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Q: Legality of Poker in New York City ( Answered 4 out of 5 stars,   0 Comments )
Question  
Subject: Legality of Poker in New York City
Category: Relationships and Society > Law
Asked by: naeblis-ga
List Price: $120.00
Posted: 15 Sep 2004 09:13 PDT
Expires: 15 Oct 2004 09:13 PDT
Question ID: 401540
I am considering opening a poker club in New york city. My questions
are as follows:
What is the general legality of playing poker in New York city?
What is the legality of operating a club in nyc where players were
charged a 'rake' from each poker pot?
What is the legality of operating the same club where players were
instead charged 'time' every 30 minutes to sit at a poker table in the
club, but the house took no money from the poker pots?
What is the legality of having a poker tournament where players paid a
fee to enter the tournament, and a prize pool was given to the winners
after the house took out a fee?
If such a tourney is illegal, how is having a bridge tournament or
other similar event with a cash prize to the winner legal?

I am an attorney, references to specific statutes/cases definitely appreciated. 

It would be helpful I believe to start research with this link
http://answers.google.com/answers/threadview?id=3350#comments
Answer  
Subject: Re: Legality of Poker in New York City
Answered By: belindalevez-ga on 16 Sep 2004 08:18 PDT
Rated:4 out of 5 stars
 
<Legality of Poker in New York City.

There is no legal framework for the operation of a private poker club.
Those that do exist tend to keep their locations secret and risk being
raided by the NYPD and being closed down.

Although there are no specific laws prohibiting or regulating the game
of poker. There are laws banning gambling and legislation covering
games of chance.

For poker to be legally played it would have to be shown that poker is
a game of skill and not a game of chance and therefore not gambling.
As far as I can ascertain, the legality of poker in New York has not
been tested in the courts.

The New York State Constitution bans all forms of gambling with some
exceptions. There is also legislation covering games of chance. 
http://www.racing.state.ny.us/about/about.home.htm

In contrast bridge is considered a game of skill so bridge tournaments are allowed.

Is poker a game of chance and therefore a gambling game or is it a game of skill?

Poker is considered by many to be a game of skill and as such is not
gambling. A number of companies are now taking advantage of this fact
and are offering skill-based games over the internet. It remains to be
seen whether or not there will be any legal challenges to these
operations.

Such a company is WorldWinner, an online game site that runs games of
skill. According to gambling industry consultancy, Christian Capital
Advisors, since there?s skill involved you can?t really call it
gambling. Mr Killeen, chief executive of WorldWinner compares his
company?s role to that of the United States Tennis Association, which
organizes the U.S. Open tournament. ?We provide the setting, award the
prizes and create the draws,? he said. ?We take a management fee and
award the prize to the winners.?
http://digitalsqueeze.com/drupal/node/view/2905

E-bridge offers online poker tournaments. It list 13 states where
players cannot participate in fee-based tournaments. New York is not
listed.
http://www.e-spades.com/spades/base/termsofuse.asp

A company that plans to offer online poker also argues that poker is a
game of skill. Chuck Humphrey takes a look at legislation.
http://www.gambling-law-us.com/Articles-Notes/online-poker-skill.htm

Playing for Profits: Games of Chance vs. Games of Skill.
This article looks at what determines whether a contest is a game of
chance (gambling) or a game of skill.
http://www.phoneplusmag.com/articles/361FEAT4.html

Poker: A Game of Chance or Skill
http://www.greenbaypressgazette.com/news/archive/local_15329337.shtml

Tournament poker compared to golf.
http://loveandcasinowar.com/blogarch/000529.php

The situation in New York.
New York currently has a number of poker clubs that are operating as
private clubs. They operate under great secrecy. This article
describes such a club. ?There seems to be little for the clubs to
worry about. A request to the NYPD for a comment on poker rooms, made
last Tuesday, goes unanswered.? (New York Daily News, August 7, 2004).
http://www.nydailynews.com/sports/story/219923p-189120c.html

After a  review on this website a poker club was raided and closed by
the NYPD. (Riding the F Train. Notes from Underground. New York City
Poker Room Reviews).
http://ftrain.blogspot.com/2004_08_01_ftrain_archive.html

Stacks and the City describes how one owner operates. The location of
the club is kept secret. A website gives players a telephone number so
that they can find the location of the club. Once there are enough
members, the website will be removed.
http://www.nydailynews.com/sports/story/217769p-187359c.html

A letter published on the site of the National Indian Gaming
Commission considers the legality of opening a poker club in New York.
It considers various aspects of the law and concludes that playing
poker is legal. A summary of the arguments follows:

Poker is a Class II game in the State of New York as defined by the
Indian Gaming Regulatory Act. As a Class II game poker is subject to
tribal and federal regulation only.

