Contracts and Poker: The Social Contract

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In this column I have often discussed the terms of the contract that is formed informally with the poker room or casino when you enter a tournament. Sometimes the contract may be more formal, as when you enter a tournament sponsored by the WPT or WSOP, or when you play online, and you have to agree to a multitude of terms and conditions.

But it can also be helpful to think of your relationship with the other players at the table or in the tournament as if you had a contract with them. Players sometimes say there is no rule to cover a particular situation, but this is not so. There is always a rule to cover a situation, even if it can’t be found in print in the Rules of the Tournament Directors Association (TDA) or the WSOP.

For example, a number of years ago there was a fellow playing at the WSOP main event who thought it would make him luckier if he did not bathe for the duration of the tournament. Unfortunately for those seated near him, he made a deep run.

Finally, after complaints to the floor, he was led away, screaming, “Show me where in the rules it says you have to take a shower!” In fact, the WSOP later adopted such a rule, but even without an express rule on point, the WSOP Rules state that “Rio will penalize any act that, in the sole and absolute discretion of Rio, is inconsistent with the official rules or best interests of the Tournament.” Similarly, TDA Rule 1 permits the floor to make decisions in “the best interest of the game and fairness”:

Floor Decisions. The best interest of the game and fairness are top priorities in decision-making. Unusual circumstances occasionally dictate that common-sense decisions in the interest of fairness take priority over technical rules.

Contract law can help us discover what is in “the best interest of the game.”

When we agree to a contract, we give up some of our autonomy for the benefit of those in the contract with us. This idea goes way back, probably further than Rousseau’s Social Contract of 1762, but you can find it there if you want to look.

But the good news is that a contract is a win-win situation for the parties who agree to it. We enter into it voluntarily because, as the economists would put it, we are getting something that has more utility for us than what we are giving up. Those in the contract are looking out for their own interests, but they have to respect the interests of the other party to the contract as well.

For example, there is a book by Tracy Kidder called House about a wealthy man who hired a couple of local craftsmen to build a house. He was very tough during negotiations and extracted a number of concessions for his benefit. But while performing the contract, the builders often had a number of decision points where they could either do a first-class job or one that was “good enough.” Holding a grudge because of their treatment during negotiations, they often chose the latter.

One principle that guides our behavior in a contract is “custom and usage.” In contract law, the custom and usage that supplements the terms of a contract often comes from a trade or business. For example, if you agreed to purchase 100,000 bushels of wheat and received only 98,000, you would know better than to scream breach of contract at the seller, because in that trade, amounts are not exact, but can vary by up to 5%. And even if you don’t actually know it, you are still bound by the usage because you should know it. Similarly, in poker, in addition to the written rules, such as TDA Rules and House Rules, there are other rules that everyone who plays the game ought to know.

Another guiding principle is to act in “good faith.” In contract law, good faith means being honest and reasonable. These principles should keep the “angle-shooter” in check. A player who habitually lies about where the button is supposed to be, or how many chips he has when asked, is probably not breaking any rules, but is not acting in good faith and should not be welcome at the table.

In addition to being honest, a player should be reasonable. The other day I was watching the U.S. Poker Open. A player coughed into his elbow, and was complimented by the announcers, but moments later the same player coughed loudly into his hand and proceeded to handle the cards and chips as if nothing had happened. The announcers were aghast, though as far as I could see, his fellow players remained silent. Though not specifically against any rules, certainly it is not reasonable to spread germs in this manner, even if there were not a pandemic.

Contracts also have a mechanism for resolving disputes. As a last resort, it might mean going to court, but few disputes end up there. Most of them are worked out by the parties, and contract law encourages the parties to talk to each other to try to work things out. If that doesn’t work, informal procedures like mediation and arbitration might resolve it. Similarly, the players at a table can apply peer pressure to try to control a player who is out of line. If that doesn’t work, the dispute can be taken to the dealer or ultimately resolved by the floor.

So, in summary, when you are playing at the table, feel free to try to maximize your return by beating the pants off the other players. But also remember that we are all in this together. If you think of yourself as having a contract with the other players and do your best to be honest and reasonable while performing that contract, you will find that everyone benefits. ♠

Scott J. Burnham is Professor Emeritus at Gonzaga University School of Law in Spokane, Washington. He can be reached at [email protected].