Towards drafting a model statute, legalizing poker

[Wynton]

We all know that the collective rules and statutes applying to poker in the US amount to a confusing mess. Understandably, relatively few people have much idea whether poker is legal in their state, or to what extent. So, I was wondering whether it might be possible to draft a model statute, which could theoretically be adopted by any state. If nothing else, such a model statute could make it easier to lobby the various legislative bodies.

The first step - and quite possibly the most difficult - would be agreeing upon some general goals. To start with, we might want a model statute to do the following:

-provide that playing poker (live or online, in a private or public place) is permissible;
-clarify that, notwithstanding any other statutes, poker shall not be considered to be "gambling";
-distinguish live poker from video poker, which could still be regulated like slot machines;

Now, here is where it starts to get tricky. My view is that live poker needs to be regulated in some, minimal way; otherwise, I don't think it would be politically feasible to promote poker. Possible regulation might include setting specific limits on the stakes, as some states already do. Another possible regulation could be a system for requiring poker rooms to go through a license approval process, during which operators agree to abide by certain security measures.

These suggestions are only the tip of the iceberg, of course. The fundamental goal would be to provide for enough regulation to ensure safe games, acceptable to the public, without making the regulations so intrusive as to ruin the game.

Do you think that it's worthwhile to try to draft such a model statute, or is this a total waste of time?

[BluffTHIS!]

There needs to be an incentive to legislators on both state and federal levels, who while not opposed to poker, see no political benefit to themselves in backing legalization and bucking the anti-gambling crowd. This incentive needs to be a groundswell of support by everyday gambling joes, which could best be had by online sites and the WPT running ads promoting this idea or backing the Right To Wager initiative which as of now is primarily backed by sports bettors. The other possible incentive is of course the potential of tax revenue.

[TruePoker CEO]

VERY good idea.

I do not think it is a waste of time, if done as an article for a respected professional journal.

Thanks for the suggestion, I'll see if I can get the topic approved for an article for a journal I used to work with.

Then I will see if some of the sites with a LOT at stake are willling to underwrite the work of producing a scholarly piece on the topic.

Truepoker CEO

[Trouthunter]

Where's NCCUSL when you need them? Probably banging away on that stupid UCC. I swear to God if I have to learn a new Article Nine again, I'll punch someone in the teeth.

I think this is a great idea, but even if you get it put together, how would you go about getting it adopted? Most uniform codes deal with interstate business issues (UCC, RUPA, etc.), where businesses acting interstate have a reasonable expectation of what they are going to be dealing with, or they deal with major social issues, like the Model Criminal Code, or whatever the name of that thing is. Aren't legislators going to see this as legislating morality (which is a stupid argument, but what do you expect)? If so, what plays in California, probably won't in the Bible belt.

It seems like a tough sell, but I suppose if you could get even one state to adopt a clear, comprehensive gambling code that recognized the difference between poker and slot machines, then it would be worhth the effort. I volunteer Washington, lol.

Seriously, I like the idea of limiting the stakes and providing for licensing of cardrooms where a rake or fee is taken. Beyond that, I think charity games and free games where the house provides space but no dealer should be legal, and, of course, I'd like to see internet poker be made expressly legal. I don't believe the state can exert authority over out of state companies that run the sites, and it is ridiculous to be able to prosecute participants for something for which you can't prosecute the organizers.

[grapabo]

A few thoughts (sorry that they're not more organized):

1. I don't think the regulatory route for live poker and for internet poker can be administered on the same tracks. The states that allow for brick and mortar gambling also have government bodies that keep a close eye on who is operating these businesses. They can do so, because the location of the casino (and the possible riff-raff) is within the physical boundaries of the state.

With internet gambling, the jurisdictional questions become much more difficult. To make this type of gambling safe and legal would probably require some federal legislation. (Missouri was able to extradict an internet gambling business operating in Pennsylvania and force a plea bargain, but I doubt that it would be able to do so with an out-of-country online gambling establishment.)

2. As long as there is the option of internet gambling, it's going to be a more difficult sell to the state authorities about the benefits of licensing more casinos and relaxing its gambling restrictions. If an offshore company can bring gambling to your home, offer more games with a wider range of betting levels, and without the extra cost of food and drink at the establishment, that's going to make the expansion of brick-and-mortars more difficult to justify. The online sites will have a tax-free advantage, in addition to the other expenses that visitors to a brick and mortar might spend that they don't while sitting in their PJ's at home making money off of donkeys.

