Inside Straight -- News

Setback in Colorado: Judge ‘Disapproves’ Poker Ruling
Defendant Will File an Appeal to the Colorado Supreme Court
By Stephen A. Murphy

It was hailed as a monumental victory for poker. A jury had ruled that poker is a game of skill, and a man was exonerated as a result of the decision. Now, just over a year after this tumultuous story began, an appellate judge has disapproved of a trial judge’s decision that allowed expert testimony in support of poker being identified as a game of skill.

“I was shocked when I found out the district attorney was even going to appeal it in the first place, and then I was even more shocked at the judge’s ruling,” said Kevin Raley, a Colorado engineer who was found not guilty of “illegal gambling” after his bar poker league was raided by local law enforcement in August 2008. “It just amazes me that we’ve gotten to this point, that the D.A. feels that there’s value to the people of Colorado for this much of his time and attention.”

In January, a five-person jury found Raley not guilty of illegal gambling, a petty offense punishable by a maximum fine of $100. However, immediately following the ruling, the district attorney appealed the trial judge’s decision to allow Raley’s attorney to defend him with expert testimony that poker is a game of skill.

In August, Chief Judge James Hartmann announced that he agreed with the district attorney, disapproving the trial judge’s decision to allow the expert testimony, and stating, “The activity was gambling … and the activity was not a bona fide contest of skill.”

Raley has filed an appeal to the Colorado Supreme Court.

Why the Decision Was Disapproved
In his eight-page decision, Hartmann cited 1989 case law that identified poker as gambling, even as it acknowledged that “while poker … might involve some skill, these games certainly are contingent ‘in part’ upon chance, and when, as here, the games involve risking a thing of value for gain, they constitute a form of gambling.”

As a result of that case, Hartmann argued that the trial judge should have “excluded the testimony of Dr. Hannum as being irrelevant.”

Todd Taylor, Raley’s attorney, says that Hartmann misinterpreted the law.

“It appears to me that the district court judge misunderstood the nature of law in the state of Colorado,” said Taylor. “He found that because poker is based in part on chance, then it’s gambling. If that’s the case, there are all sorts of games that would be considered gambling, like sitting down to play Monopoly.”

Colorado law identifies “gambling” as “risking any money … for gain contingent in whole or in part upon lot, chance … over which the person taking the risk has no control.” It specifically excludes, amongst other things, “bona fide contests of skill.”

Raley believes that public knowledge concerning poker has increased so much in the past decade that a 1989 mentality of the game — whereby the judge acknowledged that the game may contain “some” skill but did not identify it as a “bona fide contest of skill” — does not hold up today.

The Effects of This Ruling
While Hartmann’s ruling will not affect Raley personally, since he was already found not guilty and cannot be retried, it does influence how judges will conduct future illegal gambling trials in the state.

“From the beginning, this case has been about more than just me and my friends,” said Raley. “This is about all poker players.”

However, Raley has a rough road ahead of him if he hopes to overturn the most recent ruling. According to Taylor, the Colorado Supreme Court hears only about 85 of the 1,200 cases it is petitioned for each year. In other words, their chances of getting a crack at the highest court in the state are pretty much similar to hitting a three-outer on the river — possible, but hardly probable.

Yet, Taylor believes that this is exactly the kind of case the court would want to hear.

“I think that this case has more potential than most cases, because you have a conflict in ruling between the district court and the appellate court; it is an issue of statewide concern; and the Colorado Supreme Court has not issued a ruling on a case concerning the gambling statute since probably the ’80s or ’90s,” said Taylor. “It’s been a number of years since the Colorado Supreme Court has weighed in on this issue, and they may feel like this is the time to do so.”

There is no firm timeline on when the Colorado Supreme Court has to let Raley know if it will hear his case. According to Taylor, the Court usually makes its decision whether or not it will accept a case anywhere from six weeks to six months after an appeal is filed.

