Tuesday, October 10, 2006

Considering the Unlawful Internet Gambling Enforcement Act, Part I: "A Game Subject to Chance"

Previous iterations of the UIGEA contained a section designed to update the 1961 Wire Act. The 35-year-old law specifically prohibits anyone from taking sports bets over the telephone (or “wire communication facility”). That law refers to “bets and wagers” both in a generic way and with regard to a “sporting event or contest.” My understanding is the law is also primarily aimed at folks who try this sort of thing across state lines. In other words, once the Wire Act came down, the poor sap in Idaho who routinely called in his football bets to Vegas was no longer able to do so.

There are two ways the old Wire Act doesn’t quite address online poker. One, it isn’t clear whether the internet is to be understood as a “wire communication facility.” Two, it has yet to be determined in a court whether “bets and wagers” includes something like poker. According to Allyn Jaffrey Shulman of CardPlayer, a case was brought before a District Court judge back in 2001, and that judge determined the Wire Act in fact did not apply to online gambling (including poker).

Nonetheless, the Attorney General’s office of these here United States continues to maintain in a blunt, non-specific way that the 1961 Wire Act indeed makes online gambling illegal. And when they say gambling they mean poker, too. Incidentally, the Attorney General -- Alberto Gonzales -- is the government’s legal advisor. He is part of the executive branch of government. That’s the branch that enforces the laws (not like the legislative branch that writes the laws, or the judicial branch that interprets the laws). Even though the Attorney General often has a lot of influence over how laws are interpreted, he doesn’t get to interpret them.

Back in 2003, then-Attorney General John Ashcroft sent his deputy assistant, John Malcolm, over to the Senate to tell them that online gambling was a problem, particularly because it made it easier to launder money. According to Malcolm, the growth of online gambling sites (including poker sites) represented a “great concern to the United States Department of Justice, particularly because many of these operations are currently accepting bets from United States citizens, when we believe that it is illegal to do so” (emphasis added). The Attorney General's office can "believe" whatever it wants to about how to interpret a law, but in reality the courts get to decide such things.

When the UIGEA was revised late last week and rammed through Congress, the section attempting to update the Wire Act (to include transactions via the internet and to revise “bets and wagers” to include other kinds of gambling than betting on sports) was removed. What was left behind does include vestiges of that section of the Act, including a passage early on that defines a “bet or wager” as “the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance.”

So the version of the Act that passed through Congress doesn’t exactly take care of the whole “can we regard the internet transactions the same way we regard transactions made over the telephone” question. (Although its references to “interactive computer services” does address this issue -- more about that in the next post.) However, this version does contain this somewhat tangential reference to other kinds of online gambling -- which, depending on your point of view, may or may not include online poker.

Some groups -- such as the Poker Players’ Alliance -- continue to argue poker should not be regarded as “a game subject to chance.” On their website, the PPA insists poker is “a skill game.” Indeed, over on the 2+2 Forums there was an inspired post and discussion hoping for a “poker carve-out” in a lame duck session of Congress that would make an exception for poker.

Nice idea. Ain’t gonna happen, though. The fact is, the authors of the Act and (many of) those who voted for it are thinking primarily here about online poker. They unflinchingly see it as “a game based on chance.”

This is the only part of the Act with which I agree.

I’m not saying I like it. Nor am I saying that the Act does an unambiguous job of amending the definition of “bet or wager” to include poker. But I have to agree that poker, while a “skill game,” is also most certainly “a game based on chance.” How about a quick for instance . . . ?

Last Friday, late afternoon. I’m sitting in the BB with ThJc. (Again, 6-max limit HE, $0.50/$1.00.) First two players fold, the cutoff limps, and the button raises. The SB folds. I call the raise, as does the limper, so we’ve got three to the flop ($3.25 in pot).

The flop comes QhJs Tc and the action is on me. Big Slick may be lurking. (I’ve written before about players making “the Big Slick assumption” about preflop raisers.) Or a set of queens. Actually, though, I’m thinking I’m probably good here . . . for now, anyway. The button has shown he’ll raise from late position with less than premium stuff, and the limper has been gunning for almost every pot. I check it, the limper bets, and the button just calls. The button could be slowplaying something big. Or not. I check-raise, figuring (1) I’m probably still good, and (2) if I’m not, I might be able to determine that right here. The limper calls, then the button reraises. Uh oh. Hello Big Slick. I call, as does the limper, so now the pot is $7.75.

