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POKER SKILL ARGUMENT FALLS ON ITS FACE AGAIN

Poker
By Wendeen H. Eolis
Poker Player Newspaper
December 4, 2012

After two years of silence in the case of the Town of Mount Pleasant v. Chimento, the South Carolina Supreme Court finally reached a decision. On November 21, 2012, the Court found a group of poker players (who had convened regularly in an un-raked low stakes home-game) as violating South Carolina law.

S.C. Supreme Court Reaches Clever Ruling

The state’s highest court reinstated the trial court’s convictions of the players. The State’s intermediate Appellate Court had reversed the trial court—in one of the most notable cases of its kind for its favorable disposition toward poker as a game exempt from anti-gambling laws because of the predominance of skill applied.

The player-host in the instant case took no rake—only a modest contribution from the players to cover the cost for the festivities. The game occurred on a regular basis. The two-pronged nub of the problem seems to reside in “recruitment of players,” from Internet-based advertisements (promotion of gambling) and payment required for the privilege to play.

The more critical issue, however, is the cleverness of the South Carolina State Supreme Court in skirting its own factual conclusion that skill predominates over chance. Instead, it determines that South Carolina’s statute, which applies to any “house used for gaming” applies without regard to the level of skill that may be involved.

Judge Weinstein’s Decision in NY —Not So Peachy Either

This latter point is eerily similar to language that was little noticed in another recent case lauded by the poker community for the decision by federal Judge Jack Weinstein, which supports poker as a game of skill. In U.S. v DiCristina, a Staten Island game runner got off the hook. Judge Weinstein threw out the case against the defendant after reaching the conclusion he had not violated the federally based Illegal Gambling Business Act under which the case had been brought into federal court.

But, the jurist made abundantly clear, in his 100 plus page decision, which acknowledges erudite studies by academicians supporting poker as a game of skill, that the defendant would face a very different scenario had the case been brought in a state Court.  According to several gaming lawyers, the penal code in the Empire State of New York has established that gambling may be determined under the law by the existence of a “material element of chance.”

Thus the preponderance of evidence, now readily available to law enforcement authorities and the judiciary, with respect to the merit of treating poker as a game  predominantly based in skill  (and therefore properly exempted under anti-gambling statutes), now seems to be treated as nearly  irrelevant.

South Carolina seems to have adopted the provincial position of New York by treating poker as a gambling game without serious respect or consideration to its modern evolution as a bona fide professional endeavor.

Working Backwards

In the South Carolina case, the Court pretty clearly revealed itself as more concerned with finding a means to get to the result it wanted, than to justice,” said one nationally recognized white collar specialist from an AmLaw 100 law firm. This has become clear from  analyses that have recently proliferated throughout the brotherhood of gaming lawyers across the country.

The proceedings in the South Carolina Court system first discouraged, then teased, and ultimately disappointed lawyers who saw in the case an ideal opportunity to move the needle in favor of poker as a game of skill, that should be exempt from prosecution as a gambling crime. In reviewing the analysis made by one notable gaming expert (he is also a former judge), things shape up as follows:

A player’s home had become a “house used as a place of gaming.” But the Court does not explain why the player’s residence qualified as a “house used as a place of gaming.”|
The opinion explicitly states that a friendly Friday night poker game in one’s residence would not be unlawful, but the Court then treats the game in question that was raided as a game in which “gambling was promoted“ with ads over the Internet to join the festivities.
The opinion also states that betting on any game – regardless of whether it is one of skill or chance – is unlawful gaming under South Carolina law. This is a substantial change from a long-standing principle of law.
Justice Pleicones, writing for the majority ruling on the final appeal within the state refused to consider Respondents’ vagueness challenge regarding the law, on the basis that “one whose conduct clearly falls within the statutory proscription does not have standing to raise a void for vagueness challenge.”
The argument that the Respondents did not have standing to challenge a statute as unconstitutionally vague because the Respondents “clearly fell within it” and therefore did not have standing was an argument never made or argued by the State. The S.C. Supreme Court violated its own rules (as one of the justice’s acknowledges in a dissenting opinion) by relying on this principle.
The Chief Justice concurred in the judgment, even though she agreed with the dissent that the statute used by the majority of the Court to reaffirm the original trial court’s decision (§16-19-40) is unconstitutionally vague, apparently because she also agreed with the majority position that the respondents lacked standing. She then challenges the General Assembly to fix it.The law firm of Goldstein and Russell has also weighed in, with similar analysis: “It’s plain that the Supreme Court does not disturb the factual conclusion that skill predominates over chance. It instead concludes that South Carolina’s statute, which applies to any ‘house used for gaming’ applies to any game, regardless of the level of skill involved.”  Founding partner Tom Goldstein, a widely known gaming law expert, has done substantial legal work for Poker Stars and the Poker Players Alliance which was reportedly funded for its involvement in the South Carolina case by PokerStars.

Mike Sexton: The Right Man For the Job

The South Carolina decision gets less respect from the professional poker community.  At trial, the poker world was represented by WPT commentator and Party Poker Ambassador Mike Sexton as an expert witness. His selection came with approval by Isai Scheinberg of Poker Stars.

PokerStars pro and World Series of Poker Champion Greg Raymer as well as other high profile poker playing lawyers were considered for the gig, but Scheinberg followed the advice of lawyers involved in the case who saw Sexton as the ideal expert, notwithstanding his affiliation with another online poker site.

Indeed, by all accounts, Sexton provided, in clear language, facts obvious to any regular player; it doesn’t take long to separate the wheat from the chaff (regardless of gender) at the poker table. And, while the trial court found the defendants guilty, the decision was reversed at the Appellate Court before being reaffirmed at the Supreme Court of South Carolina. The case began with the player arrests in 2006; it took more than two years from the date the latest appeal was made   to the S.C. Supreme Court to get to a publicly reported decision last month.

Black Friday Cases Affected by Delay in S.C. Decision?

The S.C. case was viewed as an important opportunity to forward the skill argument as part of the defense in the US Department of Justice’s indictment and companion forfeiture cases against online poker sites and their key executives in the April 15, 2011 “Black Friday” cases. The skill issue was argued in front of Judge Lewis Kaplan as part of the Chad Elie pre-trial proceedings prior to the time the South Carolina Supreme Court rendered its adverse decision. The notion that poker should be exempt from prosecution of anti-gambling statutes and regulations got no traction in his courtroom. Some lawyers queried for this article question whether Judge Kaplan would have looked to a favorable decision in S.C. state court for guidance.

Lawyers have carried on a lively dialog among themselves over the past month concerning the two recent cases in South Carolina and New York, respectively. The consensus is that both cases have moved the needle among jurists as to the need to modernize legislation regarding poker as a gambling game.