this site began in the spring of 2007
UNIVERSITY Interest and Concern
Harvard chooses the best students in the world to come here to learn. We see many of them become intensely interested in playing the game of poker. It behooves us to ask: What is to be learned from playing poker? What is to be feared? Can we mitigate the risks our fears represent?
We have an opportunity to research a magnificent digital data base opened to us by the online poker industry for purposes of research, to go unfettered where the questions lead, not channeled to any pre-determined result.
- How great and how serious are the dangers of addiction? Are there signals of addiction that can be discerned and used to warn those at risk?
- Does Poker encourage alcohol and tabacco abuse?
- Is Poker women-friendly? What is the history and trajectory of female participation in poker?
- Poker is a game of skill. Can we prove it beyond a reasonable doubt? Can measures be developed and empirical work structured relevant to the legal regulation of poker?
- Does poker exploit poor people?
- Is society losing its best minds to professional poker?
- Has anyone improved on Nez Ankeny's bluffing algorithm?
- how democratic is poker? what is the distribution of players in the world by age by amount of stake they start with by race by religion?
- how could we prove that playing poker makes you smarter?
- how many are learning to win, either progressively losing less or progressively winning more
- how many fail to learn and progressively lose more and more over time
- what have people learned who have tried and quit the game?
- should a game played and enjoyed globally online which offers people opportunity to improve intelligence, develop skill, make money, and learn to recognize its metaphors in many parts of life be subjected to prohibitory and regulatory jurisdiction of any one state?
- should those of us with a global interest in poker consider developing a model charter for online poker environments to which governments would be invited and welcome to assent?
my interest is in developing an open poker university of the internet as an expression of what is best in american democracy. poker is a quintessentially american game. It is an extraordinarily constructive and educational game that people the world over find joy and profit in learning how to play and playing well.
Global Poker Strategic Thinking Society
launched in singapore gpsts.org
- prepare a comprehensive exposition and analysis of the legal status of poker
- organize and execute a legal, political and media strategy to legitimate poker, including declaratory judgment actions and legislative initiatives
- assemble, project and administer a curriculum of online and public media educational offerings relating to strategic thinking in poker and its metaphors in life, history, business, politics, international diplomacy, war and peace
- organize and administer a fund to support social science, public health and game theoretic research in poker data and poker player population
- organize intra and inter collegiate poker tournaments for the benefit of education and public service
- organize conference gatherings in a variety of settings to consider issues and opportunities relating to poker
- organize the generation and consolidation of a set of norms to guide behavior in the online poker industry and a process of self governance for continued consideration and affirmation of the norms
- organize a board of directors for these initiatives
On Jul 31, 2008, at 12:28 PM, Art Pfeiffer wrote:
> Hi Charlie, > > Since we spoke 2 weeks ago, I've had a chance to read the Berkman @10 special report and mull things over and would like to now update you on our current thinking regarding ThwartPoker (TP), The Berkman Center (TBC) and GPSTS.
> We first contacted you in May having learned of your interest in poker as a metaphor for strategic thinking some months earlier from your NPR and Colbert interviews. At the time we saw TP as a natural TBC research project for teaching and improving strategic thinking though in our initial email we mentioned GPSTS. When we spoke you indicated that such a project by TBC would, in effect, raise too many red flags within Harvard because of TP's association with poker and therefore gambling. Our conversation then shifted to discussing a possible affiliation with GPSTS to develop curriculum for PokerStrategy.com to use. However, upon reflection we believe that in working with you to help realize your dream of a real poker / game of skill curriculum, we will need to have access to the resources and research environment that TBC can uniquely provide.
> As you know to properly and effectively study and explore the strategic thinking aspects of TP from all relevant perspectives requires a robust pedagogic and research environment. The right infrastructure needs to be in place; one that has the necessary servers, computing equipment, networked software systems and technical expertise and personnel to support such an endeavor. Given the multifaceted nature of such an undertaking, we want to be able to build on a body of experience acquired from other projects and call upon a broad and diverse faculty to impartially direct, manage and participate in all of the varied activities for developing such curriculum. It is also invaluable to have on hand a large number of talented and highly-motivated students who have the time, energy and interest to pursue the truth wherever that might take them. These are some of the reasons we feel that TBC is the appropriate and necessary venue for this study. Also we are not in a position to finance such an undertaking nor to pursue a grant adequate to the task. We believe the same is true for GPSTS. >
> Let me briefly discuss some of the relevant issues. While you've described TP as poker's conceptual complement it is important to keep in mind that it is a very different game on two fundamental levels, functional and legal. First, introducing choice adds a whole new dimension to poker. Choosing your desired cards and blocking your opponents dramatically alter game play. Second, random dealing, the chance component of poker and a necessary element of gambling is replaced by player card-selection to make TP a game of skill..
