Poker and Lawyers

What is poker? Before you answer, I should clarify my question. I mean, what is poker in the legal sense? When a law is drawn up, there is often a glossary of terms inserted into the law to help us understand what the law means. In both gambling laws and other laws, the way that a word is used in everyday speech may not correlate very well with how a word is used in a particular law. Let’s look at the word “gambling.” My dictionary gives the following as a main definition: “To risk money or anything of value on the outcome of something involving chance.” I would accept that definition. Now, let’s look at some definitions used in state laws.

New York: 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.

This is from the state that has Wall Street in its largest city. Of course, people on Wall Street don’t gamble when they buy and sell millions of dollars worth of stocks each weekday. Stocks might be considered tangible assets by some, but the derivatives market does not seem to me to be much different than betting the over or under of a basketball or football game. It looks a lot like gambling — unless Goldman Sachs does it.

Most states recognize that Wall Street does gamble, and see the need of throwing in a law to say that this type of activity is not gambling, so it is legal. (If a state law says that the color green shall be treated as blue in its law, then green is blue.)

Typical is this Alaskan law: “Gambling” does not include (A) bona fide business transactions valid under the law of contracts for the purchase or sale at a future date of securities or commodities and agreements to compensate for loss caused by the happening of chance, including contracts of indemnity or guaranty and life, health, or accident insurance.

Not every state mimics the New York definition of gambling. Look at the Louisiana definition:

(a) Gambling is the intentional conducting, or directly assisting in the conducting, as a business, of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit.

As you see, in Louisiana, if you are not operating as a business, it is not gambling! Translation: Home games are OK if you do not rake the pot or derive money from charging to host the game. Of course, someone like me is not going to object to the Louisiana definition of gambling (although the definition is not intuitive, but contrived). At least social gambling is legal there.

A common debate in both social gatherings and courts of law is whether poker is a game of chance or a game of skill. There are two ways that this factor might come into play, depending on whether the “material degree” or “dominant factor” test is applied. Here is an example from Missouri law of the “material degree” test:

“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 the skill of the contestants may also be a factor therein.

The “dominant factor” test appears mostly in case law, and defines a game of chance as one in which chance predominates, and a game of skill as one in which skill predominates. So, in poker, which one predominates? Any knowledgeable poker player will tell you that in the short run, chance predominates, and in the long run, skill predominates. My opinion is that a good lawyer should be able to win either side of the argument — and pocket a lot of money. There have been quite a few court decisions favoring one side or the other.

We have seen that state laws on gambling can change the ordinary meaning of words and language to whatever they want. There is one definition that some states use that I take issue with, and believe does serious harm to poker. It is their use of the term “casino gambling game.” The state of Connecticut is a prime example, with this definition in its laws: “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 blackjack, poker, craps, roulette or a slot machine.”

Let’s talk about “casino gambling games.”

Sometimes, the shortened term “casino game” is used. Here is an Oregon law:

“Casino game” means any of the traditional gambling-based games commonly known as dice, faro, monte, roulette, fan-tan, twenty-one, blackjack, Texas hold’em, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck, Chinese chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panquinqui, red dog, acey-deucey, or any other gambling-based game similar in form or content.

Here, we have both poker and Texas hold’em mentioned — and look at all of the other games poker has been lumped together with. They all are games in which the casino is the adversary of the players!

Let me give you all of the reasons that poker, despite being played in a lot of casinos, is not a “casino gambling game,” and should be differentiated under the law from other games that are played in casinos:

1. There is a big skill element in poker, as evidenced by the large number of books written about how to play it better. Part of the pleasure of playing poker comes from gambling for money, but the exercise of skill is also enjoyable.

2. Poker is played in many places besides casinos; the other games mentioned are not. This is because poker is a very social game, as well as a gambling game.

3. The most important factor in determining the character of poker is the fact that the casino is not the opponent of the players, but is simply hosting the game. As the host, its interest is in providing a safe and fair game in which the rules are observed. As an adversary …

Regular readers probably know that I am skilled in a number of other games, such as chess, bridge, and backgammon. All of these games have a stronger resemblance to poker than does any casino gambling game like blackjack, craps, or roulette. Yes, that even applies to chess, despite the fact that chess is considered a game of pure skill. Our state laws should recognize this resemblance instead of treating poker purely like a gambling game. You can guess how little knowledge of poker the legislators must have had to write such nonsense as is seen in some of these state laws.

Bob Ciaffone has authored four poker books, Middle Limit Holdem Poker, Pot-limit and No-limit Poker, Improve Your Poker, and Omaha Poker. All can be ordered (autographed to you) from Bob by e-mail: [email protected]. Free U.S. shipping to Card Player readers. Ciaffone is available for poker lessons at a reasonable rate. His website is www.pokercoach.us, where you can get his rulebook, Robert’s Rules of Poker, for free. Bob also has a website called www.fairlawsonpoker.org.