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>> ALERT COURT REJECTS FEDERAL CRIMINAL CHARGES AGAINST HOST OF HIGH-STAKES POKER GAMESOnline poker playing may have received a big boost as a result of a decision by a federal judge in New York. The decision overturned a federal criminal conviction against Lawrence Dicristina for operating an illegal gambling business involving poker games in violation of the federal Illegal Gambling Business Act (the Act).
A jury convicted Mr. Dicristina, who
hosted “No Limit Texas Hold’em”
games, for violating the Act. He then
moved for a judgment of acquittal
on the grounds that a poker room
does not fall under the definition of an
illegal gambling business proscribed
by the federal law because poker is
predominately a game of skill rather
than of chance. The court agreed,
ruling that his acts “did not constitute
a federal crime.”
A GAME OF SKILLIn a lengthy and well-reasoned
decision, the court pointed out that
the Act does not specifically include
poker as a prohibited game. The
court reasoned that to constitute
an illegal gambling business under
the federal law, a business must
operate a game that is predominately
a game of chance. Poker, the court
continued, is influenced by both the
cards dealt (determined by chance)
and the decisions made by players
(determined by skill). The court found
that poker is “predominately a game
of skill” and that the ability of players
to influence game play “distinguishes
poker from the other games, such as
sports betting (bookmaking)” that are
specifically enumerated in the Act.
Accordingly, because the poker
played in Mr. Dicristina’s games
was not predominately a game of
chance, it was not gambling as
defined by the Act, and the court
overturned his conviction.
LIMITSIt is important to recognize that
generally federal courts have treated
poker as a game of chance and have
characterized it as gambling. This
case is only one federal district court
decision applying the Act to poker.
Thus, federal prosecutions of poker
still may continue in other jurisdictions.
Moreover, states maintain the ability
to bar poker games under their own
laws. For example, courts in New
York have long considered that
poker contains a sufficient element
of chance to constitute gambling
SEPTEMBER 2012
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THE BOTTOM LINE
The ruling in the Dicristina case
and the specific findings about
skill predominating over chance,
combined with fairly recent rulings
and regulatory changes relating to
fantasy sports and the applicability
of the Wire Wager Act, seem to
be positive steps in the direction
of loosening existing restrictions
on poker and other skill-based
“fringe” gambling activities.
Ultimately this could be a big win
for companies seeking to operate
in the online gaming space.
>> continues on next page
under New York law. Several state
gaming laws (ranging from California
and Connecticut to Idaho and
Wisconsin) explicitly include
“poker” in their definition of gambling
or define it as a game of chance.
Other states (such as Florida and
Michigan) implicitly include poker in
their definition of gambling.
>> ALERT
SEPTEMBER 2012
ADVERTISING, MARKETING & PROMOTIONS
In addition, in certain instances,
state gambling laws criminalizing
poker could serve as the basis for
federal prosecution under the
Racketeer Influenced and Corrupt
Organizations Act. It should be noted
that video poker, which is “house-
banked” and where players play
against a machine (the house) rather
than other players, may not fit within
the court’s decision in the Dicristina
case.
FOR MORE INFORMATION Joseph J. Lewczak Partner 212.468.4909 [email protected]
or the D&G attorney with whom you have regular contact.
Davis & Gilbert LLPT: 212.468.48001740 Broadway, New York, NY 10019www.dglaw.com
© 2012 Davis & Gilbert LLP