> Functionally, choice in TP operates two ways. First with player card selection, the card(s) each player receives are based entirely on the interaction of their choices. No outside force beyond their control intervenes. There are TP forms based only on this feature. It allows players to both improve their hands and block others. It has major strategic thinking ramifications that so far have not been explored in any systematic or comprehensive fashion. Second there are also TP forms that combine betting choices (just like regular poker) with player card selection. Choice is the essence of strategic thinking, that is, exercising one's skill and judgment to consistently make the best choice based on the available information at hand either in competitive situations or in concert with others, or in both. We believe it is not so much poker per se but games of skill and choice, especially under time pressure, that can serve as effective tools for teaching and learning strategic thinking,
> Legally, there is a mobile version of TP called Holdem Poker+ (HPP) that awards prizes and charges a $3 monthly subscription. It was released by Verizon in April 2004 and later by Cingular and other major carriers after careful review by their respective legal departments. I believe Arthur Jonath demoed it for you. By the end of 2006 HPP was rated a top 25 mobile game across all categories by research firm M-Metrics. We have merchant accounts for fee-based tournaments on our website that award prizes. In January 2007, PayPal, after an extensive review by its legal department agreed our tournaments were legal and reinstated our merchant account. This occurred months after Congress passed and the President signed into law the Safe Port act with its poorly-conceived UIGEA rider intended to prevent merchant accounts from processing Internet poker transactions. We also have a written legal opinion from I. Nelson Rose that I believe David sent you. All of these events provide a sound basis for presenting TP to TBC as a non-gambling card game in the same vein as Bridge or Hearts.
> I was intrigued by your August 2007 Singapore presentation on You Tube about your experiences teaching CyberOne Law in the Court of Public Opinion utilizing Second Life. I understand that you will be teaching a second course with the same format this fall. I believe this is the perfect venue for presenting, exploring, experimenting with and analyzing various important aspects of TP to develop useful curriculum for teaching and improving strategic thinking. One approach would be to structure a mock trial course extended to Second life around key TP legal issues such as whether or not TP is a game of skill and as such does not violate federal gambling law and that of most states. Other study topics could include some interesting TP patent issues. Within such a framework various TP forms would be examined and experimented with to determine how strategic thinking is employed and how it relates to TP being a game of skill (Playing TP is perhaps the best measure of its skill-based nature in line with the Kentucky court case Mark Twain wrote about in his 1870 article entitled "Science vs. Luck"). This research would serve as the basis for developing appropriate curriculum. There are also game theory and AI aspects of TP that are worthy of interdisciplinary academic enquiry. A possible class assignment could research significant historical events that resulted from major game theory acts such as the Cuban Missile Crisis and analyze their poker-like vs TP-like attributes.
> Charlie, I have only touched lightly on some of the germane issues. There is much more to discuss. We are very excited at the prospect of working with you on such a fascinating project that we believe both of us agree would produce far-reaching useful results. Please consider my comments above as one starting point in an ongoing dialogue. I look forward to more extensive discussions between us to properly and fully explore these matters.
> Art > > Arthur Pfeiffer | President
7/8/08 - Harvard / TPI Licensing Issues
1. Harvardâs Objectives:
2. TPIâs Objectives: To help Harvard explore and determine the benefits of using thwartpoker (TP) as an effective educational tool to improve critical thinking and decision-making in many real-life situations. To use the results of this undertaking and study to improve our business model.
- a. Initial system(s)
- i. Single player â current limited deck link
- ii. Multiplayer â current TPI website (full deck)
- i. Single player â current limited deck link
- b. What support does Harvard provide?
- i. Coordinator
- ii. Engineering
- 1. Own server
- 2. Client / Server infrastructure
- 1. Own server
- iii. Development
- iv. Testing
- i. Coordinator
- c. What support does TPI provide?
- i. Coordinator
- ii. Engineering
- iii. Development
- iv. Testing
- i. Coordinator
- d. TPI website
- i. As is
- ii. Special link
- i. As is
- e. Harvard website
- i. System transfer
- ii. Security - obfuscation
- iii. Coordinate with TPI
- i. System transfer
4. Harvard Activities
- a. Students play existing forms to determine how interesting they find TP. Responses are recorded in some written form. Prepare questionnaire.
