The judge was U.S. federal judge Jack B. Weinstein of the Eastern District of New York and the case concerned a defendant named Lawrence DiCristina who had been accused of running an illegal gambling club out of a Staten Island warehouse. DiCristina had been convicted a month earlier for violating the Illegal Gambling Business Act (IGBA), but Weinstein’s ruling overturned the conviction while offering copious argument for poker’s skill component.
The 120-page ruling was notable for a few reasons, one being the fact that it represented a first instance in a federal court of poker being distinguished as a skill game and thus different from certain other types of gambling. Within the ruling appeared discussion from economists arguing both sides of the skill-vs.-luck debate, with the Poker Players Alliance being involved as well as a supplier of briefs and testimony, playing “a central role in the case” (as they later pointed out in their press release).
For nearly 12 months the case has been brought up repeatedly by the PPA and others who champion the cause of poker being a skill game and thus to be regarded differently from a legal standpoint than other types of gambling. Put together with that Department of Justice memo from late 2011 specifying that the Wire Act only covered sports betting, the DiCristina ruling has sometimes been alluded to amid forecasts for a possibly rosy future for online poker.
Shortly after we learned of Weinstein’s ruling, our friend Grange95 wrote a thoughtful response over on his crAAKKer blog in which he considered its importance as far as precedents were concerned while also speculating about the likelihood of the ruling surviving appeal. He allowed there was a slim possibility it could be upheld, although ultimately had to conclude it probably would not. “If I were a betting man,” wrote Grange95, “I would wager that the decision is ultimately reversed on appeal” he decided.
Last week came the news that in fact the appellate court had overturned the ruling, with the three-judge panel reading the IGBA as unambiguously covering the type of activity DiCristina engaged in with his underground poker games.
Reading through the 23-page decision reversing the earlier ruling, the three judges point out how the IGBA “clearly outlines the activity that it proscribes,” listing its “three elements: (1) the gambling business violates the law of the state in which the business is conducted; (2) the business involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and (3) the business 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.”
That the latter two elements were illustrated by DiCristina’s operation were undisputed facts of his case, as the games involved enough people, had gone on long enough, and were of high enough stakes to satisfy each of those. Meanwhile, the first element of the IGBA points back to each state’s definition of illegal gambling, something the IGBA expressly avoids defining itself.
While making their case, the judges jump on that part of the Weinstein ruling that tried to say “Only ‘Games of Chance’ are Gambling Under IGBA.” The earlier ruling acknowledged that the “IGBA does not provide explicit criteria for what constitutes gambling,” then decided to do a little reading between the lines to say the various acts that are listed by the IGBA as examples of operating an “illegal gambling business” are unified into a “cohesive group” as “all of the enumerated games are ‘house-banked’ and that chance predominates over skill of the players in determining the outcome.”
Incidentally those acts listed by the IGBA come in a subsection stating that “‘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.”
The earlier ruling goes on to argue that all of those examples refer to chance-based games. (“Bolita,” by the way, is Spanish for “little ball” and refers to a kind of lottery once popular in Cuba and which was played illegally in Florida during the early-to-mid 20th century.) Coming after the lengthy argument that poker is not a chance-based game, it is concluded that the IGBA doesn’t apply to poker and thus DiCristina can’t be charged with violating the IGBA if poker was the game on offer in his warehouse (“Poker is Not Gambling Under IGBA”).
But the appellate judges see this whole argument as irrelevant, and for a few reasons. For one, it stubbornly tries to make the IGBA define what gambling is when the IGBA expressly leaves that to the states to decide. It doesn’t matter if poker is gambling or not under the IGBA, the judges point out, because the IGBA leaves that up to the states.
Secondly, that collection of gambling-related acts isn’t meant to be comprehensive, only offering a sampling of gambling-related activities that “includes but is not limited to” those appearing on the list.
Furthermore (say the three-judge panel), the list enumerates “acts of running a gambling business,” not acts of gambling. Look back at the list -- it isn’t a list of games, but of examples of running games. “Had Congress intended to limit the reach of the IGBA to businesses operating games of chance,” explain the judges, “it could have done so by inserting that language in subsection.”
Thus did the judges conclude “we do not need to decide whether poker -- or any other type of gambling -- is sufficiently like the enumerated games to fall within the IGBA. Rather, the gambling activity must only be prohibited by state law and meet the additional criteria set forth in the IGBA.”
Grange95 pointed out a year ago that even if the DiCristina decision were reversed on appeal -- as has now happened -- “the portion of the decision analyzing the ‘skill game’ argument would potentially still have precedential value.” In other words, future lawyers could still bring it up and point out that the case in which the argument appeared was “reversed on other grounds,” although he points out, too, that in many states the whole skill-vs.-luck issue in poker has been made irrelevant with poker’s grouping with other forms of gambling already having been decided.
Meanwhile, the apparent ease with which Weinstein’s ruling was reversed sure makes what the judges are doing seem like a “skill game.” I mean despite a year’s worth of happy references to Weinstein’s ruling, was there ever really much chance of DiCristina getting lucky here?