I realize that the brick and mortars feel less threatened by the online sites than before, but there's got to be a saturation point where expanding brick and mortars results in a competitive disadvantage for gambling revenues versus the online sites. Las Vegas and other selected places have the attraction of other places to see along with gambling. There are only so many Harrah's that Rick Springfield, Styx, and other such acts can visit across the country to add to the gambling attraction.

[Wynton]

Of course, I agree that any poker legislation is a "tough sell," but I do believe that a model code might be a useful lobbying tool. If nothing else, it provides people with a concrete example of what legalized poker would look like.

I also agree that the states cannot realistically regulate internet poker as well. Thus, the most that a model code could say is that the state does not prohibit internet poker(or at least doesn't prohibit playing on the internet), without commenting on federal rules. Beyond that,I'm sure it would be a mistake for a state to try to regulate internet poker.

I'm still interested in eliciting more views about what specific rules poker players would like (or tolerate) concerning brick and mortar games. Any more thoughts about that?

[BluffTHIS!]

There shouldn't be any rules on poker mandated by the government. It self polices itself like in California where if a joint is crooked or not well run, the the customers go elsewhere (although Cali adpoted a regulatory commsision a few years ago, I don't think it actually ever did anything). Trying to come up with such a regulatory scheme, is just a sop to the anti-gambling crowd, who if they can't stop some form of gambling being legal, want to limit it and regulate it. I don't believe that is the way to go.

The carrot of tax revenue from offshore poker sites (or onshore if legalized here like South Dakota state senator is trying to do), is what will lead the governmental donkey down the path we want.

[Wynton]

Sure, it would be nice if there were no poker rules at all. But we're living in a world where many jurisdictions outlaw poker, in some form or another. And I don't think it's realistic to believe that those jurisdictions will simply declare poker legal, without some kinds of controls.

[BluffTHIS!]

California did. Give em tax dough and they won't care.

[TruePoker CEO]

'I swear to God if I have to learn a new Article Nine again, I'll punch someone in the teeth"

Article Nine is very simple: Two Rules

1. Bank wins (I wrote this at the top of every Article Nine analysis I ever did, it worked like a charm.)

2. If you failed to perfect, you should be shot for stupidity.

[Mason Malmuth]

Hi CEO:

Keep us informed how this goes. It would interesting to see what sort of reaction an article like that gets.

Best wishes,
Mason

[Trouthunter]

[ QUOTE ]
'I swear to God if I have to learn a new Article Nine again, I'll punch someone in the teeth"

Article Nine is very simple: Two Rules

1. Bank wins (I wrote this at the top of every Article Nine analysis I ever did, it worked like a charm.)

2. If you failed to perfect, you should be shot for stupidity.

[/ QUOTE ]

Most of my clients are banks - trust me, they find ways to screw it up. I'm putting my kids through college on banking errors.

On Poker regulation, I don't like the idea of limiting limits. Make them as high as people want to go.

I think we need some oversight and training, though. Make card rooms responsible for knowing the gambling regulations, make sure their employees understand the games and have some training in spotting collusion/cheating/problem gambling, etc. You have to prove competence to get a driver's license (although you don't have to maintain it) You might as well have to prove competence to get a dealer's or operator's license.

I would also be ok with limiting the number of licenses given out in a geographical area, as long as it was a reasonable number and there were fewer rules on the number of games a card room could have. (i.e. - there can be x cardrooms per 100,000 people in a y geographic radius, but those cardrooms can have as many tables as they want to keep up with the demand). I haven't fleshed that out, but it seems that it would be easier and cheaper to regulate fewer large cardrooms than many tiny card rooms.

[Bob Ciaffone]

Some of this work is already done. Check out my new website, www.fairlawsonpoker.org (http://www.fairlawsonpoker.org) and you will see my link to Chuck Humphrey's website page on gambling law, where he and I have drafted a model law for player protection. Or you can go to the recommended law there directly:
http://www.gambling-law-us.com/Articles-Notes/social-game-proposal.htm

[Wynton]

Figures that as soon as I have an idea I find out someone else did it first.

That proposal is interesting, and even at a quick glance, I know that I have some suggestions for modifications, which I'll detail later.

But one comment I'll make quickly. I believe that we need to be more specific when discussing possible economic benefits, as that phrase could be twisted (even though I understand the proposal). And I also envision a proposal which explicitly allows a host some indirect economic benefits, such as a restaurant receiving more business.

