Judge Says Poker Is A Game Of Skill, Not Chance -- Could Impact Legality Of Online Poker

from the skill-vs.-chance dept

Mon, Feb 23rd 2009 9:07am — Mike Masnick

While there's an effort underway to repeal the federal government's ban on online gambling, a recent legal ruling could help out a bit as well. A judge in South Carolina found that poker should be considered a game of skill, rather than a game of chance. Of course, in dealing with the state law at issue in that case, the result didn't matter -- as the law didn't distinguish between skill and chance. However, the rather murky set of federal laws that have been used to fight online gambling may not cover "games of skill." The problem is... well... no one's quite sure what it really covers. Basically, there's no real anti-gambling law. There are certain laws, like the Wire Act, that have been used against online gambling -- and the more recent law (oddly included as part of a harbor protection bill) was more focused on stopping financial institutions from accepting money used for gambling. But, with the judge's ruling, some are pointing out that this means online poker shouldn't be considered gambling -- and the other federal laws shouldn't apply (state laws are a different matter, however).

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Filed Under: chance, laws, poker, skill

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webster, 23 Feb 2009 @ 9:24am

Definition of gamble
1 a: to play a game for money or property b: to bet on an uncertain outcome2: to stake something on a contingency : take a chance

above from webster

I'm not sure that having skill involved makes it any less gambling than pure chance. It's the fact that money is at stake in an uncertain event that makes it gambling.
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jonnyq, 23 Feb 2009 @ 9:50am

After online poker, sports betting is the next type of gambling that gets mentioned often in stories like this. No one has ever called sports games of chance, so I don't see much of an impact by including poker in that as well.
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Anonymous Coward, 23 Feb 2009 @ 9:54am

I could go to Vegas and win the World Series of Poker. I could not walk out on a golf course and beat Tiger Woods. Ever.

Nuff said.
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Anonymous Coward, 23 Feb 2009 @ 10:00am

Re:
Yeah... you could if you were really good at poker. Just like you could beat Tiger Woods if you were really good at golf. Just because a game of cards doesn't require physical skill doesn't mean it's easier.

Nuff said.
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Anonymous Coward, 23 Feb 2009 @ 10:08am

poker
its a game of both skill and luck(chance) no matter how much skill you have, if you dont get the winning hand at some point in time, your not going to win. you can bluff and win hands(skill-reading opponents) but that doesn't always fly, you can never win with skill alone cause eventually it comes down to someone else with enough skills to get as far as you had and one of you is going to get a good hand and the other is going to get a better hand and game over. dont get me wrong, i dont think it should be banned, but its not a game of pure skill. I still would like to play online hassle free without the government being worried about what i'm doing with the money i earned and paid taxes on.
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Davis Freeberg, 23 Feb 2009 @ 10:10am

Betting on a team to win or lose is considered chance because you can't personally affect the outcome. If an athlete was betting on themselves, it'd probably be different but since most of us don't play on the Lakers, it'd be consider chance. Since you have to play the game of poker in order to bet, you have a direct influence on the uncertain outcome.
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Anonymous Coward, 23 Feb 2009 @ 10:13am

Get real, how many "professional" poker players have won the WSOP main event in the last 5 years?

Get the cards and you could win. Luck. Me, you, anyone. Hard to beat the best hand. Sure, it takes skill, but luck is the overriding factor in poker.

Dan Harrington was interviewed going into the final session and asked his odds of winning. He stated "I have 13 percent of the chips left, you say I am the best player in the world, so I would say I have a 20% chance of winning"

So in a poker players estimate, skill only added 7% to his ability to win. Now, maybe he was just being modest, maybe take that to 40%.

Tiger still kicks my ass every day on the golf course.

Luck is the main factor in poker.
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josh, 23 Feb 2009 @ 10:17am

Poker involves skill, for example calculating odds based on cards dealt or a good poker face(less useful online). These skills can help to determine the outcome.

Betting on sports may require skill as well, for example studying the participants' performance in certain conditions (his father was a mudder, his mother was a mudder). These skills however do not help to determine the outcome, they only mitigate the gambler's risk. Therefore betting on sports is not a game of skill.

Betting on sports is like betting on who will win a poker game. And that right there, "poker game" I think helps define it as well. It is game, and the participants are "poker players" and poker could be played without the need for monetary exchange, a point system could easily be substituted (but that would resemble the marketability of non-alcoholic beer).

