Poker May Not Be Illegal Gambling According to Federal Court
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Poker May Not Be Illegal Gambling According to Federal Court

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A federal judge in New York has held that Texas Hold ‘Em poker is a game of skill and not illegal gambling under federal law.  This is the first time a federal court has held that poker is not gambling under the Illegal Gambling Business Act (the “IGBA”).

The issue of whether poker is a game of chance or skill has been a hot button issue recently and has received relatively inconsistent treatment from state to state.  The majority of state courts have found that an activity is illegal gambling if a person risks something of value on an activity predominately determined by chance for the opportunity to win something of greater value than he or she risked.

Most federal courts have considered poker to be a game of chance and therefore characterized it as gambling.

In large part, the decision focused on research by an expert statistician and competitive poker player who provided studies of online poker games to prove that despite luck determining what cards players receive, skill is the predominant factor in succeeding.  The information presented suggested that a player’s abilities “permit the best poker players to prevail over the less-skilled players over a series of hands.”

In arriving at its decision the court stated that poker involves an “array of talents.”

So, while the federal court ruling does not overturn state illegal gambling laws, some of which include poker in their statutes or define it as a game of chance (for example, Connecticut, Wisconsin, Arkansas and Florida), it may have a significant impact on the treatment of poker under United States law.

Despite the fact that the government intends to appeal the decision, the ruling should go a long way toward assisting marketers that conduct skill-based promotions.

Consult with an advertising, marketing and promotions law attorney for guidance regarding games and contests under state lottery laws to ensure that they are genuinely skill-based.

Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.

Written by Richard Newman

Richard Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising, intellectual property and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state attorneys general, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.

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