Contracts and Poker: Reliance

A player grabs a fistful of chips, extends them at arm’s length over the felt, and then pulls them back. Has the player made a bet?

Reliance plays an important part in contract law – some would argue the most important part. We distinguish those promises that are enforceable (“I’ll sell you my house if you give me $300,000”) from those that are not (“I’ll give you a million dollars”) based on which ones are reasonable to rely on. If I breach a contract you made with me, you recover because you were relying on me to perform. Often this reliance is hypothetical, and recovery is allowed even if there was no actual reliance. (I sign a contract for you to build me a swimming pool and two seconds later I tell you I don’t want it. I still have to pay you damages.) In some cases, a promise may be enforceable if it is relied on even if there is no contract. (Rich uncle tells you, “I am so happy to hear that you have given up poker for law school that I am going to pay your tuition.” If you relied on that promise by declining a scholarship, you may be able to recover.)

Reliance forms the basis for a number of the rules of tournament poker as well. The rule forbidding string bets, for example, is often justified because the bettor can gain information from his false move. Another explanation is that the other players should be able to rely on the bettor’s first move or first verbal utterance. Even if no other player noticed the move, it should still be a rule violation because of the hypothetical reliance.

This concept explains our struggle to determine what constitutes a nonverbal bet. During the WSOP broadcast you will hear Norman Chad authoritatively inquiring whether there was “forward motion” with chips, even employing slow-motion replay to dissect the action. But neither the WSOP rules nor the TDA rules speak of “forward motion” with chips – they both say that a player bets by “pushing out” chips. Is there a difference between the two terms? Literally interpreted, pushing out seems limited to bets that stay in contact with the felt, but many players toss in their chips or drop them. The player who holds chips over the table has not pushed out chips, but has led us to believe that a bet has been made and may cause us to react. If the purpose of the rule is to determine when we can rely on a bet, then that motion should be found to be a bet.

The rule can make it hard to distinguish between assembling the chips for a bet and actually making the bet. Assembling the chips usually involves forward motion, and may involve some pushing out. The question is one of degree. I have heard players assert that a player who placed chips in front of his cards has engaged in forward motion, though how that came to be the determining point I have no idea. That view has some appeal because it supplies an objective standard, and we long for a clear test when making these distinctions. The most objective standard is a “betting line” around the table with a bet being made only when chips pass across it. In many poker rooms, there is a line around the table but when you inquire, you find it is not a betting line but a “convenience line,” presumably to encourage players to move their chips within reach of the dealer. If there is a convenience line rather than a betting line, chips that are pushed forward but do not cross the line might be considered bets, so the prudent player will want to know the meaning of the line.

The distinction between the actions that count and those that don’t can also apply to folds. I once saw a player who was concerned that the next player to act was going to bet, but he wasn’t sure, so he hesitated when throwing his hand away. In fact, he performed the poker equivalent of baseball’s balk – he held the cards by the corner and appeared to flick them toward the center of the table, but he held on and did not release them. Just as the baseball balk induces a baserunner to advance, this motion induced the next player to fold, thinking the other player had folded. The balking player then bet. Should his action have been ruled a fold? Rule 63 refers to a proper fold as cards “pushed forward,” so this might not be a fold according to the rules, but because his action was calculated to induce reliance, I would rule it a fold.

Here’s a distinguishing play. I am reluctant to tell this story on myself, but proud to say it hasn’t happened again – as the saying goes, I was only fooled once. Anyway, I once hesitated about whether to make a bet on the button and the player in the small blind got ready to flick his cards away. Emboldened by his gesture, I made the bet and he of course raised. Did I rely on his gesture? Absolutely. If I were the tournament director, would I rule that he had folded? Absolutely not, because in that case it was not reasonable for me to rely. It was not his turn to act and I should ignore whatever signals he put out about his intended action until it was his turn to act. But in the first example, it was the balking player’s turn to act, so it was reasonable for the next player to rely on his action before acting himself.

I don’t have a good answer to the problem of determining when a bet or fold is made. But I do suggest that we would come closer to enforcing the intent of the rule if, instead of inquiring whether there was “forward motion” with chips, we inquired whether a hypothetical observant player would have reasonably relied on the action. ♠

Scott J. Burnham is the retired Curley Professor of Commercial Law at Gonzaga Law School in Spokane, Washington. He can be contacted at [email protected]. This column is adapted from his article, A Transactional Lawyer Looks at the Rules of Tournament Poker, which was published in Gaming Law Review and Economics.