Last week, the U.S. Second Circuit Court of Appeals heard oral arguments in a case that centers on whether poker should be considered a game of skill and/or gambling. Lawrence DiCristina is the main character in our story. He hosted poker games out of his warehouse in Brooklyn, New York and was ultimately picked up on charges that included violating the Illegal Gambling Business Act, or IGBA.

Last August, United States District Judge Jack Weinstein ruled that poker did not qualify as gambling under IGBA “because poker is predominantly a game of skill rather than chance.” The Department of Justice appealed the ruling, which led to last week’s arguments in front of the Second Court of Appeals.

In attendance during the most recent hearing was Poker Players AllianceLitigation Support Director Patrick Fleming, who is known on the PocketFives boards as Skallagrim. In an exclusive interview with PocketFives, Fleming gave his take on how the proceeding went: “The hearing went as well as we could expect this type of hearing to go. I thought the lawyer representing DiCristina was well prepared. The judges’ questions were very to the point and showed they had done research on this case and the legal issues behind it. It’s hard to read in terms of what will come down the road.”

The skill game decision was landmark when it was originally released last year. Not only could poker potentially fall outside of IGBA, but it could also be separated for good from traditional casino games like blackjack and craps, where the action is player versus house, not player versus player. This kind of logic is the engine behind many poker-only bills that have surfaced on Capitol Hill.

As Fleming (pictured) explained, “This case is partly about continuing to advance poker as a game of skill, distinct from the other casino and gambling games you play against the house. We at the PPA want people to realize that poker is different.”

You’ll recall that former Full Tilt front man Howard Lederer attempted to invoke the DiCristina case in his discussions with the DOJ.

Poker being recognized as a skill game could advance the prospects of poker-only legislation on Capitol Hill. Fleming remarked, “This is about continuing to get legislators to pay attention. IGBA is really the key Federal statute in terms of trying to prosecute online poker providers. It’s still the major statute used in various cases we have seen. If we can establish that IGBA doesn’t apply to poker, then we’ve taken away a vast weapon the DOJ has to attack poker.”

We asked Fleming how IGBA has been applied in the past. What does the statute require in order to be invoked and how does poker fit in? Fleming noted, “First, it requires a violation of state law. The second part, which is where the dispute lies, is whether all that’s required is a violation of state law or whether there has to be a definition of gambling itself. We want to limit its applicability to casino games of chance and not poker.”

As Fleming wrote on Two Plus Two when discussing the Government’s appeal of the case, “In their appeal, it is interesting to note that they do not directly challenge Judge Weinstein’s finding of fact that poker is a game in which skill predominates. Instead, they argue that such a fact does not matter because Judge Weinstein got the interpretation of IGBA wrong.”

What’s the next step in the DiCristina case? “There’s nothing we can do right now except wait for the court to issue an opinion,” Fleming told PocketFives. “Everyone will wait and see what the Second Circuit says. It’s a three-judge panel we’re before right now. They’ll issue an initial decision. At that point, you can accept the decision or ask for the case to be re-heard before the entire panel of the Second Circuit or ask the Supreme Court to accept the case.” There are 12 Second Circuit judges in total.

You’ll recall that in December 2011, the DOJ released a memo stating that the Wire Act, another major anti-gambling law, only applies to online wagering on sports. As a result, states like Nevada, New Jersey, and Delaware quickly moved to permit regulated internet gambling and online poker. Other states could soon follow suit.

According to Fleming’s account of the hearing, the Government was attempting to argue that online poker, while conceivably a skill game, was still gambling. He quoted the Feds as saying, “IGBA was meant to cover all gambling businesses and ‘of course’ what Congress meant by ‘gambling’ was ‘wagering.’ Any time money is put up to be paid upon an uncertain outcome, gambling has occurred. And since people do not know the outcome of a poker hand before they bet on it, that is gambling as defined by Congress.”

Compared to poker was the board game Scrabble. According to Fleming, “Nearly everyone assumes Scrabble is a game of skill, but Scrabble also uses a random draw of a limited number of letters/tiles, very similar to a deal. And there are lots of Scrabble tournaments around the world, all having a buy-in, a percentage taken out for the operator of the tournament, and payouts dependent upon final ranking in the tournament – not one of which has been prosecuted for illegal gambling.”

We’ll keep you posted on the latest poker legislation and legal news right here at PocketFives.

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