PartyGaming Outbids Gamynia for World Poker Tour Assets
WPTE Tentatively Accepts PartyGaming’s $12.3 Million Offer
By Stephen A. Murphy

World Poker Tour Enterprises (WPTE) announced on Aug. 24 that it has tentatively agreed to sell nearly all of its substantial assets — other than cash, investments, and certain other assets — to Peerless Media, a subsidiary of PartyGaming.

Peerless Media will pay WPTE $12.3 million in the deal, as well as 5 percent of the company’s future gaming revenues — a total equal to at least an aggregate of $3 million in the three years following the close of the deal.

Earlier in August, WPTE had agreed to sell its assets to Gamynia Limited for nearly $9.1 million and 4 percent of its future gaming revenues, pending stockholder approval. With a better offer coming in from Peerless Media, WPTE will pay a $1 million termination fee to Gamynia to opt out of its earlier agreement.

WPTE President and CEO Steve Lipscomb hailed the new deal as an important move for the World Poker Tour brand.

“PartyGaming has been an important partner for a number of years, and we are confident that they will be an excellent manager of our brands in the future,” said Lipscomb.

The popular online gaming site had sponsored international broadcasts of the World Poker Tour in seasons 4, 5, and 6.

Just like the Gamynia agreement, however, this deal is not set in stone. Either side can opt out of the deal if it has not been closed by Feb. 24, 2010. The deal also must be approved by WPTE stockholders.

PartyGaming runs PartyPoker, which used to be the largest online poker site in the world before it left the U.S. market after Congress passed the Unlawful Internet Gambling Enforcement Act. Even without American customers, PartyPoker remains the fourth-largest poker network today — behind PokerStars, Full Tilt, and the iPoker network.

PartyGaming has been positioning itself for a possible return to the U.S. market if the UIGEA is overturned.

The company agreed to pay $105 million in fines to the U.S. Attorney’s Office of the Southern District of New York in a non-prosecution agreement in April of this year “for providing internet gambling services to customers in the U.S. prior to the enactment of the Unlawful Internet Gambling Enforcement Act (‘UIGEA’) on 13 October 2006.”

With a well-known live-poker tour under its command should the deal be finalized — something both sides expect to have completed by the fourth quarter of 2009 — PartyGaming will certainly pay close attention to whether Rep. Barney Frank’s poker bills or Sen. Robert Menendez’s proposed poker legislation materialize into law, which could allow it to re-enter the U.S. market.

PokerStars Unveils New Poker Show on FOX
Series Announced Weeks After Full Tilt’s New Series Debuted
By Stephen A. Murphy

Oh, you’ve got a brand-new heads-up poker show on a major network? Touché.

Just weeks after Full Tilt Poker launched its new poker series Face the Ace, which was met with mixed reviews and poor ratings, PokerStars announced in August that it would air its own new poker series, PokerStars Million Dollar Challenge.

PokerStars hasn’t released the specific details regarding the structure of its events, but similar to Full Tilt’s show, it will feature online qualifiers who take on the site’s established pros, with $1 million potentially up for grabs.

In PokerStars Million Dollar Challenge, the qualifier can accept coaching from Team PokerStars pro Daniel Negreanu as he or she faces off against players like Chris Moneymaker, Joe Hachem, and Greg Raymer. If the qualifier makes it through to the final event, the student will attempt to defeat the teacher, as Negreanu himself will be the final obstacle between the player and the million dollars.

The show is tentatively scheduled to air at 4 p.m. on Sunday, Oct. 11, on FOX, but that could change, depending on FOX’s regional NFL coverage. Filming will begin on Sept. 30.

To be considered for the show, players must finish in the top 10 of a PokerStars freeroll for the series, which will run every day until Nov. 25 at 8 p.m. and 11 p.m. Then, they must submit a two-minute video explaining why they should be selected for poker’s newest show.

The mandated audition tape differentiates PokerStars’ new show from Full Tilt’s, as well as Stars’ requirement of bringing two friends to the filming to add what appears to be an almost Deal or No Deal support system for the contestant.

Face the Ace premiered in prime time on NBC on Saturday, Aug. 1, but was relegated to an afternoon time slot after two weeks.