Anyway, I think it makes sense that poker be considered a game of skill...
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Plac Ebo, 23 Feb 2009 @ 10:22am

1 a: to play a game for money or property b: to bet on an uncertain outcome2: to stake something on a contingency : take a chance

Sounds like the stock and commodity markets to me.
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Anonymous Coward, 23 Feb 2009 @ 10:24am

Re: Definition of gamble
The same thing happens when you buy something online. You might have an idea of what the out come should be but it is uncertain if that will happen until it arrives, if it arrives.
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Ragaboo, 23 Feb 2009 @ 10:42am

Re:
Ditto here. I've always thought that if they want to call poker gambling, they should hold investing to the same rules. They shouldn't allow financial institutions to fund my trading habits. They should babysit me and make sure that I don't lose my money on Wall Street OR the felts.
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hegemon13, 23 Feb 2009 @ 10:44am

Re:
From purely your profit perspective, yes, that is perhaps true. However, the major difference lies in the fact that an investment is productive in and of itself. An investment allows a (hopefully) productive company to operate, and therefore offer goods, services, jobs, research, etc. In addition, with investments, the "player" (investor), and the "house" (company) are on the same team. They both want to see a return on the invested money, and both can have a gain. It can, and often is, win-win.

Gambling, while perhaps equally risky to the stock market, is not productive. The money goes in strictly for the purpose of a possible return, and does nothing else in the mean time. Gambling is, by definition, win-lose.

Yes, there are bad companies out there that do nothing productive with investment money. However, investment in general is crucial to the economy and the operations of businesses. Gambling is simply a transfer of funds between parties with no net gain in the larger picture.
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David, 23 Feb 2009 @ 10:53am

Luck
I think there is a certain amount of luck involved in most games. Just as there is a certain amount of skill involved in most games. Someone mentioned golf, bad luck in golf is a headwind that comes up just as you hit the ball.

I think the issue here is not the luck or the skill but the money being bet. Now I have no problem with someone betting their money away, it's their money. I would guess there are as many people out there that have shopping addictions as there are gambling addictions. Nobody is making it illegal to blow all your cash on a new radio, so why is it illegal to blow your money on a bet?
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Anonymous Coward, 23 Feb 2009 @ 10:57am

If poker really is simply a game of chance, then how can there be players who make their living playing poker? If it's all luck, or mostly luck, then shouldn't everyone win equally, which would make it difficult to profit?

Sure, in a given tournament luck is going to be a huge factor. But over the long run, years of play, the better players are going to win. Poker is too complex to simply say that luck is an overriding factor. Luck evens out in the end, and it's the skilled players that are ultimately going to profit.
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Anonymous Coward, 23 Feb 2009 @ 10:57am

Re: Re:
no net gain in the larger picture, but no net loss either. its not like if you prevent people from gambling then all of the sudden there going to invest it. so there is no net gain in preventing the gambling either. i mean of course you have people who lose everything cause they cant control themselves and then the big G has to support them (ie a net loss) however, those same idiots are going to lose there money elsewhere anyway and still end up with the same net loss. so there is no real net loss in allowing the gambling.

I suppose the real reason they do it, or so ive heard is because of something to do with money laundering.
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Greg, 23 Feb 2009 @ 10:59am

Re:
No, you couldn't just 'go to Vegas and win the World Series of Poker'. You've obviously never played with anyone who knows how to play. From the movie Rounders: "Why do you think the same five guys make it to the final table of the World Series of Poker EVERY YEAR? What, are they the luckiest guys in Las Vegas?"
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Judsonian, 23 Feb 2009 @ 11:03am

Huh?
Gotta change the skill/ chance argument a little guys. While a 40ft putt (golf) does require a LOT of skill, can anyone tell me there is NO luck involved? If luck was not a factor then why compete? Enough practice and a 40 ft putt (or 400Yrd. hole in one) would not be nearly the accommplishment. It all comes down to weither or not money exchanges hands as a result of the outcome.
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hegemon13, 23 Feb 2009 @ 11:26am

Re: Re: Re:
My argument above was not an argument for banning gambling. It was an argument to show how gambling!=investment, despite some surface similarities.

Personally, I think gambling would be less damaging if it were unregulated. The scale of loss is a lot more controlled when you have a bunch of middle-income guys playing poker in the garage with limited skill. Plus, simple reputation pushes cheaters out of the game. Consensual gambling should be perfectly legal. I think you are right that money laundering and tax evasion are the key reasons that it isn't. That makes no sense, however, since no wealth is being produced. The government has already taxed that money no matter whose hands it is in.

