Ladies and gentlemen of the court, at this time I would like to introduce my first subject, Chris Moneymaker. His case will show how a person with "more luck than skill" can still win playing poker.

As a counter to my first subject, I would like to introduce this young lady. Her name is Annette Obestrad. Her case will show how a person can "reject" the luck (and skill) of the other players, using nothing but skill. After all, her cards were never a factor in her decisions because she never looked at them.


Something like that folks.

I'm terrible at this legal stuff, but I'd look at these 2 extreme cases to see if there's anything helpful in them..

Can't you prove that CMM had to catch cards in order to win Vs. AO, who never once relied on her cards (or really catching cards) at all?

It seems like there's something there, but I'm probably wrong. There has to be a way to show that even with skill AND luck, pure skill can overcome the odds that you'll unluckily get beat by the deck.

It's really a very ****ed up argument to make. It reminds me of when I quit my job and told my father I was going to start playing poker. I came up with all these statements about how playing poker correctly was more akin to being the house and in the long run, the better players ended up with the money.

He wasn't hearing it. My father was a compulsive gambler, go figure.

Whether the position is right or wrong is for a court to decide, but people with a lot more riding on the issue than I do (partypoker Diksjit, eg) decided taking a $300M plead and admitting in open court that online poker was a violation of the Wire Act was a better option than making your argument in court.

Poker sites for years claimed the Wire Act didn't apply because poker was a game of chance like every other casino game, so now that the other casino games are illegal to promote online it makes little sense that they could seek refuge by calling it a contest of skill.

The simple language of the wire act makes no exception for those who are participants in the sport or contest, by that logic it would be perfectly legal to run a sports-book on the internet as long as you only catered to participants in the contests under the condition they bet on themselves.

This is a ludicrous, but predictable, analogy...
Typically made by unsophisticated people.

Do you not understand the capitalist system...
Which forms basis for US democracy and economy?

It works by allocating capital via financial markets...
And the RISK associated with capital allocation...
ENSURES THE EFFICIENT ALLOCATION OF CAPITAL...
Thus fulfilling a crucial social and economic function.

Capitalism is best known alternative to Central Planning.

The capitalist system cannot be viewed as a "game"...
In sense that cards or dice are NOTHING more than game.

And all one can say about the DOJ response...
Is that they are going full-steam ahead with prosecution...
Exactly as expected.

Yes, the United States is (semi) capitalistic, which is where the markets fall in, but it's also a country founded on "liberty and pursuit of happiness," which is where poker falls in.

Traders trade for the same reason poker players play - to make a profit. When a trader trades, whether he knows/cares or not, he creates liquidity in our financial markets as a byproduct. When a poker player plays, whether he knows/cares or not, he supports an industry that will create tens of thousands of jobs and lower the deficit billions each year without raising taxes as a byproduct.

Calling trading a game is just semantics. Plus, when you trade with a dealing desk forex broker, what role are you playing in the actual forex markets? None!

Playing online poker is not an illegal activity (except in the insane state of Washington), online gambling isn't an illegal activity - we can make all the bets between each other we want, it's unlawful, so if I welch don't expect to be able to take me to court, but not illegal.

As long as this website doesn't encourage us to make bets, assist us in making bets, profit from our bets or advertise that this is a great website to make money on wagers they run no risk by allowing people to gamble, whereas the poker sites do all of the above.

But hypothetically if this site got a legal opinion that assisting us in making prop or sports bets by offering to stake our wagers was cool, and did so with the promise our wagers were secure, the fact that what they were doing was illegal doesn't excuse them for also committing fraud if they spend all our money.

The Wire Act has nothing to do with this case.

Why not? In blackjack, optimal strategy is very simple and so luck is obvious. In poker, optimal strategy is just more complicated, surely a game theory optimal strategy to all forms of poker exists and if everyone played optimally then the cards WOULD be the sole deciding factor in whether you win or lose. Poker just gives you more room to make mistakes, and makes many of those mistakes less obvious. These mistakes are rampant enough in poker for astute players to show consistent winnings despite their own mistakes, but mistakes are rampant in blackjack too. At low stake tables, nearly half of a casino's profit in blackjack is generated through player mistakes. If Caesar's published an earnings report where they showed that 51% of their blackjack profits were due to player error could they then legally open up a website where Americans could play online blackjack?

