Penn. Court Rules Poker Is a Game of Skill

23 January 2009
In the first important legal decision of 2009, a trial judge in Pennsylvania dismissed criminal gambling charges against the operator of a garage poker room and his girlfriend dealer, holding that Texas Hold 'em is a game of skill.

Columbia County Judge Thomas A. James Jr., filed his written opinion on Jan. 14, 2009. Walter "Buzz" Watkins and Diane A. Dent had been charged with 20 counts of violating Pennsylvania's anti-gambling statutes. Prosecutors alleged they unlawfully solicited and allowed "persons to collect and assemble for the purpose of unlawful gambling."

Judge James dismissed all charges.

Mr. Watkins had set up poker tables in a rented garage. The only game spread was no limit Hold 'em. Antes were $1 or $2. There apparently was no rake or drop. Instead, winners were expected, but not required, to tip the dealer -- the larger the win, the bigger the tip.

In August and September 2008, an undercover vice cop sat in on several of the games. Charges were filed in September. Defendants quickly filed for a writ of habeas corpus.

Habeas corpus is Latin for "you have the body." But a better translation in practice would be, "You, jailor, bring this person to court, together with proof on why you should continue to be allowed to hold him in prison." It is also called the Great Writ, because it is the fundamental right of anyone accused of a crime to have a judge decide whether they should be set free.

In this case, Judge James had to decide whether Mr. Watkins and Ms. Dent could be guilty of the crimes charged.

The case was made somewhat easier because both the state and defendants agreed "that the controlling issue is whether Texas Hold 'em is 'unlawful gambling' under the Crimes Code." The Pennsylvania statutes, like many in the United States, have no definition of "gambling."

So, the first thing Judge James did was to turn to dictionaries. These were not much help.

Next, he looked at prior case law. Pennsylvania courts, like almost all others, have held that gambling has three elements: "consideration, chance, and reward." "Thus," the Judge wrote, "the controlling sub-issue is whether Texas Hold 'em is a game of skill or a game of chance or, if both, does skill trump chance or vice-versa."

There are disputes about how much skill is necessary to make a game not gambling. Judge James adopted the majority test: "If skill predominates, it is not gambling."

Courts have developed many different tests for skill. Judge James decided to apply these four: whether each player has sufficient data available to make informed choices; whether each player possesses and has the opportunity to exercise skill; whether skill sufficiently governs the outcome; and whether the standard of skill is known to all players.

Judge James' conclusion could be extremely important, because it is the first case to look at recent literature and current scientific studies.

Judge James cited articles from 2007 and 2005, including from the Gaming Law Review, of which I am co-editor-in-chief. He looked at the many how-to books, including the 2008 edition of Mike Caro's "Caro's Fundamental Secrets of Winning Poker." And he examined a statistical study of online poker published by academics in Sweden.

Virtually every author and expert agreed, of course, that "in the long run, good players will win money and bad players will lose money."

According to the Press Enterprise, a paper in Bloomsburg, Penn., Mr. Watkins thinks the whole thing was a waste of money, especially the undercover cop.

"The funny part is, there was no need to send him in there," he said. "I get three or four police officers who play regularly in our games now."

Click here to view a copy of Judge James' opinion.

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I. Nelson Rose

Articles by Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law. Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law. A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States. With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic. He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

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