By the way, I suspect that with respect to insurance contracts, they WOULD be considered bets or wagers (especially life insurance contracts) but for the fact that the law defines them differently. In other words, since you have comprehensive state regulatory schemes that determine when you can and can't sell life insurance, to whom, under what conditions, etc., obviously, statutes that prohibit "bets or wagers" don't apply to that enterprise.

Indeed, there are unambiguous forms of gambling that this is true about. For instance, in a number of states, church bingo is exempted from gambling statutes and is instead subject to separate regulation as to when it can happen, who can play, what the stakes can be, who can operate the games, etc. If those statutes did not exist, church bingo WOULD fall within "betting or wagering" statutes.

I don't think it has anything to do with political debts. Arguments that poker is not gambling are both (a) counterintuitve and (b) extremely problematic on the level of legislative intent. And (b) is hugely important-- it's a huge no-no in judging to adopt some cutesy word-game interpretation of a statute while ignoring whatever it was the legislature was actually setting out to do.

My concerns go far beyond the outcome of this case, and for that matter, beyond any legislation that is being considered at either the federal or state level.

For tax purposes, poker players are treated like gamblers, meaning among other things, that they can only report their net income if they are professional poker players. The consequences are severe for at least two groups of amateur players (players in states that do not permit gambling deductions, players who cannot profitably itemize). Professional players are not immune either (can't deduct net losses, pain in the ass record keeping).

Clearly poker is a game of both skill and luck. But in reality, professional poker has more in common with stock and commodity trading then it does with any other game. I hope to live long enough to see the former treated like the latter for tax purposes.

Part of making this a reality is demonstrating that poker does not meet the traditional model of gambling, and that the current laws of many states, including NY, are themselves so ambiguous and outdated they need to be scrapped altogether.

I think the taxation issues regarding ALL forms of gambling are outrageous. In some states you can't deduct losses; withholding punishes pick 6 players, record keeping requirements are capricious, et cetera.

Unfortunately, there's not much traction on that until we pass a poker bill.

Yeah, the Swedish court case was what got me thinking about the actual fundamental differences between cash games and winner-take-all constant-blind tournaments. And yes indeed, that's definitely true that this would apply to any game such as poker. The implication would be that any game which is "skill in the long run" would not be classified as gambling, i.e. any competitive multiplayer game with any skill or strategy element would not be gambling. The alternative would be sanctioning some games in their "tournament style" but prohibiting participants in those games from getting any settlement or fair payout from having to exit the game early.

And thus the division between "game of chance" and "game of skill" would be very clean, as all multiplayer strategy games must all be games of skill. Regardless of my angle of logic, it's an outcome I can never escape... which is why I'm not actually the one helping out on court cases

^^^ I can't really say I agree with the Swedish court decision.

Regardless of how deep you start, the key hands of tournament poker are played with relatively short stacks, at which point, decisions are relatively more clear cut. I have always considered ring game play to involve more skill than tournament play. If you are down to 20 big blinds in a tournament, you are unlikely to have a difficult decision to make on the turn (because you got all in pre-flop, or at the latest, on the flop), and certainly not on the river.

A child molester or mass murderer can very easily and very quickly walk free from a charge on the slightest technicality that is because the "victim" in is those cases is not the US government. Those who have allegedly victimized the government are only given the illusion of a free trial or due process.

Yeah, it really rubbed me the wrong way, too. I can see where they'd be coming from, but I think most people who actually play poker and appreciate the strategic nuances of stack sizes would disagree that tournaments are more skill than cash games.

I see, your not the only one that finds the apparent facts at odds with the legal (certainly existing) construction and decision methods to partition games. For me the most tilting in these discussions is the ignoring of any time factor or trials when we're clearly in the domain of probability. e.g. single hand analysis.

It's like a fictional story of ignoring the fingerprint expert witness in a burglary where there are footprints on windowsill and ignoring the expert's statement that koala's can make fingerprints just like humans* and it could have been one just as likely as the accused human.

Ye the Swedish Court ruling was strange (to me). IMHO It's mainly due to the deeper the relative stacks (and less ante dead money) the more dependent decisions -> more complexity and hence skill in cash games.

I agree with this. I forget the name but there was an article years ago in the Financial Times about a hedge fund backing lots of poker players as they saw similarities to trading and poker -the company may still exist.

*apparently true

While some may argue that the skill v luck debate is a waste in the legal arguments about whether poker is "gambling", it's really a different question than that which it IS relevant.

The point on whether internet poker is gambling is a valid one imo. While the typical immediate response would be, "of course it is", that premise would be based on the simple notion from any layperson that any challenge with even the slightest hint of chance, meets the test.

