Poker: A Game of Skill or a Game of Chance?

By   /   April 15, 2013 

 

Poker: A Game of Skill or a Game of Chance?

United States District Court
Eastern District of New York

United States v. Dicristina1

 (decided August 21, 2012)

Tiffany Frigenti

 

On August 21, 2012, in the United States District Court for the Eastern District of New York, Judge Jack Weinstein ruled that poker is a game of skill that is not covered under the federal Illegal Gambling Business Act (“IGBA”).2  Issuing a 120-page decision, Judge Weinstein reversed the jury conviction of Lawrence Dicristina (“Defendant”), finding that Congress did not clearly intend to criminalize poker when it passed the IGBA.3  Although federal courts have commonly characterized poker as a game of gambling, up until his decision no court had “ruled directly on whether poker constitutes gambling” under the IGBA.4

Defendant was indicted for “operating an illegal gambling business involving poker games in violation of the IGBA (Count 2) and conspiring to do so (Count 1).”5  Defendant moved to dismiss his indictment contending that poker “does not fall under the definition of an illegal gambling business proscribed by the federal statute because poker is predominantly a game of skill rather than chance.”6  However, after the court issued an order that the question of whether poker constituted gambling under the IGBA would be decided as a matter of law, the case proceeded to trial and the jury was instructed that poker did in fact constitute gambling under the IGBA.7  Ultimately, defendant was convicted on both counts.8  Thereafter, Defendant “renewed his motion for a judgment of acquittal,”9 thereby resurfacing the golden question—does a business in New York State involving illegal poker games violate the federal IGBA?

Answering in the negative, defendant presented two arguments.  First, he argued, “even if poker is ‘gambling’ under New York law, not all violations of state gambling laws constitute ‘gambling’ prosecutable under the IGBA.”10  Second, Defendant maintained that his gambling business did not fit the narrow definition of the type of gambling enterprise envisioned by the IGBA, which must involve games, such as those enumerated, that are “both house-banked and predominated by chance.”11  Disputing Defendant’s arguments, the government contended that based on the goals of the federal statute—to prompt states to join the initiative of eradicating organized crime by cutting off revenues attained through illegal gambling—any gabling activity found illegal under state law automatically constitutes gambling under the IGBA.12

Considering both parties’ interpretations of the IGBA to be “plausible,”13 Judge Weinstein noted the ambiguity of the IGBA stating, “It is unclear from the text and legislative history of the IGBA whether every state gambling offense would permit a federal conviction . . . [or whether] in enacting the statute, Congress foresaw that poker business would be prosecutable under it.”14  The decision entails a rendition of the history of poker in the United States, and a detailed explanation of “No-Limit Texas Hold’em” and provides a summation of the expert testimony offered.15  On behalf of Defendant, game theory expert Dr. Randal D. Heeb offered testimony stressing the “number of skilled strategic choices, such as how much to wager, made by poker payers . . . ,”16 and concluded “that skill predominated over chance in determining the outcome of a poker game.”17

In an effort to resolve the ambiguities of the IGBA the court proceeded to conduct a formal statutory construction analyzing the statutory language, applicable definitions of gambling, and pertinent legislative history.  However, neither “[t]he text, structure, [nor] history of the IGBA”  helped to settle the dispute over statutory interpretation.18  Concerning congressional intent, the court stated, “Poker is, for the purposes of this case, an elephant or perhaps an eight hundred pound gorilla—that Congress would have been unlikely to ignore.19  In other words, Congress may have deliberately omitted “card games like poker, picochle, gin rummy, and bridge” from the statute due to the popularity of such games amongst regular “law-abiding citizens in noncriminal settings” at the time of the IGBA’s enactment.20

Left in a tenacious sea of ambiguity, Judge Weinstein applied the rule of lenity, which mandates that “ ‘ambiguous criminal laws be interpreted in favor of the defendants subjected to them.’ ”21  Accordingly, the court adopted the “defendant’s narrower, more persuasive construction,” requiring that poker “fall under the general definition of gambling and be sufficiently similar to those games listed in the statute to fall within its prohibition.”22

In the final pages of the decision Judge Weinstein reaffirmed the lack of controlling federal precedent,23 and asserted that, contrary to the government’s argument, chance is the relevant criterion limiting the IGBA’s definition of gambling because “[t]he influence of skill on the outcome of poker games is far greater than that on the outcomes of the games enumerated in the IGBA’s illustrations of gambling.”24  Thus, integral to Judge Weinstein’s decision was that Texas Hold’em, “[t]he type of poker alleged and proved to have been played in defendant’s establishment,” is a game of skill that is not merely dictated by chance.25  Ultimately embracing Defendant’s position, the court concluded that “[b]ecause the poker played on defendant’s premises is not predominantly a game of chance, it is not gambling as defined by the IGBA.”26