Instead, a person who wants to gamble has to fulfill that desire through a government-approved "professional" gambling facility. They are professional, in that they are professionally skilled at taking your money and ALWAYS having a net win. They are so large that the scale of loss can become ruinous to the individual. They also have the money and power to influence politicians to pass laws that favor them.
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skinnypete, 23 Feb 2009 @ 11:37am

Re: Definition of gamble
This is irrelevant. All "Online gambling" is not illegal. It's not the "gambling" that is illegal - playing fantasy sports for money online as well as I believe horse racing is allowed under the new ban. The question of chance does come in to play and is the very core of the fight concerning online poker. The reason online poker is banned IS because it is considered to be under the umbrella of a game of chance. THAT is the ban. The meaning of the word "gambling" is just not understanding what the ban covers.
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Anonymous Coward, 23 Feb 2009 @ 11:51am

Poker is a game of chance, plain and simple. Skill will help, but it's still a game of chance, because there's almost always a chance that somebody has a better hand than you, or can out-play you. I honestly have no opinion right now on whether or not online gambling should be regulated by the government or not (even though I think gambling in and of itself is wrong), but I will not let somebody say that it's all skill, because it's not. Just try to tell any top poker champion that it's a game of pure skill, and they will disagree without hesitation.
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OneDisciple, 23 Feb 2009 @ 12:11pm

Re:
Please point out where anyone said poke was 100% skill. Please point any game you considered to be 100% skill. "even though I think gambling in and of itself is wrong" on what moral standard do you proudly proclaim this conviction? Please do not say religious because that can not be true. Bingo any one! So what does that leave? How about the Lottery? The fact is gambling is everywhere. When you pay insurance on your car, house, or at BestBuy you are gambling.
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Anonymous Coward, 23 Feb 2009 @ 12:44pm

Should online gambling be illegal? Personally, I don't care one way or another.

The same 5 guys are at the final table every year? What poker have you been watching? The last 5 winners have been people no one ever heard of. Moneymaker? He turned into the John Daily of poker.

Fact, amateurs have won the last 5 main events. Did 5 amateurs win the last Masters?

Are some better than others? Of course. On any given night, I could take Phil Helmuths money. On any given day, Tiger is keeping his.
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rjk, 23 Feb 2009 @ 12:45pm

Skill will help, but it's still a game of chance, because there's almost always a chance that somebody has a better hand than you, or can out-play you.

if someone "can out-play you" that is by definition skill.

a significant number of poker hands never go to showdown. This is because when faced with the multiple decisions to fold/bet/call/raise during the play of any given hand, most players DECIDE to fold at some point before the hand gets to show down. That decision-making process requires SKILL.
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Stuart, 23 Feb 2009 @ 12:46pm

Re:
Getting really lucky and being dealt a royal flush in one hand. Any idiot can win because he knows he cant be beat and no amount of skillful bluffing will sway the guy with the royal flush. Now I am not sure exactly what the odds are of a guy new to golf hitting a hole in one out of pure luck but it cant be much worse than getting dealt a royal flush. Golf is 18 holes. WSOP is alot more than 18 hands. I would say statisticly it would be easier to beat Tiger Woods at golf having no skill than to win WSOP with no skill.
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Anonymous Coward, 23 Feb 2009 @ 12:53pm

To all those that think poker is just luck...
... please come join my regular game. You should have the same odds as anyone else, right? Bring money...

Seriously, one hand can be one by someone with luck. The skill factor makes the difference when many hands are involved.
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webster, 23 Feb 2009 @ 1:22pm

Re: Re: Definition of gamble
It's not irrelevant. The first sentence of the article says "the federal government's ban on online gambling" I'm just stating the fact that having skill involved does not exclude it from being gambling.
Horse racing is legal gambling. It's an exception. As is Riverboat gambling and Las vegas. For that Matter so is the lottery. (which techdirt has brought up in the past).
What you are actually asking for is a legalized exception for online poker. You can make the case that it's because skill is involved, but that really what is irrelevant. It's still gambling and it's still illegal under the current law.
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nasch, 23 Feb 2009 @ 1:27pm

Re: Re:
While I mostly agree with you, you are incorrect in your assumption that all religions support gambling on bingo or the lottery or some other exception. Some condemn all gambling. Before you point out the stock market, see the discussion above for why it's at best unclear that that's gambling.
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anymouse, 23 Feb 2009 @ 1:47pm

History repeating itself
At some point in history Moneylenders were driven from the Church. There are lots of explanations/justifications, but the simplest is that the Church didn't like the competition for their subjects 'assets' (if people borrowed money and had to pay it back to the moneylenders with interest, they wouldn't have as much to 'tithe' to the church).

