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Gaming Guru

 

Coalition Forms to Protect Poker Playing

12 October 2005

The United States Department of Justice has taken a clear stance asserting that on-line gambling violates the federal Wire Act, a 1961 statute which was passed long before the concept of the Internet was developed.

However, a careful review of the statute suggests that there are very strong arguments that the Act only applies to "bets or wagers on any sporting event or contest." A few years ago, the Fifth Circuit Court of Appeals upheld a lower court ruling which dismissed an action against a credit card company involved in on-line wagers because the government had failed to allege that the wagering involved was sports wagering. Each year ever since, Congress has considered a variety of legislative proposals to outlaw Internet gambling. To date, none have passed.

In the meantime, there has been an explosion in the growth of on-line gaming, with an unbelievable growth in the availability of on-line poker. Some of these sites offer wagering. Others are free play sites. Yet, others are structured as tournament sites where, for a minimal entry fee, a participant can compete for a large tournament winners prize.

Recently, a new non-profit organization was formed in Nevada named the Poker Player Alliance. This group intends to monitor ongoing legislative efforts in Washington, D.C., and to advocate on its members' behalf.

Sam Gorewitz, the chairman of the board of the new alliance, summed up the group's mission to the Las Vegas Review Journal as follows:

"The game is entrenched in American history. You can go back and find presidents, judges and Americans from all walks of life who play poker. All we're trying to do is to preserve that right."

Although the new alliance's focus is on federal legislation, a key question with regard to the legality of poker has to involve an examination of state law as well. The Poker Player Alliance has stated its intention to compile materials on the various potentially applicable state laws and post them on its website, www.theppa.org. In many states, including Michigan, state officials view poker as a form of illegal gambling, with certain limited exceptions (e.g., casinos and charitable gaming events). Thus, there may be significant implications to those who participate.

Poker is viewed by many to be a game of skill and luck. As a general matter in many states, most games of skill are not viewed to be forms of gambling because they lack the requisite element of "chance." One of the Poker Player Alliance's stated goals is to have poker be classified as a game of "skill" rather than of chance.

As poker continues to grow in popularity, it will be interesting to watch the political winds shift toward greater tolerance. To assure honesty, integrity and legitimacy within this growing industry, the best approach would be for clear legislative guidance on the issue. If the practice is to be allowed, proper licensing systems should be required.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com