I've said it before and I'll say it again, trying to argue that poker isn't a form of gambling is just not going to be effective. People like to pretend that it's because the average person doesn't know any better, and while I do find their ignorance painful, an educated statistician should reach the same conclusion. An effective argument to getting poker regulated are going to libertarian and economic in nature, backed up by empirical evidence that legal online poker in other countries hasn't driven their population into degeneracy.

When the DOJ themselves site that both poker and sports betting involve skill, and compare raking a pot to taking a percentage of a sports wager, it's fairly clear that the wire act will be their fall back position should poker somehow be ruled not to involve a material degree of chance. It's a catch 22.

No. A model that shows this is in my book Gambling Theory and Other Topics. For small samples the luck factor increases relative to the skill factor. This only reverses after a fair number of hands are played.

This has to do with the short term standard deviation being much larger than the short term win rate. But since the standard deviation is proportional to the square root of the amount of time played (or number of hands) while win rate is proportional to the amount of time played (and not the square root) the win rate of a skilled player will eventually dominate the results.

Not in the short run.

The key here are the words I bolded.

I agree that reading hands can reduce the luck factor for a skilled player.

Best wishes,
Mason

Hi Skall:

I hope you never testify on this subject. Your statement:

reminds me of a talk I once heard where the speaker claimed that video poker was completely luck because once you choose what cards to replace, it is then completely random as to which cards then appear.

Also, you can certainly play poker against the house. The Bellagio, and a number of other casinos in Las Vegas now have poker hold 'em slot machines. There has been much discussion of these machines on the forums.

Best wishes,
Mason

A few quick points. I as a professional statistician would quickly destroy the poker is a skill game argument that the PPA has used. In fact, it's my opinion that this argument has set back the cause and I have communicated to the PPA where the errors were. And before anyone asks, I spent six years working as a professional statistician with the US Census Bureau and five years working as a statistician with the Northrop Corporation.

By the legal definition poker is clearly a game of chance. That's because on any poker hand, the luck factor will dominate. But what sets it apart is that there is also a skill factor that over time becomes large relative to the luck factor.

Your point #3 is the important point. The way I understand it is that the PPA didn't approach it this way, and that's why I believe they damaged the cause, and this includes and article I read under D'Amato's signature.

As for your point #4, I could make the exact same argument pertaining to craps. This is partly why I say that a professional statistician who has a knowledge of gambling/poker would destroy these arguments. You may want to look at my book the Fundamentals of Craps to see where the skill plays are.

As for your point #5, I have no idea who Professor Robert Hannum is, but you can tell him that claiming that poker is a game of predominately skill is wrong, just like claiming that poker is a game of predominately luck is wrong. But what I find most amazing is that probably the two most knowledgeable people on this particular subject are David Sklansky and myself, and yet and the PPA go and get someone we never even heard of (and probably paid him a substantial fee when we would help you for free). By the way, I wrote a whole book on this subject, and to mention it again, it's called Gambling Theory and Other Topics, while David wrote a book called Getting the Best of It which also has much relative material to this subject. Have you ever looked at either of these two, and is Professor Hannum even aware of them?

And in addition, I'm telling you that virtually every argument (that I'm aware of) that the PPA made on the luck versus skill argument is not sound. Did your professor also tell you that?

Your point #6 is flat out wrong. For instance, a good mathematician would tell you that this statement:

is not well defined and thus makes no sense. You do understand that I can easily give examples where the outcome is decided by the cards or decided by what the players do. In other gambling games, such as roulette, this cannot be the case.

Skall: If this is what you're doing, I suggest you and your legal team come to Las Vegas and spend some time talking to me. As I've said on many occasions, a good statistician who also understands the appropriate gambling games well, and that includes poker, would destroy all these arguments.

And one final point. You wrote:

To me, while this is certainly a non-trivial argument, it should be fairly straight forward and not that difficult to do.