This is the exact same thing, it's not a problem with the action or the service (other than the source), but about who is profiting from the activity. If online gambling was being taxed and the US government was getting their appropriate cut (they seem to feel 30-40% is 'appropriate' most of the time), then it would be legal and there would be no problem. However since most of the online gambling sites are outside the US, the US gets no cut of the action, and so their natural reaction is to make the entire action illegal (worked for Drugs and Terrorism, right?).

Working at the speed of Government....
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Relonar, 23 Feb 2009 @ 2:27pm

Re:
ok, over the course of a long time (many hands), each person has the same chance of winning, the skills and experience will determine the winner.

Even if you have the royal flush, during the rounds of betting a well seasoned player will be able to use this to his advantage and bet as if he was playing a modest hand in order make the pot larger. summed up: with 100% chance of winning one hand, the amount of the winnings vary determined by skill.
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Anonymous Coward, 23 Feb 2009 @ 2:37pm

Yeah, yeah, yeah, its all skill. Thats why not one "pro" player has won the main event in the last 5 years. Overcome that argument and I will listen to you. Even the "experts" say that a pro player will probably never win the main event in the future. That is unless of course, poker loses its charm and it goes back to what it used to be.

Unless of course, the pro players really are not all that good and it is all just marketing, then maybe it is a game of skill.
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Weird Harold, 23 Feb 2009 @ 2:55pm

decided a long time ago in Cali
One of the reasons there are poker rooms in Los Angeles is because poker was found not to be a game of chance a long, long time ago. California regulates the poker rooms (in the same manner they would regulate alcohol / bars). Really, this isn't news.

The laws used to "stop" online gaming are weak, mostly using intimidation tactics to get banks to toe the line. Yet you can go online to any of the major poker systems and find that probably 25% of all the players are from the US. With Bush and his bullies out of office, I expect to see a change in this soon enough, perhaps a move to tax it on a federal level instead.
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rjk, 23 Feb 2009 @ 3:11pm

Yeah, yeah, yeah, its all skill.

meaningless argument since no one said it was all skill.

Just because luck is involved doesn't mean skill isn't involved.

not one "pro" player has won the main event in the last 5 years.

Greg Raymer was a known and well-respected poker player in poker community and routinely played in the high-stakes games in his local casino.

Joe Hachem was a pro online player

Peter Eastgate was a pro online player

In poker the amateur/pro distinction is almost meaningless... there is no criteria for being a 'pro' other than one saying they play for a living. plus there is no way to actually confirm that the player is actually earning a living playing poker.

Just because someone is an amateur doesn't mean they don't have skill.

In deed luck does play a significant role in short-term poker results and that combined with the large ratio of 'unknown' players to 'known' players means that a 'unknown' player is more likely to win the WSOP.

However, unknown doesn't necessarily mean unskilled or amateur and known doesn't necessarily mean skilled or professional.

Poker is not all skill or all luck. It is something in between.
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Anonymous Coward, 23 Feb 2009 @ 4:56pm

Re: Re:
rounders was before hold'em was popular. So yes it was always the same 5 guys...
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Anonymous Coward, 24 Feb 2009 @ 6:57am

Then why do the announcers of the show keep saying that "a pro will never win the main event in the future"

Is there skill? Of course there is, but that is only a part of it.

Is there luck in sports? Of course, but it is a smaller part.
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ubetido, 24 Feb 2009 @ 6:59am

This whole argument is a total crock, it is only about established players in the gaming industry protecting their turf,if someone started chess on line for money they would find a way to close it down as well. As unfortunate as it is for poker players the horse racing and lotteries groups will always have more money to ensure that the status quo is maintained.
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macadrain poker, 13 Mar 2009 @ 4:37am

Ya! poker is the game of skill but also the game of luck also. So, poker is the combination of both skill and luck. Thank you for your such a nice content.
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silky, 26 Mar 2009 @ 7:19am

Re:
your chances on this are about the same
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Gregory, 11 May 2009 @ 7:33pm