- b. Research projects:
- i. Explore new and different forms.
- ii. Develop more sophisticated AI.
- iii. Determine how TP improves critical thinking skills.
- iv. Determine how TP improves regular poker playing skills.
- i. Explore new and different forms.
- c. Course Curriculum
- d. Testing Procedures
- e. Internal tournaments
5. License Constraints
- a. Who can use it?
- b. Restricted to Harvard students and faculty
- c. Only available free?
- d. No cash or gift certificate prizes without TPI written approval.
6. Harvard Benefits
- a. Free license
- b. Access to ongoing TPI engineering and developments
- c. Access to TPI expertise and consultation
7. TPI Benefits
- a. Opportunity to contribute to course curriculum
- b. Access to course, study and test results
- c. Access to any Harvard engineering and development changes
- d. Harvardâs imprimatur
8. Availability Schedule
9. Davidâs Role?
thwartpoker legal opinion
May 4, 2006
Arthur Pfeiffer ThwartPoker Inc. 525 Lincoln Avenue Palo Alto, CA 94301
NOTE - This Legal Opinion is not complete without the attached Statement of Limitation and Biography.
Is a skill contest legal in general under United States federal law and in general under the applicable laws of the various states of the United States, where players pay entry fees contending for valuable prizes playing ThwartPoker, a cardgame where players select their own cards competing to obtain the best poker hand?
It is universally accepted that gambling must have three elements: chance, prize and consideration. A skill contest which awards valuable awards and charges players entry fees, clearly has the elements of prize and consideration. The contest does not have the element of chance, under federal law and most state anti-gambling laws, because it is a game of skill. The operator of an Internet or landbased site that offers only contests of skill is, by definition, not involved in gambling.
The governments of the various states do have the power to regulate or even prohibit skill contests, specific games such as poker, or games played with cards or dice. Examples of laws that restrict skill games include statutes that limit contests of skill to small prizes or require that the prizes awarded not be created out of contestantsâ entry fees. It is possible statutes such as these, which would make the offering of these skill contests illegal, violate the United States Constitution; however, care must be taken to not violate these state restrictions unless they have been declared invalid by a court.
I. Factual Assumptions
ThwartPoker (TP) is a class of games. The following discussion focuses on one of these games called Holdâem Blitz (HB). However the basic principles embodied in HB equally apply to all TP games.
The only similarity between TP and poker is that TP uses the standard ranking of poker hands to determine which player has obtained the winning hand. Though it follows the hands scoring rules of poker, there is the fundamental and crucial difference that player card selection replaces random dealing in determining what card a player is dealt. HB, for example, consists first of three community cards being randomly dealt face up followed by four rounds of player card selection. Each player can use one or more of these community cards in building their best hand. These community cards, while randomly dealt, give no player an advantage over any other player since they are:
1) dealt first face up, 2) equally known and 3) available to all on an equal basis.
Each subsequent round then involves each player first privately selecting a card. In doing so, a player can pick any card (except the community cards) from a standard deck that is displayed with all 52 cards face up. Once everyone has made their selection, a card is then dealt to each player based on the following simple rules:
1) A player is dealt a null/blocked card if they select a card that is the same as one selected by another player on either the same round or on a previous round. 2) A null/blocked card has no value. 3) Otherwise, they are dealt their selected card. 4) The collective interaction of each playerâs card selection decision fully determines what card each player is dealt.
Only discernible human intention and cause determine the outcome with no unpredictable outside force entering the picture.
There are two types of tournaments; multiplayer and single player. In multiplayer tournaments human players directly compete against each other. Multiplayer tournaments involve a game of TP, such as HB, as described above. In single player tournaments, each human player is at a different table competing against a similar set of virtual players. The human player with the highest score at the end of the tournament is the winner.
In single player tournaments ThwartPoker Inc.âs (TPIâs) tournament management software maintains a level playing field when each human player competes against the same number of virtual players (VPs). TPIâs tournament management software insures that when two human players are faced with identical situations and both do the same thing by either selecting the same card or betting the same number of points or play money, their corresponding VPs respond identically. Thus no human player is given an advantage over any other human player due to chance.
The actions of each VP in a TP games such as HB are also independent and not random. For each VP, the algorithms that determine action (either card or bet selection) analyze that VP's own hand compared to the visible actions of each of the other players to make the best decision at each turn. These algorithms "simulate" the decision making process of a human player. This analysis makes no distinction between human players and Vps.
