Poker is a game of skill that is not covered under the federal Illegal Gambling Business Act, Eastern District Judge Jack Weinstein ruled yesterday.
Weinstein (See Profile) reversed the jury conviction of Lawrence Dicristina and found that, as a matter of law, Congress did not clearly intend to criminalize poker when it passed the act. Part of the judge’s reasoning was that poker games, in this case Texas Hold’em, are not purely games of chance.
“Bluffing, raising and folding require honed skills to maximize the value of the cards dealt by Lady Luck,” Weinstein said in United States v. Dicristina, 11-CR-414.
In a 120-page decision, Weinstein noted that New York courts have long considered that poker contains a sufficient element of chance to constitute gambling under state laws, N.Y. Penal Law §225.00(2). But the federal law is ambiguous as to whether it federalizes state gambling offenses, he said.
“It is unclear from the text and legislative history of the Illegal Gambling Business Act, whether every state gambling offense would permit a federal conviction,” Weinstein said. “It is equally uncertain whether, in enacting the statute, Congress foresaw that poker businesses would be prosecutable under it.”
Therefore, the judge said he was applying the rule of lenity, which holds that ambiguous criminal laws are to be interpreted in favor of the defendant subjected to them.
Weinstein rejected the interpretation of the government that the federal act’s definition of gambling should be as inclusive as possible because the law was intended as a weapon against organized crime, for which illegal gambling is a principle source of revenue.
Dicristina and two others allegedly ran a poker game out of a New York warehouse on Mondays and Thursdays. Players were given free food and drink by waitresses and a 5 percent “rake” for the house was collected by the dealers from each pot. Other than the games, the judge said, there was no allegation of other illegality or any connection with organized crime.
Weinstein held a pretrial hearing on Dicristina’s motion to dismiss, but delayed judgment on the motion until after the jury verdict in July. Dicristina was convicted of two counts of violating the gambling act, 18 U.S.C. §1955.
The Illegal Gambling Business Act criminalizes the running of an “illegal gambling business” defined as one that “(i) is a violation of the law of a State…in which it is conducted; (ii) involves five or more persons who conduct, finance, manage, supervise, direct or own all or part of such business; and (iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.”
The statute states “‘gambling’ includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.”
In his decision, Weinstein cited testimony from the defendants’ expert on game theory at a pretrial hearing in July, Randal Heeb, an economist, statistician and a player in national poker tournaments.
“Whether or not to bet, whether or not to raise, which is going to bet zero, let the other person bet and raise after the fact, these are all strategic elements which are the essence of poker, and in that sense there’s nothing analogous to that in a game of chance like betting on a football game or betting on a roll of the dice,” said Heeb, who also testified on how the top poker players in the country win consistently.
Heeb, the judge said, “acknowledged that poker falls in between chess, which he characterized as an almost pure game of skill, and roulette, which he characterized as a pure game of chance.”
At a post-trial hearing, the government offered as its expert econometrician David DeRosa, who challenged Heeb’s analysis on the top players winning consistently.
So many players lose money, DeRosa told the court, that “if a player were to make a profit at any given session in a game where he faced a negative expected rate of return, such profit would have to be primarily as the result of luck.”
But Weinstein said that the “fact that many players lose does not affect the quantity of skill demanded by a particular game.”
He continued, “The objective of chess—or bridge, or golf—is similarly to win. The fact that only one player or team wins a game or tournament does not diminish the skill required to achieve that victory.”
Weinstein said state courts have been divided on whether poker is a game of skill, a game of chance or a mixture, but federal courts “have generally treated poker as a game of chance and characterized it as gambling.”
But no court, he said, “has ruled directly on whether poker constitutes gambling as defined by §1955(b)(2).”
He added, “The overwhelming majority of cases have assumed, without analysis, that the government need only prove that the business involved gambling as defined by state law, not that the game operated constituted ‘gambling’ as defined” by the Illegal Gambling Business Act (IGBA).
Weinstein said the legislative history was not helpful, as “neither the IGBA as first introduced in both houses, nor the final adopted version, makes clear whether the statute federalizes all state gambling offenses.”
The judge returned to the “non-exclusive” list of examples of gambling in the statute.
“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,” he said. “The fact that card games like poker, pinochle, gin rummy, and bridge were so widely played by law-abiding individuals in non-criminal settings may explain its omission from the IGBA. As Sherlock Holmes would describe the clue, it is the dog that didn’t bark.”
In the end, the judge accepted the defense position.
“The government must demonstrate that it is more probable than not that poker is predominated by chance rather than skill,” he said. “It has failed to do so.”
Assistant U.S. Attorneys Marisa Seifan and Nathan Daniel Reilly represented the government.
Federal Defender Kannan Sundaram represented Dicristina.
@|Mark Hamblett can be contacted at firstname.lastname@example.org.