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You're Off the Hook — Poker is No Longer Gambling

24 August 2012 in Trading Ideas

Good news for the better poker players of the world: It is a game of skill, after all.

Just ask federal court judge Jack Weinstein, who recently threw out a conviction against a man running a poker room in Staten Island, New York on the grounds that poker, under federal law, can’t be considered gambling.

As a recent Dealbreaker post noted, gamblers – poker players, that is — shouldn’t read this ruling too widely. As the court said, its judgment specifically considered poker under federal law, and the judge’s opinion declared that its decision “does not undermine the holding that poker is gambling as defined by New York law.”

That means that the Staten Island defendant isn’t necessarily out of the woods – he could be charged in state court. It also means that potential poker-room entrepreneurs in, say, Des Moines, Iowa don’t have the green light to open for business just because of the ruling of one federal judge in New York.

But the court’s ruling is nonetheless interesting for the reams of defense evidence – enough of it presumably swaying the judge – that showed consistent outperformance by better poker players, meaning those with more skill win more often. 

The prosecution maintained that one could invent the same sort of outperformance by coin-flippers, but the judge was convinced by a defense expert witness’ study that showed the top tier of poker players are able to independently replicate their success in a way that coin-flippers can’t.

Dealbreaker points out that the ruling is unlikely to dissuade further federal crackdowns on online gambling, but on the other hand, the interest by states in legalizing additional forms of gambling is also unlikely to fade.

New Jersey, for example, is in the middle of a fight with the federal government, colleges and professional sports leagues over a plan to legalize sports gambling by the end of the year.

It remains to be decided whether betting on the Jets is convincing evidence of no skill whatsoever.



Tags: gambling, poker