For both single and multiplayer tournaments, the card games played at each table proceed as normal with all players playing to the very best of their ability. In any round each player either chooses the best card for his/her hand or chooses a card to try to block an opponent. Skill and good judgment is called upon both to decide whether to play offensively or defensively and in choosing the best card under the circumstances. Furthermore, the âbest cardâ decision may involve weighing when an opponent might try to block and deciding what card that opponent would choose. The card games played at each table proceed as normal with all players playing to the very best of their ability. Players win or lose depending on the cards they chose and those chosen by the other players at their table. There is no chance of the cards favoring one player over another at a table. This principle applies equally to forms of TP other than HB that do not have community cards.
The contest prizes are composed of the contest entry fees, where that is allowed, or by predetermined set amounts, where the law requires that prize structure. The operator of the skill contests will receive a fee from each player, which may, for convenience, be a portion of the entry fees.
It is also assumed that all companies, individuals and operations are in complete compliance with all applicable laws concerning licensing, taxation, record-keeping, use of otherâs names and likenesses, truthfulness of statements, use of intellectual property and the manner in which the games are played.
II. Legal Analysis
The gambling laws of the United States are a confusing, conflicting, and often over-lapping hodgepodge of usually outdated statutes, regulations, Attorney General Opinions and cases. A major reason for this is the tendency of legislatures to react to a particular crisis facing them at the time, such as the Louisiana Lottery scandal of the 1890s, and then to leave the laws on the books. Politicians do not usually win votes by acting to remove restrictions on gambling.
In addition, governments have the right to regulate non-gambling activities, if there is a danger to the health, safety, welfare or morals of their citizens. This is known as a stateâs âpolice power.â Gambling, whether legal or illegal, falls within the police power. Governments have begun using their police power to regulate contests of skill, to ensure that the contests are fair and that prizes are actually awarded to winners.
In general we are dealing with criminal statutes, which, although they carry penal penalties, have the advantage of requiring strict construction. The criminal law of the federal government and virtually every state require that there be a specific statute outlawing an activity before the activity can be deemed criminal. There are no common law crimes, only the legislature can declare an activity illegal; a judge cannot decide for himself whether an activity is criminal. This means that an activity is legal unless it fits into an existing criminal prohibition. The prohibitions on gambling often date back to the 19th century and simply did not anticipate the changes wrought by modern technology. There are very few laws on the books that specifically mention the Internet.
B. Definition Of Gambling
Gambling has been universally defined as having three elements: a prize, consideration and an outcome determined by chance.
The elements of gambling are consideration, a result determined by chance rather than skill, and a reward or prize; or, in other words, payment of a price for a chance to gain a prize. In addition, under a statute that prohibits gambling for profit, "for profit" is a necessary element of the offense.
38 Am.Jur. Gambling Â§2.
If any one of these three elements is missing the activity is not gambling, though it still might be subject to government regulations.
C. Chance v. Skill
Even if a game costs a player money to enter and therefore has "consideration," and the winner will receive a thing of value, a "prize," the contest is technically not gambling if skill predominates over luck in determining the winner. The test is stated in different ways by different courts. At a minimum, the outcome must be determined by chance for a game to be gambling.
A game has been defined as a "contest for success or superiority in a trial of chance, skill, or endurance." When used in connection with gambling, a game is anything that is used as a means of playing for money or other stakes, with the result depending more on chance than on skill.
19 AM.JUR.POF 647.
[W]e construed the phrase "the award of which is determined by chance, even though accompanied by some skill," an element in the definition of lottery, see Â§945.01(5)(a), Stats., to mean that "[c]hance ... rather than skill must ... be the dominant factor controlling the award...."
State v. Hahn, 221 Wis.2d 670, 679, 586 N.W.2d 5, 10 (1998).
See also Hotel Employees and Restaurant Employees International Union v. Davis, 21 Cal.4th 585, 981 P.2d 990, 88 Cal.Rptr.2d 56 (1999), where the California Supreme Court cited GAMBLING AND THE LAW (1986), written by the author of this Legal Opinion.