However, if you look at IGBA, particularly since it's charged in this case, it specifically says: "gambling" includes but is not limited to pool-selling,bookmaking, maintaining slot machines, roulette wheels or dice
tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein".

While that list is non-exhaustive for sure, there is little correlation to any of those "games" cited, and internet poker. In fact, looking at each of the above, clearly the "person(s)" running such games, has an interest in the outcome, which is not the case for ipoker. While it's true that a rake is generated for each hand or for each tourney, that same rake is consistent no matter who wins the hand/tournament. The "house" in ipoker, therefore doesn't get any additional compensation based on the outcome. This is completely contrary to each of those on that list.

Just as important, in looking at the list mentioned in IGBA as definitions of "gambling", you could argue that there is zero resemblance between anything on that list and poker. If ANY game of cards was included, even Rummy or Go Fish, one might draw some remote correlation that the writers intended card games,(albeit still not via the internet which is a whole different subject), to be considered, but none were. Poker is not a new phenomenon (although it's popularity is, particularly via the internet).

So what did the legislature "intend" with IGBA to begin with? Just as the Wire Act was meant to apply solely to bets on "sporting events or contests" (clarified in the new OLC Opinion), it could be argued that IGBA was meant to apply to "curbing organized crime". Throughout time, it really could be impossible to discern what someone's intent may have been for anything. However, according to the briefs filed by Elie/Campos, intent became a matter of record and was memorialized via the Congressional record, including hearings before the House Subcommittee by the sponsor and supporters of the bill, namely that the bill was aimed at curbing organized crime.

I am not ready to guess yet at what may be the final finding, I'm just saying that it isn't an argument that should be laughed at or shelved without consideration, and that some findings based on the above would be 100% relevant in the considering the whole picture.

P.S. Add my usual disclaimer that IANAL yada yada yada

This is quite false. It is extremely rare that a dangerous criminal walks on a legal violation. There are all sorts of doctrines that prevent this (prejudicial error, inevitable discovery), there is usually a retrial anyway, and judges are very careful about this.

Diamond:

I think the poker boom was one of the main causes of UIGEA's passage. That's the problem with legalistic word parsing arguments about poker not being gambling.

Further, the definition of gambling was broadened as the bill went through drafting, in a manner that decreased the relevance of skill. People who were there say that this was done to ensure poker was covered.

You should assume that any court interpreting UIGEA will conclude that Congress intended to cover poker. And that means to win the argument, you have to show that Congress failed to do what it was trying to do. That's a very difficult argument to make.

IGBA is somewhat less clear cut. But the problem there is that there is years worth of caselaw applying it to poker.

And more generally, i think it's going to be impossible to dissassociate poker with gambling. First of all, it is gambling to the problem gamblers it attracts, which is one of the reasons for the regulations. Second, it is regularly played in casinos with chips. Third, it has traditionally been considered to be gambling.

People have much more liberal attitudes about gambling now anyway. So it's not like if poker is gambling we will never get a poker bill.

WHOA!

Which came first, the chicken or the egg?

Poker is played in the casino ⇒ poker is gambling.
Poker is gambling ⇒ poker must be played in the casinos.

It doesn't really matter.

I'm surprised that more people don't get this point, but the way institutions evolve over the course of history is important to legal reasoning. Obviously, for instance, the stock market has a lot of gambling aspects to it. But no court is going to just blithely apply the gambling statutes to the stock market, even if by their terms they may cover it. The stock market grew up separately from the gaming industry, acquired its own set of customs and regulations, caused its own set of social problems, etc. It would be ridiculous and costly to upturn all of that and try to fit the stock market into an entirely different set of restrictions, regulations, administrative agencies, etc.

In contrast, if the Wynn casino in Las Vegas invents a new game that involves the betting of money using chips and cards or dice tomorrow, it is almost certain to be treated as a gambling game, even if it would be possible to define the game as involving the sale of securities. Because the set of institutions, restrictions, regulations, administrative agencies, etc., that apply to the Wynn casino are set up by the gaming laws.

You need to think beyond the narrow issue of online poker. Imagine if the courts of state X, with numerous casinos and a gaming commission and rules and regulations governing various games including poker, rule that poker actually isn't gambling. What happens then? Does it mean that cardrooms no longer need be licensed or meet financial responsiblity or background check requirements for their employees? Does it mean that winnings are no longer reported to tax authorities consistent with the tax law requirements with respect to gambling? Does it mean that cheaters can no longer be prosecuted, that underage players can no longer be excluded, that people ruled off the grounds can now come back?