The turn is the 9h, a card I did not want to see. Even before the limper bets and the button raises, I was certain I was no longer in front. Now I’m caught in the chip sandwich -- if I call, I’m probably looking at more raises and ultimately putting in four bucks to see that river card.

Now I am capable of folding a hand like this, but this time I decided to chance it. That’s right. I made a conscious decision to continue with a hand where I knew I was an underdog and did not have pot odds on my side. I’m hoping for a jack or ten on the river -- four measly outs (and, in fact, I can’t be certain any of them actually give me the nuts). As I suspected would happen, the betting was capped on the turn, so I ended up contributing $4.00 into what had now ballooned to an $19.75 pot. Playing like a donk here, odds-wise, since I’m taking an 11.5-to-1 longshot while getting not even 4-to-1 on my money.

The last card came . . . Jd. Sweet sassy molassey. Your humble donkey bet out, was called by both players, and scooped $22.25 (giving fifty cents to the rake). Knowing full well I’d rivered them both, I didn’t even bother to look up what they had until today. Limper had 8hKd for the second-best straight. Button indeed had AcKs. Showing he’s a good sport about such things, the button typed “nh” to me. I responded shame-facedly: “not really, but thx.”

(Feel free to file this one in that growing folder of "Rat, River, Shamus Is A" we've been building here over the last few weeks.)

Poker is gambling, let there be no doubt. Or perhaps it is more accurate to say poker involves gambling -- to a greater or lesser degree, depending on how one approaches the game. Good players tend not to take the “worst of it” like this very often. But even those who never stay with hands unless the odds dictate they should are still playing “a game based on chance.” Big Slick capped the betting on the turn knowing there might be at least a few river cards that would take his money away. The CardPlayer Hold ’em calculator says he was over 90% to win or tie going to the river. But that still means he could lose. He, too, was playing "a game based on chance."

In Anthony Holden’s 1990 book, Big Deal: Confessions of a Professional Poker Player, Holden offers early on to explain why poker might be considered more of a “skill game” than other forms of gambling. “The difference between a gambler and a poker player is a crucially simple one,” writes Holden. “A gambler, be he one who bets on horses or sports events, on casino games or raindrops running down windowpanes, is someone who wagers on unfavorable odds. A poker player, if he knows what he is doing, is someone who wagers favorable odds. The one is a romantic, the other a realist.”

Nicely put. Note, though, that both are wagering. Both face odds -- i.e., there’s a chance both might lose.

I’m a poker player. I’m also a realist. That’s why I believe our new definition of “bet or wager” -- lovingly bequeathed to us in this here UIGEA -- is always going to refer to poker as another "game based on chance."

In the next post I’ll talk a bit about what the Act says about “interactive computer services” (or ISPs) and how I think that part of the Act is gonna affect us American punters. Perhaps more than any other.

Photo: “Honest Abe” (adapted), jeff_golden. CC BY-SA 2.0.

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Blogger Cell 1919 said...

Interesting perspective.

The bounce of a rugby football is a product of chance. If it goes one way a team scores, another way and the other team picks it up runs the full length of the pitch and scores. Same kick, different bounce.

I'd like to think that poker is a game of judgement rather than chance, although when the outcome depends in the large part on the way the deck comes out it can be difficult to support that view with any conviction I admit.

10/10/2006 5:35 PM  
Blogger derbywhite said...

Cell - don't ring egg chasing into it :-P

There is no more evidence needed than watching Jamie Gold hit flop after flop in the World Series. It is a game of chance but we all know that to pull off a coup like Gold did at WSOP requires a massive amount of skill.

In percentage terms I would say

Skill = 70%
Chance = 30%

10/11/2006 9:44 AM  
Anonymous Yorkshire Pudding said...

I don't agree with 70% skill and 30% luck. Even the great Texas Dolly says in big field games like that it is over 70% luck. There is so much luck involved it is unreal. Yes there is an awful lot of skill needed too but you need to have lady luck shining on you to have any hope of winning, look at Jamie Gold, he played some decent big stack poker but his luck was unreal, if it was online you'd have sworn it was rigged!

10/12/2006 8:16 AM  

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