It is important to note that there is no âhouseâ and that no individual can place a wager on a contest between two other players. As the official commentator to the New York anti-gambling laws put it:
"Gambling" is not defined purely in terms of betting or risking something of value upon a contest of chance. The point may be illustrated by considering a chess game between A and B, with A and B betting against each other and X and Y making a side bet. Despite the character of the game itself as one of pure skill, X and Y are "gambling" because, from their standpoints, the outcome depends upon "chance" in the sense that neither has any control or influence over it. The same is not true of A and B, who are pitting their skills against each other; they, therefore, are not "gambling." It is this feature that requires a definition of "gambling" to embrace not only a person who wagers or stakes something upon a game of chance but also one who wagers on "a future contingent event [whether involving chance or skill] not under his control or influence."
William C. Donnino, Practice Commentary McKinney's Penal Law Ch. 40, Pt. 3, T. M, Art. 225, Refs & Annos. (1999).
The amount of luck or skill involved in any game has always been important in determining whether or not the game is a form of gambling. Some courts have gone further and looked at the amount of skill and luck to determine whether the game was a lottery. The contests in question appear to be contests of skill.
For the purposes of this Legal Opinion it is not necessary to analyze the difference the law sometimes makes between gambling games that are predominant games of chance as opposed to gambling games that are entirely chance, except to note that in some jurisdictions, including federal law, laws prohibiting lotteries only apply to games in which no skill at all is present. "Gambling schemes where winning depends on skill or judgment are not like a lottery in which success is determined by pure chance and is thus specially attractive to the inexperienced and the ignorant." Boasberg v. United States, 60 F.2d 185, 186 (5th Cir. 1932); Annotation, Offenses Against the Mails: What is a Lottery or Similar Scheme, 96 L.Ed. 312, 314 (1952). In those âpure chance = lotteryâ jurisdictions, the skill contests would not be barred by any prohibition on âlotteries.â This is important because federal statutes are often limited to âlotteriesâ rather than all forms of gambling. See, e.g. 18 U.S.C. Â§1304; Applicability of Lottery Statutes to Contests and Sales Promotions, 18 F.C.C.2d 52 (1969). Under federal law as it now exists, any significant amount of skill takes the game out of the category of "lottery." Many statutes do not prohibit all forms of gambling; by their own wording they are limited to lotteries and thus would not apply even to the underlying games, let alone to the skill contests.
No federal statute or regulation explicitly prohibits Americans from playing games of any type. Congress has very little interest in gambling, whether legal or illegal, so there are relatively few federal statutes dealing with gambling of any type. Congress has passed laws to attack organized crime, which make it a federal crime for a business to be involved in gambling, under some circumstances. The federal anti-gambling statutes and regulations would not apply to contests of skill that are not gambling. The Wire Act, 18 U.S.C. Â§1084, for example, applies only to persons who are in the âbusiness of betting or wagering.â Because the contests are games of skill, the operator is not in the âbusiness of betting or wagering.â The same would apply to the Travel Act, 18 U.S.C. Â§1952, which makes it a federal crime to conduct a business that is violating the gambling laws of a state. The Organized Crime Control Act, 18 U.S.C. Â§1955, similarly outlaws large âillegal gambling businesses.â
States are free, within the limits of the United States Constitution, to determine for themselves how they want to regulate or even prohibit games of skill, chance or mixed skill and chance. Games that are predominantly skill almost never fall under statutes aimed at gambling. Specifically, entry fees for contests of skill are rarely considered making bets for gambling under state laws. A case involving a contest which was not even predominantly skill contains typical language:
With respect to [one Defendant], its "Presidential Skill Contest" requires listing presidents in order of date of service, answering an essay question, and a "wordfind." In order to qualify as a contest under the statute, the game must require some combination of skill and chance, but skill need not dominate the game. See Cal.Bus. & Prof.Code Â§17539.3(e). In considering whether a game requires skill, the court looks to whether the players "exercise some control over the outcome." [This] game requires skill. The rules explain how entries are judged and players can improve their responses and, thus, their chances of winning. These contests include both skill and consideration and are not, therefore, illegal lotteries. Plaintiff's claim that [this] skill contest is an illegal lottery is dismissed.
Haskell v. Time, Inc., 857 F.Supp. 1392, 1404 (E.D. Calif. 1994).
Even if there is a prohibition on betting on games of skill, these laws often exempt the actual participants. In practice, law enforcement is not concerned with legitimate contests of skill, where the participants have to pay an entry fee, and no one is allowed to place a bet on another person.