Best wishes,
Mason

But I've been told that it's not well received in the courts. What happens, again as I was told, is that the prosecuting attorney turns to the judge/court and says something like, "Use common sense, everyone knows poker is gambling," and of course he is correct.

Your stating that "poker is not gambling" is a disservice to the poker community. What you should be saying is that poker is a unique form of gambling where the skill factor is large enough that good players will beat bad players in the long run.

Best wishes,
Mason

It's late, and I don't know where to begin on this one. But the cards you hold certainly influence your decision, and to say that the outcome is dependent of the decision and not the cards is just silly.

Again, this goes back to statistical arguments. How correlated are the value of the cards and the decisions made? Also, comparing this to a football game where a team with poor game statistics wins the game is a poor comparison to poker. That's not the same as bluffing which is what I think your statement implies (whether or not you meant for it to do so ).

Mason

Hell, the stock market is gambling. The house you buy is a gamble on the housing market (a bad one as of late..lol). The money you choose not to spend is a gamble...a wager on the value of that medium of exchange's value as compared to alternative gambles (investments) you could of made. Everything you buy that you do not consume immediately is an investment/gamble. The milk in your fridge is a gamble it won't go bad before you consume it (assuming you didn't buy it for the satisfaction of watching it go sour).

Everything is gambling. Life is a gamble. 1.2 million Americans die a year from automobiles, 30,000 from the flu, 15,000 American arthritis patients die from SAIDs (anti-inflammatory drugs as weak as asprin), 20,000 die from all illegal drugs combined, 400,000 die from alcohol, 430,000 from tobacco, 4,000 die in home fires, and 13,000 from gun murders (33,000 from murders+accidents+suicides;suicides make up more than 50%).

This is why I'm always telling people that guns, drugs, terrorism, and disease are overblown threats the media spew. The fact is you are more likely to die in your house in a fire than of terrorism IF we had a 9/11 every year (which thank God we don't). You are more than twice as likely to die of the flu than from a gun murder, and 20 times more likely to die drinking than doing illegal grugs. The Swine Flu killed less people than the normal flu!

In the end, life is a gamble/investment. Whether you refer to it as an investment or gamble is just semantics imho (and a matter of how the authoritarians deem it who sit in power at the time).

The hypocrisy of it all is that if we really wanted to ban gambling, the first place to start is Wall Street and every mom and pop store with a stock room, not to mention everyone who carries cash in their pocket.

Gambling is a draw to most of humanity throughout history for a reason: we do it in every facet of our lives without having fun at it. It's nice to relax and have a lil fun sometimes. Degens are out there drinking, smoking, hoarding, drugging, speeding, etc. every single day...how is that NOT gambling exactly? If it wasn't gambling, it would be drugs, if not drugs it would be illegal drag racing, if not that it would be some other thrill seeking activity that helps escape reality. Degens gonna...you all know the catchphrase by now.

Illegal gambling is just tyranny, plain and simple. It's undefinable for a reason...it's everything you do. Even choosing to do nothing is a gamble (and a choice).

Life's a gamble

lol

anybody got more info on this? i wasn't aware the mafia was involved in payment processing...

say what

Reality is Sports books have paid out their congressman and Poker sites have not.

I watched 60 minutes last night and congressman can buy stocks based on insider information. So your congressman could have shorted a publicly traded poker site before black Friday knowing it was gonna happen.

stars ftp and ub aren't publicly traded



obv they went long on party

Hopefully any 2p2 sanctioned skill arguments will not include the famous Sklansky "lose on purpose" test.

Hi Mason,

While I am used to it at this point from others, I am somewhat surprised that you too are assuming things I am not saying and replying to that, rather than to the point I am making.

I do not know why my point that in BJ (other than the surrender move) each hand is decided by the turn of the cards reminds of you of someone who says "video poker was completely luck." My post already contains an appreciation for the skill involved in blackjack. The point of bringing up blackjack was precisely that it is a mixed game of skill and chance.

My point was simply that because the actual deal of the cards decide who wins and who loses each hand in BJ, the way skill v. chance is understood legally means that BJ is a game predominantly determined by chance.

"No amount of skill can turn a deuce into an ace" as a court once said.