Nevertheless, as illuminated in Judge Weinstein’s opinion, the courts’ interpretation of the IGBA, which excludes poker games of the type operated by Defendant, does not leave the federal law enforcement without recourse, as Mob controlled games may still face federal prosecution under Racketeer Influenced and Corrupt Organizations Act (“RICO”).27  Moreover, the decision does not “encroach on any states’ ability to proscribe these card games,” as each is free to define poker as it chooses, and many already have.28  New York State’s gambling laws, for example, unambiguously permit prosecution in state court for the type of gambling business engaged in by Defendant.29  Skill or no skill, Defendant could still face a state or local prosecution where his odds do not appear as promising.  Thus, if prosecuted in a state or local court, the inevitable reality is—Defendant’s poker is a game of skill argument won’t stand a “chance.”


 

 

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Footnotes:

  1. No. 11-CR-414, 2012 WL 3573895, at *61 (E.D.N.Y. Aug. 21, 2012).
  2. 18 U.S.C. § 1995 (2011); Dicristina, 2012 WL 3573895, at *61.
  3. Id. at *61 (“Neither the text of the IGBA nor its legislative history demonstrate that Congress designed the statute to cover all state gambling offenses.  Nor does the definition of “gambling” include games, such as poker, which are predominated by skill.”).
  4. Id. at *51.
  5. Id. at *3.
  6. Id. at *1.
  7. Id.  The court reserved its decision on Defendant’s motion to dismiss the indictment.  Dicristina, 2012 WL 3573895, at *1.
  8. Id.
  9. Id. at *1.
  10. Id. at *2 (“The federal statute defines gambling include[ing] but . . . .  not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling changes therein.”) (quoting 18 U.S.C. § 1955(b)(2); see N.Y. Penal Law § 225.00(2) (McKinney 2011) (“ ‘Gambling.’  A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.”); N.Y. Penal Law § 225.00(1) (McKinney 2011) (“ ‘Contest of chance’ means any contest, game, gaming scheme or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”); In Re Plato’s Cave Corp. v. State Liquor Auth., 496 N.Y.S.2d 436, 438 (1st Dep’t 1985), aff’d, 498 N.E.2d 420 (N.Y. 1986) (holding that a Joker Poker video game fell under § 225.00’s definition of gambling in the partial reliance on its similarity to poker; “[a]lthough there is a degree of skill and concentration involved in playing poker, ‘the outcome depends in a material degree upon an element of chance,’ i.e., the draw of the cards”); see also Dalton v. Pataki, 780 N.Y.S.2d 47, 64 n.5 (3d Dep’t 2004) (noting that “the term ‘game of chance’ or ‘contest of chance’ . . . has been interpreted to include such games as ‘stud’ poker”), aff’d, 498 N.E.2d 420 (N.Y. 1986); People v. Turner, 629 N.Y.S.2d 661, 662 (Crim. Ct. 1995) (“Games of chance range from those that require no skill, such as a lottery . . . , to those such as poker or blackjack which require considerable skill in calculating the probability of drawing particular cards.  Nonetheless, the latter are as much games of chance as the former, since the outcome depends to a material degree upon the random distribution of cards . . . The skill of the player may increase the odds in the player’s favor, but cannot determine the outcome regardless of the degree of skill employed.”); People v. Dubinsky, 31 N.Y.S.2d 234, 237 (Ct. Spec. Sess. 1941) (“There is no doubt that playing ‘Zstud’ poker for money is a game of chance and constitutes gambling.”); id. at 238 (“[T]he courts of many states including our own seem to be unanimous in their holding that where a host receives some consideration or some payment for permitting a card game to be played or other gaming to take place in his premises, that constitutes gambling.”). cf. Katz’s Delicatessen, Inc. v. O’Connell, 97 N.E.2d 906, 907 (N.Y. 1951) (holding that “a social game of poker played in a basement room” of a liquor store violated a law which provided that “[n]o person licensed to sell alcoholic beverages shall suffer or permit any gambling on the licensed premises, or suffer or permit such premises to become disorderly”).
  11. Dicristina, 2012 WL 3573895, at *2.
  12. Id.
  13. Id.
  14. Id.
  15. Id. at *4-*19.
  16. Dicristina, 2012 WL 3573895, at *6; see id. at *8 (“Dr. Heeb opined that poker differs from other forms of gambling, such as sports better, because the player can rely on sophisticated skills to change the outcome of the game.”).  Furthermore, Dr. Heeb contended that “[t]he fact that the winning players tend to win consistently and the losing players tend to lose consistently demonstrates that there is a skill differential between those groups.”  Id. at *9.
  17. Id. at *10.
  18. Id. at *50, *53 (“The text of the statute does not provide sufficient guidance to decide the meaning of ‘gambling.’ ”); see Dicristina, 2012 WL 3573895, at *53 (“Dictionary definitions of gambling vary; some, but not all, require that the wager be placed on a game of chance or an uncertain outcome.”); Id. (“The legislative history is inconclusive.”); Id. at *54 (“Neither poker nor any other game of skill is explicitly included under the purview of other federal laws criminalizing gambling.”).
  19. Id. at *51.
  20. Id.
  21. Dicristina, 2012 WL 3573895, at *25 (“This venerable rule not only vindicates the fundamental principle that no citizen should be held accountable for a violation of a statute whose commands are uncertain, or subjected to punishment that is not clearly prescribed.  It also places the weight of inertia upon the party that can best induct Congress to speak more clearly and keeps courts from making criminal law in Congress’s stead.”) (quoting United States v. Santos, 553 U.S. 507, 514 (2008)).
  22. Id. at *50, *51.
  23. See id. at *52 (“The Court of Appeals for the Second Circuit has not passed on the issue.  While it had upheld a conviction for running an illegal gambling business involving Joker Poker on the basis that the variant was a game of chance . . . Joker Poker involves significantly les skill than the live Texas Hold’em games operated by the defendant in the instant case.”).
  24. The court stated:

    While a gambler with an encyclopedic knowledge of sports may perform better than others when wagering on the outcome of sporting events, unlike in poker, his skill does not influence game play.  A sports bettor is better able to pick winning team, but cannot make them win.  In poker, by contrast, increased proficiency boosts a player’s chance of winning and affects the outcome of individual hands as well as a series of hands.  Expert poker players draw on an array of talents, including facility with numbers, knowledge of human psychology, and powers of observation and deception.  Players can use these skills to win even if chance has not dealt them the better hand.  And as the defendant’s evidence demonstrates, these abilities permit the best poker players to prevail over the less-skilled players over a series of hands.

    Id. at *55.

  25. Id. at *1.
  26. Dicristina, 2012 WL 3573895, at *61.
  27. Id. at *2.
  28. Id.; see id. at *55 (noting that multiple state gaming laws explicitly include poker in their definition of gambling or define it as a game of chance); see, e.g., Wis. Const. art IV, § 24(6)(c) (prohibiting the legislature from authorizing particular games as a state-run lottery, including poker); Idaho Const. art III, § 20(2) (prohibiting casino gambling, including poker); Ark. Code Ann. § 5–66–112 (West 2019) (prohibiting betting money or something of value on card games, including “poker”); Conn. Gen Stat. Ann. § 53–278a(2) (West 2013) (“ ‘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, including the playing of a casino gambling game such as . . . poker.”); Ohio Rev. Code Ann. § 2915.01 (West 2012) (“ ‘Game of chance’ means poker, craps, roulette, or other game in which a player gives anything of value in the hope of gain, the outcome of which is determined largely by chance, but does not include bingo.”); Idaho Code Ann. § 18–3801 (West 2013) (defining gambling as including poker and excluding “[b]ona fide contests of skill, speed, strength or endurance in which awards are made only to entrants or the owners of entrants”); Iowa Code Ann. § 99B.11 (West 2013) (“A poker, blackjack, craps, keno, or roulette contest, league, or tournament shall not be considered a bona fide contest” of skill exempt from gambling license requirements; “[c]ribbage, bridge, chess, checkers, dominoes, pinochle and similar contests, leagues or tournaments” are exempted.); Okla. Stat. Ann. tit. 21 § 941 (West 2012) (“Except as provided in the Oklahoma Charity Games Act, every person who opens, or causes to be opened, or who conducts, whether for hire or not, or carries on … poker … for money, checks, credits, or any representatives of value, or who either as owner or employee, whether for hire or not, deals for those engaged in any such game, shall be guilty of” opening, conducting or carrying on gambling game.); Tenn. Code Ann. § 39–17–501 (West 2012) (“The definition of ‘gambling’ includes . . . poker.”); cf. Cal. Penal Code § 337j(e) (West 2009) (including poker in the definition of a controlled game which is unlawful to operate without a license except when played “in private homes or residences, in which no person makes money for operating the game, except as a player”).  Others implicitly include poker in their definition of gambling. See Fla. Stat. Ann. §§ 849.08–849.085(2)(a) (West 2013) (prohibiting “any game at cards, keno, roulette, faro or other game of chance, at any place, by any device whatever, for money or other thing of value” but stating that gambling on poker is not a crime when played for “penny ante”); id. § 849.086(1) (authorizing poker games at racetracks if those games are played in compliance with Florida law); Mich. Comp. Laws Ann. § 750.314 (West 2013) (making it unlawful for any person “by playing at cards . . . or by betting or putting up money on cards . . . [to] win or obtain any sum of money or any goods”).
  29. See supra note 10; Dicristina, 2012 WL 3573895, at *1 (“New York courts have long considered that poker contains a sufficient element of chance to constitute gambling under that state’s laws.”).