas has casinos. The reason you can't name a state is that no state allows unregulated gambling.

[/ QUOTE ]

I tend to agree with Bill. I think that people who believe that this new law is meaningless are in denial. I have read the wording of the new law. Fact: The new legislation makes nothing legal or illegal. I don't think the federal government has any interest in making anything legal or illegal. This law is carefully written so as not to conflict with exisiting state and local laws. It even says so in plain english. What it does make clear is two things: The definition of "unlawful internet gambling" and that if someone is guilty of "unlawful internet gambling" they are not only in violation of state/lcoal law, but they have now committed a federal offense, and could be subject to the full power of the federal government.

The act makes it clear that the bet does not need to be illegal where the bet is taken, just that it needs to be illegal in the jurisdiction where the bet was made. So offshore, licensed, regulated companies are breaking US law by taking wagers from residents of states where these wagers are illegal. But most states don't have laws prohibiting online poker, but I wouldn't bank on that loophole at all. I am not a lawyer, and I calim to know nothing of other states, but here's what I have about my home state of Connecticut:

definitions:

Sec. 53-278a. Gambling: Definitions. As used in sections 53-278a to 53-278g, inclusive:

(1) "Gain" means the direct realization of winnings; "profit" means any other realized or unrealized benefit, direct or indirect, including without limitation benefits from proprietorship, management or unequal advantage in a series of transactions;

(2) "Gambling" means risking any money, credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance or the operation of a gambling device, but does not include: Legal contests of skill, speed, strength or endurance in which awards are made only to entrants or the owners of entries; legal business transactions which are valid under the law of contracts; activity legal under the provisions of sections 7-169 to 7-186l, inclusive; any lottery or contest conducted by or under the authority of any state of the United States, Commonwealth of Puerto Rico or any possession or territory of the United States; and other acts or transactions expressly authorized by law on or after October 1, 1973;

(3) "Professional gambling" means accepting or offering to accept, for profit, money, credits, deposits or other things of value risked in gambling, or any claim thereon or interest therein. Without limiting the generality of this definition, the following shall be included: Pool-selling and bookmaking; maintaining slot machines, one-ball machines or variants thereof, pinball machines, which award anything other than an immediate and unrecorded right of replay, roulette wheels, dice tables, or money or merchandise pushcards, punchboards, jars or spindles, in any place accessible to the public; and except as provided in sections 7-169 to 7-186l, inclusive, conducting lotteries, gift enterprises, disposal or sale of property by lottery or hazard or policy or numbers games, or selling chances therein; and the following shall be presumed to be included: Conducting any banking game played with cards, dice or counters, or accepting any fixed share of the stakes therein;

Sec. 53-278b. Gambling; professional gambling; penalties.

(a) Any person who engages in gambling, or solicits or induces another to engage in gambling, or is present when another person or persons are engaged in gambling, shall be guilty of a class B misdemeanor; provided natural persons shall be exempt from prosecution and punishment under this subsection for any game, wager or transaction which is incidental to a bona fide social relationship, is participated in by natural persons only and in which no person is participating, directly or indirectly, in professional gambling.

(b) Any person who engages in professional gambling shall be guilty of a class A misdemeanor

My interpretation of the above is that: Making an illegal wager-one that is based in whole OR part on chance (except for those that are exempt like lotteries, legal B&M casinos) is a crime, so then the person making the bet is breaking the law. It also seems clear that accepting wagers (professional gambling) is illegal. It seems then that players AND offshore gaming sites are both breaking Connecticut law.

Furthermore....

Sec. 53-278d. Transmission of gambling information.

(a) Any person who knowingly transmits or receives gambling information by telephone, telegraph, radio, semaphore or other means , or knowingly installs or maintains equipment for the transmission or receipt of gambling information, shall be guilty of a class A misdemeanor.

Right here, this seems to clear up any confusion about the legality of online poker. The internet is not mentioned, but I'm sure "other means" covers the internet. It also seems like the bettor and the person taking the bet are guilty of a crime. Under this section, any offshore company taking wagers from Connecticut residents is now also breaking federal law regarding unlawful internet gambling.

State laws do not need to expressly prohibit internet gambling for these activities to be illegal. I also think our Attorney General would agree that offshore internet gambling in Connecticut is illegal. Two years ago (much like the NC article quoted) restaurants and bars tried to cash in on the poker craze by hosting tournaments. Social gambling is legal in Connecticut-that is games where the house has no interest in the outcome of the game. This makes unraked home games legal. All prize monies in the prize pool must be paid out to entrants. Business owners figured that as long as they were not taking any rake, then holding tournaments was perfectly legal under Connecticut law. Some restaurants even advertised thses tournaments on the radio and TV. This didn't last very long before our AG Dick Blumenthal put an end to it. He said that the restaurants and bar owners were in violation of state law even though they did not take a rake. By making the games open to the public and held regualarly, they fell under the definition of "professional gambling" (cited above) even though the house had no stake in the outcome of any event.

I remember seing a bit about this on TV at the time it happened, adn in his parting comment, Blumenthal mentioned that these tournamaments were also in violation of a compact that the state of Connecticut has with the two Indian tribes that run casinos here. The casinos have exclusive rights to all non-lottery gaming in the state of Connecticut.

So is online gaming legal in states where there is no law expressly prohibiting it? I don't think so.

[Wake up CALL]

[ QUOTE ]
I do not know what kind of chess you have been exposed to, but players routinely resign after a single move occurs which makes it clear there is no point continuing because losing is inevitable. Plus, *your* analogy is the weak one.
A single game of chess is not equivalent to a poker session, although both can indeed end with one significant blunder.

[/ QUOTE ]

For all those who refuse to realize my intent was to imply on the first hand of poker and on the first move in a chess game please move along, nothing here to see.

[MiltonFriedman]

1. Dormant Commerce clause
a. Can Connecticut regulate Interstate or foreign commerce, and, if so, can each State regulate it differently /
b. Can the Federal government delegate separately its authority over Interstate Commerce to each State /

2. Does Connecticut criminal otherwise law exercise extraterritoriality over Interstate and foreign commerce ? The bars/restaurant story, while interesting, is not relevant in that regard.

3. There is no federal common criminal law. The Act expressly says it is not expanding or altering State laws.

4. As the Act Section 5363 prohibitions are expressly limited to businesses which are engaged in betting or wagering, and then defines bet or wager to require a stake in the outcome, it really should not matter federally if Connecticut outlawed poker businesses, unless those businesses also fell under the Federal Act.

5. As a legal matter, a site should avoid violating State laws ... but their burden to avoid 50 different State laws may be impermissibly a burden upon Interstate Commerce.

[Self Made]

[ QUOTE ]
What it does make clear is two things: The definition of "unlawful internet gambling" and that if someone is guilty of "unlawful internet gambling" they are not only in violation of state/lcoal law, but they have now committed a federal offense, and could be subject to the full power of the federal government.

[/ QUOTE ]

There's nothing to that effect in the law. The new crime is accepting payments with regards to unlawful internet gambling. It doesn't make gambling a federal crime.