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Tuesday, February 18, 2014

Is Poker a Game of Chance? Let's Hope the Supreme Court Tells Us

The Atlanta Journal-Constitution reports:

Fifty-five million Americans play poker, but now the Supreme Court could weigh in on whether your basement poker game is a federal crime. 
Under Georgia law, betting on hands of poker, even around your kitchen table with friends, is illegal.

. . .

But the Supreme Court could soon step in. The feds busted and convicted a New York man for running a poker game in the back of his bicycle shop. He's now appealed to the nation's highest court.

. . .

The bike shop owner's attorneys claim poker shouldn’t be classified as illegal gambling because it's a game of skill. 
“The only way you can consistently win money is by skill,” Costner said.

But Justice Department lawyers don't buy that argument, saying in their brief to the Supreme Court, "Courts have long held that poker contains a sufficient element of chance to constitute gambling."
The case the article refers to is DiCristina v. United States. The Scotusblog page for the case is here. The Second Circuit's opinion is available here.

It always a long shot to predict whether the Supreme Court will take up a case. In addition to the question of whether poker is a prohibited game of chance, the DiCristina petition for certiorari asks a question of statutory interpretation over which the federal circuits seem deeply split. This extra question may make the case more appealing, though there is the possibility that the appeal may be limited to the non-poker question.

While it is unlikely that the Supreme Court will take up any given case, I hope they take up the question of whether poker is a game of chance. I am particularly interested in this case because of some recent scholarship on the issue. In their article, Is Texas Hold 'Em a Game of Chance? A Legal and Economic Analysis, Steven Levitt, Thomas, Miles, and Andrew Rosenfield confront this question in the online context and conclude that skill plays a substantial role. The citation for the article is 101 Georgetown L. J. 581 (2013). Here is the abstract:
In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), prohibiting the knowing receipt of funds for the purpose of unlawful gambling. The principal consequence of the UIGEA was the shutdown of the burgeoning online poker industry in the United States. Courts determine whether a game is prohibited gambling by asking whether skill or luck is the “dominant factor” in the game. We argue that courts’ conception of a dominant factor— whether chance swamps the effect of skill in playing a single hand of poker—is unduly narrow. We develop four alternative tests to distinguish the impact of skill and luck, and we test these predictions against a unique data set of thousands of hands of Texas Hold ‘Em poker played for sizable stakes online before the passage of the UIGEA. The results of each test indicate that skill is an important influence in determining outcomes in poker. Our tests provide a better framework for how courts should analyze the importance of skill in games, and our results suggest that courts should reconsider the legal status of poker.
Readers who are interested in further arguments along the same line should also check out this article by Rogier J.D. Potter van Loon, Martijn J. Van den Assen, and Dennie Van Dolder, whose results "suggest that skill is an important factor in online poker."

If there is indeed strong evidence that skill plays a sizable role in online poker, I think it is even more likely that skill plays an even larger role in in-person poker, where analyzing the demeanor of other players is a key part of the game.

One might object to the prospect of Supreme Court review by arguing that if poker is indeed a game of skill, the law should simply be changed to reflect that. This conclusion relies on technical data that courts may lack the expertise to evaluate. But the response to this objection is that the law bans games of chance, and, in absence of further discussion by the legislature, it is the job of the courts to define what "games of chance" entail. If poker is a game of skill, and if lower courts or law enforcement agencies have been enforcing the law as though poker is a game of chance, remedying this error seems to be well within the province of the courts.

(H/T: Howard Bashman of How Appealing)

2 comments:

  1. In my opinion and t what I learned on a poker quiz, poker is not just about game of chances it is also a strategic game.

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  2. Found your blog excessively interesting indeed. I really enjoyed studying it.poker online

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