The New York State Constitution provides,  that ?no . . . gambling . .
. shall hereafter be authorized or allowed within this state; and the
legislature shall pass appropriate laws to prevent offenses against
any of the provisions of this section.?  N.Y. CONST., art. I,  9, cl.
1.

However the state legislature has created a number of ?exceptions? and
has established a Racing and Wagering Board.  The legislature has
addressed the play of various games of chance but it has not enacted
any specific statutory provision authorizing the play of poker. In the
absence of express approval to the playing of poker, the crucial
determination becomes whether New York explicitly prohibits its play.

New York?s constitutional provision relating to gambling is not
self-executing.  See People v. Wilkerson, 342 N.Y.S.2d 936, 942
(N.Y.Co.Ct. 1973). The New York constitution directs the Legislature
to ?pass appropriate laws to prevent offenses against any of the
provisions of this section.?  N.Y. CONST., art. I.,  9, cl.1.  The
constitutional provision ?requires enforcement by the Legislature.? 
Wilkerson, 342 N.Y.S.2d at 942 (citations omitted).  Therefore,
gambling is not a crime unless made so by statute.  People ex rel.
Collins v. McLaughlin, 113 N.Y.S. 188, 197 (N.Y.A.D. 1 Dept. 1908),
appeal dismissed, 194 N.Y. 556 (N.Y. 1909).

As directed, the State legislature ?has legislated in the field of
gambling and by the Penal Law, delineated the conduct to be prohibited
throughout the state.?  Wilkerson, 342 N.Y.S.2d at 942. 
Significantly, ?[t]he only gambling activities which are prohibited
are promoting gambling (PL  225.05 and 225.10), possession of
gambling records (PL  225.15 and 225.20) and possession of a
gambling device (PL  225.30).?  People v. Melton, 578 N.Y.S.2d 377,
378 (N.Y. Sup. 1991).  Therefore, playing or engaging in its play are
not explicitly prohibited by New York penal laws.

New York sate penal law follows the policy of penalizing only the
promoter and not the player.  See Watts v. Malatesta, 262 N.Y. 80, 82
(N.Y. 1933) (casual betting or gaming by individuals as distinguished
from betting or gambling as a business or profession, is not a crime).
 New York has not treated individuals participants in gambling games
as criminals.  Melton, 578 N.Y.S.2d at 378.  Participating in gambling
games on the same terms as other players for amusement or recreation
is lawful.  See Wilkerson, 342 N.Y.S.2d at 940.  More specifically,
the ?Legislature . . . has excluded the ?player? from the reach of the
Penal Law.?  Id.

New York gambling laws are ?intended and designed to sanction and
facilitate the prosecution of the professional book-maker and other
professional operators and promoters of unlawful gambling activity. 
The individual player or bettor is excluded from its prohibitions. 
People v. DiCarlo, 309 N.Y.S.2d 791, 792 (N.Y.Co.Ct. 1970).  Although
?promoting? the play of poker may be unlawful, participating in
gambling games on the same terms as other players for amusement or
recreation is lawful.  See Wilkerson, 342 N.Y.S.2d at 940.
The fact that New York?s penal code prohibits the promotion of
gambling is not the significant factor.  The determining question is
whether the state criminal laws prohibit the play of the game, in this
case poker.  As we have seen, the penal code does not make the play of
poker a criminal violation.
New York ?regulates? rather than ?prohibits? gambling in general. 
Therefore, the play of poker is not seen as totally repugnant to the
State?s public policy.  See Masantucket Pequot Tribe v. State of
Connecticut, 913 F.2d 1024, 1021 (2nd Cir. 1990) (Connecticut law
applicable to class III gaming is regulatory rather than prohibitive;
thus, under IGRA, Connecticut was required to enter into good-faith
negotiations with Indian tribe for purpose of formulating tribal-state
compact).
There is no serious dispute that poker is played within private homes
and public locations throughout the State of New York.  We concluded,
therefore, that the requirement contained in section 2703(7)(A)(ii),
for the game to be ?played at any location n the state,? is also
satisfied.
The Oneida Indian Nation may offer non-banking poker at its Club as
class II gaming, so long as it is being ?played in conformity with the
laws and regulations (if any) of . . . [New York] State regarding
hours of operation of such card games or limitations on wagers or pot
sizes in such card games.?  25 U.S.C.  2703(7)(A)(ii).  Since social
poker games are presently not regulated in New York, there are no
rules on hours, periods of operation, wagers or pot sizes.
http://www.nigc.gov/nigc/documents/opinions/pokerclub.jsp>


<Additional links:>
<New York regulation of games of chance.>
<http://www.dos.state.ny.us/corp/pdfs/mrgoc.pdf>

