Skill or No, Poker Smacks of Illegal Gambling

MANHATTAN (CN) - Rejecting a federal judge's reasoning that poker is not technically gambling because it is a game of skill, not luck, the 2nd Circuit reinstated a gambling conviction against the operator of an underground poker game.

"There is nothing in the legislative history suggesting that whether a game was predominated by chance was relevant to whether a business operating that game constituted an illegal gambling business," Judge Chester Straub wrote for the three-judge panel.

Between December 2010 and May 2011, Lawrence DiCristina, along with co-defendant Stefano Lombardo and others, ran a poker club in the back room of a Staten Island warehouse where he sold electric bicycles. Word-of-mouth and text messages brought people in to the twice-weekly games at the two-table club featuring no-limit Texas Hold 'em. The house took a 5 percent rake from each pot.

DiCristina and Lombardo pleaded guilty in December 2011, but the court permitted DiCristina to withdraw his guilty plan that May.

He moved the next month to dismiss on the basis that poker is a game of skill and not chance and thus is not covered by the federal law banning illegal gambling. A jury found DiCristina guilty.

DiCristina then moved for an acquittal, arguing that poker did not fall within the statutory definition of an illegal gambling business because it was neither "house-banked nor predominated by chance."

The government argued that the law did not restrict the types of games that constitute unlawful gambling.

U.S. District Court Judge Jack Weinstein quickly vacated DiCristina's conviction after finding that the federal law banning illegal gambling did not cover Texas Hold 'em.

Emphasizing that poker is a game of skill rather than chance, Weinstein said the legislative history was not decisive as to whether Congress meant to include poker as an illegal gambling activity.

The judge's 120-page opinion noted that the law did not "provide explicit criteria" for the definition of gambling, and that there were "ambiguities in the federal definition of gambling."

"Dictionary, common law and other federal definitions of gambling argue in favor of a definition limited to games of chance," Weinstein wrote.

The circuit disagreed, stating that the "plain language" of the law clearly proscribes poker by criminalizing the act of running a gambling business that is conducted by five or more people and has operated for either more than 30 days or earned more than $2,000 a day.

Including the amount of people running a gambling ring and the amount of money it makes "demonstrates that the focus of the statute's criminal proscription is not on what game is being played, but on the size of the business and the revenue derived by those who are running it," according to the ruling.

DiCristina maintained that the law does not apply to a poker business because it does not fit within the "definition of gambling."

This failed, however, to persuade the appellate judges. "Had Congress intended to create a definition of 'gambling' unique to the [law], or to confine the reach of the [law] to businesses involving certain types of gambling, it could have inserted such language," Straub wrote.

The panel examined the legislative history and concluded that, because illegal gambling is organized crime's greatest single source of revenue, it is "remarkably clear that the passage of this statute was driven by the desire to crack down on organized crime." The law, Staub continued, focused on "concerns about the revenue generated by large scale gambling business rather than the games that were played.

Prosecutors had argued that the law would criminalize private poker games, but the circuit noted that the other requirements of the statute - that it be run by more than five people and make at least $2,000 a day - "would exclude the typical friendly game of poker from the statute's reach."

In reversing the acquittal, the circuit ordered that DiCristina be sentenced for the conviction. He faces up to 10 years.

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