It would take a detailed examination of each stateâs statutes, regulations, case law and attorney general opinions to ensure that any particular manner of operating a game of skill was not in technical violation of a stateâs laws. Nevada, for example, was the first state to explicitly outlaw Internet gambling. NRS Â§Â§465.091-465.094. Naturally, Nevadaâs own licensed casinos and race and sports books are exempt. The statute makes it illegal to accept a wager from a person physically in Nevada. âWagerâ is defined separately as âa sum of money or representative of value that is risked on an occurrence for which the outcome is uncertain.â NRS 463.0192. This does not mean that contests of skill cannot be conducted on the Internet with participants from Nevada. The Nevada Supreme Court held in Las Vegas Hacienda, Inc. v. Gibson, 77 Nev. 25, 359 P.2d 85 (1961), that a âwagerâ does not include an entry fee paid by a participant in a contest, where the prize must be given by the operator of the contest if a participant meets the contestâs requirements. In that particular case, the owner of a golf course offered to pay $5,000 to any person who, having paid 50 cents for the opportunity to do so, shot a hole in one. The Court held that was a contest of skill that was legal, because the prize was not created out of entry fees. So in states like Nevada, the contest winner would have to receive an award of a fixed amount, announced in advance. See also 2003 WL 22050876 (S. Carolina A.G. Aug. 29, 2003).
Any state law which would completely prohibit all games of skill, and therefore the contests under discussion here, may be unconstitutional. The Commerce Clause of the United States Constitution has been construed by the United States Supreme Court as barring states from interfering with interstate and international commerce under certain circumstances. This constitutional barrier to a state attempting to infringe on commerce from other states and foreign nations is known as the Dormant Commerce Clause. Dormant Commerce Clause jurisprudence forbids individual states from regulating within their borders commerce that is essentially national or international in character in such a way as to "burden" interstate or international commerce. Michael P. Kailus, Note, Do Not Bet on Unilateral Prohibition of Internet Gambling to Eliminate Cyber-Casinos, 1999 U.Ill.L.R. 1045, 1076 (1999). Applying state law to Internet games risks the Internet activities being subjected to conflicting laws, imposed by different states with different priorities. A related concern is the risk that a tiny, conservative state or country, or even county or city, could effectively impose its standards of morality on the rest of the planet.
A few states have begun regulating contest of skill, to ensure the games give fair notice, are not rigged and the winner is paid. California, for example, has detailed requirements for skill contests, focusing mainly on giving adequate notice to all participants. Calif. Bus. & Prof. Â§Â§17539-17539.3. The operators of the contests should have no trouble meeting these requirements. It must be noted, however, that the requirements must be met or the operators would be violating this law, even though the contest is not gambling.
In response to an Arizona Supreme Court case, holding a word contest was a game of skill and entry fees were not gambling, the Arizona Legislature enacted a statute which limits the size of prizes that may be awarded in skill contests. A game is legal as âamusement gamblingâ if, among other requirements:
(a) The player or players actively participate in the game...
(b) The outcome is not in the control to any material degree of any person other than the player or players.
(c) The prizes are not offered as a lure to separate the player or players from their money.
(d) Any of the following: .... (iv) Skill and not chance is clearly the predominant factor in the game and the odds of winning the game based upon chance cannot be altered, provided the game complies with any licensing or regulatory requirements by the jurisdiction in which it is operated, no benefit for a single win is given to the player or players other than a merchandise prize which has a wholesale fair market value of less than four (4) dollars or coupons which are redeemable only at the place of play and only for a merchandise prize which has a fair market value of less than four (4) dollars and, regardless of the number of wins, no aggregate of coupons may be redeemed for a merchandise prize with a wholesale fair market value of greater than thirty five (35) dollars.
ARS Â§13 3301 (2005, originally enacted March 15, 2000, in response to State v. American Holiday Ass'n, Inc., 151 Ariz. 312, 727 P.2d 807 (1986)). It should be noted that the statuteâs limit of a wholesale value of $35 means prizes worth $70 or more may be awarded, because the markup from wholesale to retail is usually at least 100%. The contest must award no more than $70 to anyone playing from Arizona or bar players from that state.
D. Tests for Skill
In practice, a court's determination of what is a game of skill often depends on the individual judge hearing the case. If a court wants to find something is a game of skill it can look to how skillful players prevail over non-skillful ones, in the long run. If, however, the court wants to declare the exact same game one of chance it will look only at the very short run, where even a novice might beat an expert due to chance results.
It is impossible to completely eliminate all chance factors. Even with chess, a player may have a headcold. But because the contest consists of competitions among players choosing the cards themselves, the most important chance factor of card games, the randomness of the distribution of the cards themselves, has been eliminated. Even the most lucky unskilled player will find it difficult to beat the most unlucky skilled player.