Still, I do think that the proposal is a good start towards player protection.

[spock]

Interesting thread, I'll point the one pro-poker legislator I know towards the model law.

[PJM1206]

I have a comment on the goals. The notion that poker is not gamblimg is not beleivable in my personal opnion and I think you open the issue up for debate. You may convince some folks it is not gambling but I think the vast majority of people would condsider it a form of gambling. I think you should either eliminate it all together or change it to something like poker requires skill to win. I think that is more defendable as you go forward.

just my thought as I read you post which was great by the way!

[Wynton]

PJM,

The goal here is not to win a semantic argument about the meaning of "gambling," but to persuade people that poker should be treated differently from playing roulette, slot machines or many other games with relatively minimal skill.

As a practical matter, it may be necessary in some jurisdictions to redefine gambling so that it does not include poker. For example, in NY there is a constitutional ban on "gambling," though the constitution does not define that term. But in other jurisdictions, the laws might be amendable to permit poker without getting into the esoteric question whether poker constitutes "gambling."

[BluffTHIS!]

Wynton makes a valid point here, and is also correct that without a great deal of education the average non-mathematical savvy legislator or voter won't see the difference between a -EV casino game and a +EV game like poker. So the thing to stress perhaps, is that just like a home poker game, poker is a game where people play against other people with a fair gamble. The same argument should allow wagering on any other game like backgammon, chess or whatever. The only problem with what I have just said, is that sports betting while +EV is seen as betting against the bookie (which it is), and sports bettors are needed as allies to help get poker legalized and/or treated differently.

Despite the fact that live poker, and especially tournament poker, depends on casinos for its legal existence except in Cali which doesn't have normal casino games where one bets against the house, there is a clear divergence of interests between us and vested casino interests, who will seek to erect and maintain barriers to entry for legalized gambling that doesn't include their profiting, even though poker room revenues aren't squat compared to a couple banks of slots.

But overall, I think the point to stress is people gambling with other people, and not a billion dollar casino built on the losses of the great majority of those who enter.

[Trouthunter]

One of the problems that has to be overcome is the inate desire among elected officials to protect people from their own self destructive behavior. Whether it's gambling or not is semantics, and the fact that poker players play each other and control the outcome of the game to some extent as opposed to playing the house is not a difference that makes a difference in the eyes of a legislator who thinks that anti-gambling statutes actually do some good towards eliminating gambling addiction, or, more cynically and probably more acurately, a legislator who believes that if he or she tells his constituents that he or she fought for the well being of gambling addicts that it will garner more votes.

Maybe the thrust of the argument should be towards reasonable limitations that appeal to legislators but still allow us the freedom to make the decision to play without the fear of governmental reprisal.

I think that's what Wynton was looking for anyway - rather than flat out legalizing all gambling in all it's forms without limitation, what limitations do we, as gamblers (because as poker players, that's what we are, like it or not) think are reasonable.

[grapabo]

If we're looking at drafting a body of law to make poker safe and legal, it may be that removing the legal barriers to poker might be the easy part. It doesn't take much to remove the legal restrictions on gambling and make a declaration that games of skill (vs. games of chance)are not prohibited.

What may be more cumbersome is how to make sure that this game is kept on the up and up. In states that allow gambling, there's always an adminstrative body (the state gaming commission) to do the specific oversight that legislation wouldn't be able to address.

The game of poker is a double-edged sword, in that you don't have to be a world-class athlete to play, but you also don't have to be a world-class athlete to fix the game either (as opposed to a basketball player who is good enough to do a point-shaving scheme).

The point of this is that in order to draft a legal schematic for poker, the legislation may involve nothing more than creating the administrative body to oversee it, and then the guts of the oversight would be in the form of this agency's rules and regulations.

[PJM1206]

Understand, good points. I would really love to see this succeed.... maybe some research or thoughts on how alcohol was legalized may help come up with arguements. There has to be a huge windfall for states to capitalize on revenues from poker playing

[ChrisAJ]

I think the only pro-poker legislator in Virginia is no longer in office.

[Easy E]

[ QUOTE ]
poker shall not be considered to be "gambling";

Do you think that it's worthwhile to try to draft such a model statute, or is this a total waste of time?

[/ QUOTE ]

If you change that to "poker should be considered a different kind of gambling" then we can agree.

But no, I don't think this is worth your effort.