The point is, institutions and regulatory customs and history all matter. It may be true that if you parse the words of various gambling statutes, poker doesn't qualify. But statutory interpretation is about more than parsing words. It's about legislative intent. And it's about the justified reliance interests of everyone from law enforcement to cardroom operators to players.

By custom and tradition, society have treated chips-and-cards-and-bets games as a form of gambling and subjected them to extensive regulation. The legislators who passed UIGEA were acting under the assumption that this tradition would continue to hold. Statutory construction arguments that claim that poker isn't actually gambling have a heavy burden to overcome.

Since the things that you list are generally considered desirable, I think the legislators of state X would have to pass the laws and regulations necessary to fulfill them, taking into account that poker is distinct from gambling. This is after all what they are paid to do, NO?

You might want to think about what courts are paid to do. "Engage in legal nitpicking that has the effect of forcing a legislature to re-enact a complex statutory and regulatory scheme" is not a particularly good use of JUDICIAL resources.

IGBA also doesn't mention Black-Jack, which can also be staked peer-to-peer, but nobody would suggest it isn't gambling. Well, maybe nobody is too strong, in Ian Imrich's legality opinion memo for FTP he refrenced a black jack patent case, but that was for peer-to-peer subscription tournaments. The Legality Under US Federal Law of Peer to Peer Virtual Online Poker Cardrooms as Conducted on the Worldwide Internet

As strict as NY law is on live poker, the fact that they allow internet gambling makes it a dream State for PokerStars et al to make their extraterritoriality argument.

This same issue was actually raised last century when the fear was that since most States allowed some forms of in-state lotteries for fund raising, the new technology (postal service) would enable out of State businesses to sell raffles/lotteries/schemes of chance interstate.

Congress recognized that State gambling regulations wouldn't apply since the games could be offered extra-territorially, and for the first time stuck their nose into an area that had always been a State issue, and passed federal lottery law.

So while the argument that poker isn't gambling would likely fall on deaf judicial ears, it might not even be required, since offering gambling over the internet is legally more akin to offering lottery through the mail than it is to setting up a poker room within State borders.

It might not be the defendants needing to show that poker isn't gambling, it might be the government needing to show that poker is a scheme subject to chance (lottery) - but when the scheme subject to chance doesn't reward the business providing the scheme (non-banked), PokerStars et al may win without ever needing to demonstrate the predominance of skill.

Just because Congress could constitutionally pass the Lottery Act (true) doesn't mean states couldn't apply their lottery bans to prohibit their own residents from gambling on other states' lotteries.

Almost all Commerce Clause power is concurrent, unless Congress preempts the state laws (which has not happened here-- Congress expressly authorized the state laws in UIGEA and IGBA).

And more generally, the Internet has not changed the general police power of states to regulate and protect their residents. States can prohibit offshore online poker from doing business for the same reason they can regulate any product or service sold to their residents online unless Congress says otherwise. The same rules that allow states to arrest and extradite anyone using the telephone to defraud state residents permit states to prevent foreign entities from directing online poker at in-state residents.

The future of online poker in America is going to be sites regulated and licensed under US or state law.

I was re-reading Cabazon while writing a long winded reply and discovered that the Supreme court ruled not that State law didn't apply extra-territorially, but that the State didn't have the authority to enforce it extra-territorially.

Not a big difference for the Tribes, but all the difference in the world for my UIGEA argument, since Congress gave itself the authority.

So yeah, State laws (or even regulations) should be sufficient to trigger the UIGEA.

Thanks LD, but indulge me here.
.

lawdude may be nuts but he's absolutely correct, the Wire Act was never used against poker, the one time it was attempted to be applied the court dismissed. The IGBA on the other hand, as the DOJ said in their response:

http://pokerfuse.com/site_media/medi...0-0--31066.pdf

From the DOJ brief:

These 2 statements are at best contradictory and at worst hypocritical.

Skallagrim

IIRC, transactions that would be covered under the Securites Act are explicity excluded in the wording of the UIGEA.

With all due respect, I think that the narrow issue of online poker is exactly what should be considered. It's sufficiently unique in so many ways, not so much by whether it should be considering "gambling", but certainly by the fact that, compared to all other ways that the current statutes are charged, it is not a house-backed game.

Clearly I am playing devil's advocate vs the government here, but I think it's a healthy debate that shouldn't be shelved just because no court was asked to consider such idiosyncrasy before.

Without commenting here on anything from that particular author, I would submit that there is a significant difference between peer-to-peer blackjack, and the customary casino style blackjack, where the players are vs. the "house".