<Taxes & IRS>
<http://www.lasvegasvegas.com/pokerblog/archives/000110.php>


<Search strategy:>

<"illegal to play poker" "new york">
<://www.google.com/search?hl=en&lr=&ie=UTF-8&q=%22illegal+to+play+poker%22+%22new+york%22>

<"new york" poker law>
<://www.google.com/search?hl=en&lr=&ie=UTF-8&q=%22new+york%22+poker+law>

<"poker club" "new york" legality>
<://www.google.com/search?hl=en&lr=&ie=UTF-8&q=%22poker+club%22+%22new+york%22+legality>

<"private clubs" "new york" poker>
<://www.google.com/search?hl=en&lr=&ie=UTF-8&q=%22private+clubs%22+%22new+york%22+poker>


<Hope this helps.>

Request for Answer Clarification by naeblis-ga on 16 Sep 2004 08:39 PDT
You do a good job substantiating your conclusions near the end of the
article, but in the early part there are some conclusions with no
references. You make two statements which I would like to see a case
for:

1) For poker to be legally played it would have to be shown that poker is
a game of skill and not a game of chance and therefore not gambling.

2) In contrast bridge is considered a game of skill so bridge
tournaments are allowed.

It's really one question. Can you refer me to some case where they
applied the 'is this game of skill or chance test'? I don't care if
its bridge or tennis or what, but I'd love to see a case where they
considered the question.

Thanks

Request for Answer Clarification by naeblis-ga on 16 Sep 2004 13:48 PDT
Also ive been told that the issue was litigated in new york about 30
years ago with backgammon where the court ruled it was not a game of
chance, but of skill.

That might be exactly what im looking for if u can find it.

Clarification of Answer by belindalevez-ga on 17 Sep 2004 00:53 PDT
< In State v. Stroupe, 238 N.C. 34, 76 S.E.2d 313 (1953), a case
involving the legality of the game of pool, the Supreme Court stated:
It would seem that the test of the character of any kind of a game of
pool as to whether it is a game of chance or a game of skill is not
whether it contains an element of chance or an element of skill, but
which of these is the dominating element that determines the result of
the game, to be found from the facts of each particular kind of game.
Or to speak alternatively, whether or not the element of chance is
present in such a manner as to thwart the exercise of skill or
judgment.
Id . at 38, 76 S.E.2d at 316-317. 
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=nc&vol=appeals%5Cappeals1220%5C&invol=collins

If this ruling is applied to poker, it can be argued that poker is a
game of skill. One of the unique characteristics of poker is the
opportunity that players have to bluff. This means regardless of what
cards have been dealt, a skilful bluffer can still win a game. A poker
player can therefore overcome the chance element of the dealing of the
cards.

Three-card monte is a game of skill.
In Manhattan Criminal Court Judge Sheryl Parker ruled that three-card
monte, the reigning street hustle, is a "game of skill" that cannot be
regulated under the state's gambling laws.
http://www.city-journal.org/dev/html/4_4_soundings.html 

Backgammon was successfully defended as a game of skill in Portland,
Oregon (1981). Tournament director and writer Ted Barr was charged
with promoting gambling. Barr enlisted the help of among others,
former World Champion Paul Magriel.

The main point of the issue was the effect of the dice of the game.
"Even after rolling, you may have as many as 30 or more options.

Judge Stephen S. Walker agreed. He found Barr innocent of promoting
gambling, concluding that "backgammon is not a game of chance but a
game of skill."

The Alabama Supreme Court (1976) also decided that backgammon was a game of skill.
http://www.edcollins.com/backgammon/backgamb.htm


In 1911, California's attorney general (Harold Sigel Webb) ruled that
closed poker (draw poker) was a game of skill and beyond antigambling
laws. But open poker (stud poker) was a game of chance and therefore
illegal.
http://www.14g.com/poker/knowledge/history_of_poker/


The US District Court of Las Vegas on February 23, 1965 ruled that Gin
Rummy is a game of skill.
http://www.gamecolony.com/gin_rummy_game_skill.shtml


In California, re Allen, 59 Cal.2d 5, 377 P.2d 280, held that the game
of bridge is a game of skill, not a game of chance.