Re:
Many recent events have brought attention to the legal standing of online wagering in general. The first thing to understand is the skill game of online poker is not the same as sports betting nor even "random chance" casino games like slots, craps and roulette. It may be treated the same eventually, but it may not. Legal precedent for a lot of this simply does not exist.
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K. Kamin, 25 May 2009 @ 4:47pm

Re:
You don't understand what you are talking about at all. There is an endless debate on how much luck versus skill there is in poker, but the question is almost pointless. Luck will dictate short term results. Yes I could sit down with Johnny Chan and beat him. But if we played 100 heads-up tournaments against each other he probably would win about 70+ of them. Poker is as complicated as chess, and the skill is visible over the long term. After a large sample of hands, everyone is pretty much dealt the same distribution of cards and what you do with them is what counts.

Harrington putting himself at 20% to win at a table of 9-10 people is huge. If he has that kind of edge all the time in that situation, he's going to make a lot of money. And he does.
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Rod, 26 May 2009 @ 3:11pm

Re: Anonymous Coward
Anonymous Coward said:

"I could go to Vegas and win the World Series of Poker. I could not walk out on a golf course and beat Tiger Woods. Ever.

Nuff said."

Dude, that is just so OFF.

First off, you can't beat Tiger Woods unless you get very good at golf. If you are very good at golf, there's numerous people in the world that can claim to have beaten or outlasted Tiger in a tournament. (He's obviously the best though.)

You can't just walk into the WSOP with no knowledge of No Limit Texas Hold 'Em, and think you'll win.

You have to learn the game. And, if you think you can wade through that minefield with no experience at all, you're clueless.

Every single one of the WSOP winners had some form of experience playing the game. Jamie Gold, even, perhaps one of the douchiest players, had won quite a few casino tournaments before playing the WSOP.

You have to develop SOME form of skill to win this game. And, without question, skill shows over time.

Thinking one game proves whether someone has skill or not is like basing Tiger Wood's game on one game. No, instead, you base it on all of his accomplishments put together. In one game, he can easily not win. But, over his lifetime, it's hard telling how much he will accomplish.
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Emily, 1 Jun 2009 @ 12:33pm

That what I thought, It's not a question of chance. When I was in Vegas I saw some unbelievable players ! Definitely not chance.

Emily
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cheese, 13 Jul 2009 @ 1:17am

You can win in a game not by chance but by skills yes ofcourse. But some of us wins because of luck. But most online games required skills for you to win.
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Anonymous Coward, 20 Jul 2009 @ 10:42am

Poker is a game of skill based on psychology and knowing how to manipulate the involved elements of chance to your advantage.
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A Poker Player, 2 Oct 2009 @ 9:22am

The similarity between investing and poker was brought up earlier, and it can be used to more accurately describe how poker is more skill than chance, a conclusion come to by a court of law, where both sides' lawyers called upon expert witnesses and argued to the best of their ability for each side.

Take someone who knows nothing about investing. Could he pick something that performs better in a week, month, even a whole quarter than Warren Buffett's investments? It certainly is conceivable, and has happened before. However, that doesn't mean that he's got the same chances as the Oracle of Omaha. Long term, Warren Buffett will crush him or pretty much anyone else in the investment market.

Poker is the same way. A single win or loss of a hand is statistically insignificant. It is a long-term game of skill despite the fact that money changes hands in the short term, based upon chance.

Yes, it requires some luck for a professional to win a poker tournament, it always does. However, their chances are far, far higher than an entirely new person to the game.

Poker IS gambling, but it is important to remember that all gambling has a statistical edge. In chance games like roulette, the edge goes to the house because of the 0 and 00. In poker, it is skill-based gambling where the statistical "edge" goes to the more skilled players, rather than an "edge" that goes to the house, producing long term gains and losses based upon that edge.

So again, poker IS gambling, AND it is a skill-based game.
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Jesse Hoffman, 11 Dec 2009 @ 1:02pm

Re:
I could defeat Tiger W. in golf if he had a broken arm, I sincerely believe that I could beat him in croquet if he had a cold... However, to be able to come in the top 10 in the WSOP I would need a million dollars I could sit back comfortably on to alleviate the stress of the buy in... and a decent amount of luck since HolDUM is mostly luck.
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Jesse Hoffman, 11 Dec 2009 @ 1:24pm

Re:
that depends on the type of poker being played... even so, in the more skillfully played variants of poker, I would type from experience here that they even have slightly more luck than skill overall.
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