The courts have laid down many different tests for determining whether a game is predominantly a game of skill. In brief, they will look for the following:
1) A skillful player will win more than an unskillful one. State v. Randall, 256 P. 393, 394 (Or. 1927). As described above this is true for any TP game.
2) Skill can be learned from experience, from real or mock play. Play improves with experience. All the experience in the world cannot help a slot machine or lottery player. But players playing any TP game will learn strategies that will improve their play.
3) Skill games require a knowledge of mathematics. This is particularly true of games played with cards and dice, but applies to almost all other games. The major chance element of card games, the random distribution of the cards, has been eliminated by the contests, because all cards individually dealt to contestants are based only on the cards they have chosen. However, knowledge of the mathematics of how poker hands can be created and how players can play their cards, will help the skilled player win more than the unskilled one.
4) Skill games require psychological skill. This is most obvious in games involving play against other players in person. But any game where players play against other human beings who can make various decisions on how to play allows for some psychological skill. For example, TP tournaments allow players to determine how another player typically plays his hand.
5) Player participation changes the result. It is difficult to imagine a game where individual participation affects the outcome of the game more than TP.
6) Skill can be learned from reading. In determining that the card game of bridge was a game of skill and not a game of chance the Supreme Court of California pointed to the large body of books and periodicals discussing strategy for playing the game. "The existence of such a large amount of literature designed to increase the player's skill is a persuasive indication that bridge is not predominantly a game of chance." In re Allen, 27 Cal.Rptr. 168, 53 Cal.2d 5, 377 P.2d 280 (1962). Although there are no books, yet, on how to win at TP, there are many published works on game theory and, of course, on the mathematics of poker.
7) The opinion of the community. Common sense tells us that some games require skill. Someone who knows virtually nothing about the game might be willing to buy lottery tickets every day for a year, and no one would criticize him for his poor plays. But we would all think that same person was crazy if he took an identical amount of money and without knowing the game played against a professional poker player. An amateur can buy a lottery ticket, and might even win. But the amateur will lose, even in the short run, against an experienced and knowledgeable TP player.
The prohibitions on gambling that are on the books do not apply to these contests because they do not prohibit participants from paying a fee to enter contests of skill. This contest of games is, in general, legal under United States federal law and in general under the applicable laws of the various states of the United States. The contest operators must take care to comply with the laws of those few states which put restrictions on contests of skill and not to offer the game in those few states where it would be prohibited.
TP resembles poker only in the most superficial way, through the ranking of hands. There are many games, such as video poker and poker solitaire, that use poker hand rankings but would never be called poker. TP differs from poker in two fundamental respects. First, it eliminates the most important characteristic of poker related to chance, i.e., the random distribution of cards. Second, by players choosing their cards, the cards dealt to each player are based solely on the collective interaction of each playerâs decision-making skill in balancing building his best hand and trying to prevent opponents from doing the same.
TP is not only a game of skill, but it is doubtful that it would be a form of âpokerâ under laws that prohibit or regulate poker.
Prof. I. Nelson Rose
STATEMENT OF LIMITATION AND BIOGRAPHY This Opinion is a legal analysis based on the state of the law and the information available as of this date. It is limited to the specific question asked and the specific set of assumed facts given in the Opinion and is limited to a general review of U.S. federal law and state laws. It is not meant to cover any specific federal law, nor any specific state law, or apply to any other set of facts. The views expressed herein are entirely those of the author, Professor I. Nelson Rose.
This Opinion may only be relied upon by Arthur Pfeiffer and ThwartPoker Inc., and may not be provided to or relied upon by any other person, or quoted from, or reproduced in whole or in part without the prior written permission of the author, Professor I. Nelson Rose. Permission is given Arthur Pfeiffer and ThwartPoker Inc., to quote or present the Opinion to prospective investors, governments, licensing partners, merchant account providers, advertisers and other suppliers.
Professor Rose is an internationally known scholar, public speaker and writer and is recognized as one of the worldâs leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.
Professor Rose, has written more than 1,000 published works, including his internationally syndicated column and landmark 1986 book, "Gambling and the LawÂ®." He coauthored the first casebook on gaming law, GAMING LAW: CASES AND MATERIALS (Matthew Bender 2003) and INTERNET GAMING LAW (Mary Ann Liebert Publishers 2005).
A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, including the first NAFTA tribunal on gaming issues, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada, Mexico and the United States.