The case involved  ?a petition for a writ of habeas corpus on behalf
of a defendant who was arrested and charged with a violation of
section 22 of article 2 of Los Angeles County Gambling Ordinance No.
461.  The section provided: ?A person shall not knowingly permit any
game prohibited by this ordinance to be played, conducted, or dealt,
in any house or other premises, owned by, rented by, or in the lawful
possession of such person.?  Section 21 of article 2 provides, in
part: ?A person shall not deal, play, carry on, open, cause to be
opened, or conduct any game of chance played with cards, dice, or
other device for money, checks, credits, or other thing of value.?
The Court had no difficulty in finding bridge was widely recognized as
predominantly a game of skill.  The Court said: ?The term ?game of
chance? has an accepted meaning established by numerous adjudications.
 Although different language is used in some of the cases in defining
the term, the definitions are substantially the same?.  It is the
character of the game rather than a particular player's skill or lack
of it that determines whether the game is one of chance or skill. The
test is not whether the game contains an element of chance or an
element of skill but which of them is the dominating factor in
determining the result of the game.  I
Tibbetts v. Van de Kamp, 271 Cal.Rptr. 792, 222 Cal.App.3d 389 (1st
Dist. Ct. Appeal, 1990) held that Texas Hold?em was not a stud poker
game and therefore, under Section 330, could be played at the Oaks, a
licensed cardroom.
"A game is not to be regarded as one of skill merely because that
element enters into the result in some degree, or as one of chance
solely because chance is a factor in producing the result. The test of
the character of a game or scheme as one of chance or skill is, which
of these factors is dominant in determining the result??  People v.
Settles, 29 Ca App Supp 2d 781, 78 P 2d 274 (Appellate Department,
Superior Court, County of Los Angeles, 1938.)
In Bell Gardens Bicycle Club v. Dept. of Justice, 42 Cal.Rptr.2d 730
36 Cal.App.4th 717 (Court of Appeal, Second District, Division 7,
California, July 11, 1995.Rehearing Denied Aug. 1, 1995. Review Denied
Oct. 26, 1995) the issue was the legality of ?jackpot? poker.  In 1989
the California attorney general notified licensed cardrooms, which
were offering jackpots, of his opinion that jackpot poker was unlawful
because it violated California constitutional and Penal Code
proscriptions against lotteries.  Various state officials sued a
number of the licensed cardrooms seeking to have the jackpot declared
illegal.
In ?jackpot? poker the ?house? withholds money from pots in lawful
poker games to fund the ?jackpot,? which is won and then split among
several players in a game when a specified rare hand is beaten by a
better rare hand.
The case finally reached the California Court of Appeals in 1995.  The
appellate court held that the jackpot feature is an illegal lottery
under Penal Code section 319 given the predominance of the element of
chance in winning a jackpot.  The Court distinguished this from the
legal game of poker under section 330.  The analysis of skill versus
chance in this case went to the question of whether the jackpot
feature could avoid the status of being held to be a lottery, not to
whether the game of poker itself is legal or illegal on the basis of
skill predominating over chance.

http://www.gambling-law-us.com/Articles-Notes/california-lotteries-gambling.htm>


<Hope this helps.>

Request for Answer Clarification by naeblis-ga on 17 Sep 2004 06:42 PDT
This is the kind of stuff I'm looking for, however as the club would
be in New york city only New York law matters to me. If you can pls
find me one or two cases such as the pool or backgammon case within
the last 35 years or so in New York. Then I will be quite happy with
your work.

Clarification of Answer by belindalevez-ga on 17 Sep 2004 12:47 PDT
<Pinball is a game that was banned in New York as it was considered to
be a gambling game. In 1976 it was reinstated after it was proved to
be a game of skill.

A ban on pinball machines in New York City (established in 1942) is
lifted when Mr. Roger Sharpe, a writer for Esquire magazine,
demonstrates to the City Council the ability to drop the 80 gram balls
down any preselected lane at the top of a pinball machine by adjusting
the way he pulls back the plunger. (Source: icwhen.com)
http://www.icwhen.com/book/the_1970s/1976.shtml

Testifying before the New York City Council at a hearing on pinball in
April 1976, Sharpe, then a 27-year-old magazine editor in Manhattan,
played three balls on a Gottlieb Bankshot, explaining to his audience
as he played how pinball was a game of skill, not of chance. Sharpe
tells what happened next: "'Even down to this plunger,' I told them,
'there's skill. If I pull this back the right way, I should be able to
send the ball into the middle slot.' I actually specified a lane,
which, in retrospect, I probably should not have done. I pulled back
the plunger, and wouldn't you know, boom boom, it went straight down
where I had said [it would go]. These people kind of threw up their
hands and said, 'All right. Enough. Fine, thanks.'"
The council reinstated pinball in New York City that summer. (Source:
Cigar Aficiado).
http://www.cigaraficionado.com/Cigar/CA_Archives/CA_Show_Article/0,2322,608,00.html>

<Hope this helps.>
naeblis-ga rated this answer:4 out of 5 stars
Researcher was very quick and seemed willing to be thorough. When
answering legal questions however, needs to focus more on jurisdiction
and legal authority (cases and statutes). Information from
newspapers/articles from other jurisdictions not helpful to specific
legal enquiry. Overall solid job however.

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