The same is essentially true for video poker. Though video poker also involves a great deal of strategy, and of course the outcome of a video poker hand is influenced by which cards one chooses to hold or fold, and of course people who are better at knowing which cards to hold or fold will do better than people who do not - video poker is still a game predominantly determined by chance, according to the courts, because the end result of each hand is determined by the actual cards that fall.

And please, please note that this is not a position I am advocating for. Too many people seem to assume that I am responsible for using the predominance test and its various permutations. The PPA does not go into court saying "we want you to use the predominance test, your honor." The predominance test predates my birth by 250 years. It is the test the courts impose on us, not a test we choose.

If you are interested in seeing how this plays out in actual court opinions, a famous case holding video poker to be a game of chance is United States v. Marder, 48 F.3d 564, 569 (1st Cir. 1995). A good law review article on the topic can be found here: http://www.liebertonline.com/doi/abs...18802760019655

Skallagrim

yahtzee?

Hello again Mason,

Many folks are of the opinion that a lot of our legal system and law is "just silly." I am not here to argue with that opinion.

But lawyers are paid to parse words and draw specific detailed meanings from words and then apply them to real-world situations. And in law there is a meaningful difference between "influenced by" and "depends on."

I do not know how many times I have posted that "of course your cards influence your decision to fold." But speaking as a lawyer your decision to fold does not depend on your cards. If it depended on your cards then everyone dealt those same two cards in that same position would be required to make the same decision. That is how the word "depends on " is used in most legal situations. A result "depends on" a prior factor only if the prior factor alone is sufficient to require the result or if the prior factor were eliminated, the result could not occur.

So using the legal terminology an outcome in poker does not "depend on" the cards unless the cards alone mandate the result, or a different set of cards would make the outcome impossible. Since in poker the cards never mandate how you play (you can fold AA on the button if you want to) the cards are neither solely responsible when the decision is made to fold nor are specific cards necessary for a player to make the decision to fold.

Now again, I am hardly unaware that it is a common use of the phrase "depends on" to include factors that influenced a decision: "my decision depend on X." But common uses of phrases and legal uses of phrases are not necessarily the same.

It happens frequently in law that a word or phrase has a specific legal definition which is not the same as the general definition of the word used by most folks in daily life. The word "reckless" is a good example. According to Mirriam-Webster "reckless" means 1: marked by lack of proper caution : careless of consequences 2: irresponsible. In law "reckless" means "awareness of and conscious disregard of a substantial and unjustifiable risk." Accordingly, most folks will say someone is reckless when they are unaware of the risk they are taking; but at law a person is not reckless unless they know precisely the nature of the risk then take it anyway.

Thus you might correctly say someone is reckless for investing all their money in a single stock. But at law you are only correct if the person actually knew that there was a substantial and unjustifiable risk that they could lose all their money by investing in that particular stock and chose to invest anyway.

And yes, I also know that this is way a lot of folks hate lawyers.

Skallagrim

Can you cite a source for this legal definition of "depends on"?

And finally for today ....

The only jury that has ever heard a skill v. chance case was the one in Colorado where we argued that a poker tournament was not gambling because it is a "bone fide contest of skill." That jury returned a verdict of NOT GUILTY and the poker player went free. This happened despite the prosecutor arguing to the jury that "of course poker is gambling, use your common sense."

In all the other cases everyone in the courtroom knows that the legal question is precisely "is poker gambling." Gambling is illegal (or needs to be done under strict regulation), that is what the law says. If you go into court saying "well of course poker is gambling, everyone knows that" it would seem to me (and to the judge and the other lawyers) that you have just conceded the essential point and they would ask: "so then why are we here?" If you then try and salvage the situation by saying "well its a special kind of gambling ...." the court and prosecutor will simply wonder why you refuse to use the term "gambling" in the way the law prescribes it should be used.

As to the general public, it seems to me that poker players have had a fair bit of success convincing folks, at least federal politicians, that poker should be treated differently than slots, sports betting and casino games. Is this because we convinced them that there are 2 types of gambling, or is it because we have made them open to the idea that poker is different from those "gambling" games?

Skallagrim