Prof. Rose has addressed such diverse groups as the National Conference of State Legislatures, Congress of State Lotteries of Europe and the National Academy of Sciences. He has taught classes on gaming law to the F.B.I., in Slovenia, China and Spain, and as a Visiting Scholar for the University of Nevada-Reno's Institute for the Study of Gambling and Commercial Gaming. Prof. Rose has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, Canada, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic. Additional background on Professor Rose is available on his website: www.GAMBLINGANDTHELAW.com.
Op-Ed for Kentucky State Journal (Frankfort, KY)
By Charles Nesson
Professor at Harvard Law School
Part of the revolution that the internet brought to the 21st century was its ability to break down geographic barriers. Part of the challenge associated with that opportunity is that our legal infrastructure is vastly unprepared to deal with the change.
The recent attempt to block internet gaming sites in Kentucky in order to shield competition from detracting dollars from gambling at horse tracks and bingo halls is not only practically impossible, but also legally unstable. One of the most interesting parts of this move is that while parts of these sites may be considered unlawful under Kentucky law, a significant factual question exists as to the legal status of skill-based poker sites. The hearing this Tuesday morning aims to answer questions on jurisdiction, what would be some of the ramifications should the state succeed in this order, and whether domain names fit the Kentucky statutorily definition of a gambling device.
The legal test in most states is simple but ambiguous: a game is considered to be a skill game if skill predominates over chance in determining the outcome of the game. The federal government has long recognized that poker players are engaged in a âtrade or businessâ and, for tax purposes, their income is âearned income.â Moreover, the betting portion of poker contains all the elements associated with skill because it can be learned through experience or by instruction. Kentucky law currently allows for a state lottery and gambling at horse tracks and bingo halls. Legal analysis reveals that the same statutes should be interpreted to include poker since it is predominantly a game of skill, not an illegal game of chance.
On a macro level, it is not insignificant that poker is a great American pastime with a strong heritage in Kentucky. For more than two centuries, it has been the game of choice for both wall street and main street, and it has become a positive ambassador of American culture worldwide over the last few decades. And simply because the game has moved from kitchen tables to computer tables does not make it unlawful.
Because of Kentuckyâs recent attempt to seize online gambling domain names, online poker has become a key issue in the ongoing battle for internet freedom. Moreover, the censorship and inconsistencies of attacking online casinos while permitting online wagering on horses and lotteries is deeply hypocritical. Itâs also fundamentally illegal.
On a global scale, attempts by any state or federal government to prevent its citizens from accessing certain material has a profound effect on every internet user across the globe. In a sweeping victory for free speech rights in cyberspace, the Supreme Court struck down the Communications Decency Act in Reno v. ACLU in 1997 and granted the highest level of First Amendment protection to the Internet. Sustaining the Internetâs open infrastructure here in the United States depends on opposing the censorship that plagues the internet from being an open forum for information and communication in communist countries like China.
That is why Tuesdayâs hearing has far reaching implications to not only the gaming community, but also the champions for internet freedom, censorship opponents, and legislative and judicial communities. With about 70 million Americans and 100 million others with a vested interest in the game, itâs sure to be a full house.
- foucault -an excellent write-up of our meeting on 2+2, the leading poker discussion site
- Chuck Humphry: Is Poker a Game of Skill?
- United States v. Marder (1st Cir., 1995)
- Commonwealth v. Lake, 317 Mass. 264; 57 N.E.2d 923 (1944)
- Commonwealth v. Plissner, 295 Mass. 457, 463-64 (1936)
- student comment on these cases
- Mark Twain: Science vs. Luck
- Bill Dutton: Internet Gambling
- Robert Rogers Web-based Survey
- Drafting of the tender documentation Ukraine
- Massachusetts Attorney General's Advisory on Poker Tournaments
- Antigua - WTO
- Herald Tribune on WTO
- freakonomics on skill v. chance
- UIGEA Intrastate Provision
- The Thinkers: CMU prof using game theory to match kidneys
- Howard Shaffer - Richard LaBrie Gambling Research Briefing
- Barney Frank's Bill
- George Bush is a Poker Player
- Sherlock Holmes, The Final Problem
- Online Poker - Phil Helmuth
- steroid use for poker
- nevada statute criminalizing internet gambling
- washington statute criminalizing internet gambling
- massachusetts proposal to criminalize internet wagering
- H.R. 6870
- TIME poker metaphor contintued
- Internet Skill Game Licensing and Control Act