In a ruling handed down by Pennsylvania Judge Thomas A. James Jr. in Columbia County on Friday, it was ruled that Texas Hold’em is a game of skill and therefore not gambling under state law. The ruling sets an “excellent bar” for future poker litigation, according to Poker Players Alliance (PPA) Executive Director John Pappas.
The basic question, according to Judge James’ ruling, is whether poker is dominated by chance or skill. He commented “Simply, if chance predominates, Texas Hold’em is gambling. If skill predominates, it is not gambling.” In Pennsylvania, video poker machines are not allowed because their outcomes are primarily due to chance, not skill. In the case of Texas Hold’em, however, Judge James explained that extensive literature exists that describes winning strategies to play the game. He even cited Mike Caro’s “Secrets of Winning Poker” by saying, “the money flows from the bad players to the strong players.”
In his ruling, Judge James explains that the “dominant factor test” has traditionally applied to games of skill and cites multiple mathematical studies that prove it, including one linking “poker and economics.” An included study even explained that players receive equal amounts of premier and lackluster starting hands. However, “Beginning poker players rely on big hands and lucky draws. Expert poker players use their skills to minimize their losses on their bad hands and maximize their profits on their big hands.” In the end, Judge James asserts, “It is apparent that skill predominates over chance in Texas Hold’em poker.”
The defendant in the case, Walter Watkins, ran a $1-$2 No Limit Hold’em game out of his garage. No rake was taken, according to the PPA. Instead, players were encouraged to tip the dealer at the end of every hand based on the pot’s size, just as they would in conventional casinos. Only Texas Hold’em was played. Also identified in the case is Diane Dent, a dealer. Both have since been cleared of charges as a result of the ruling. Pappas told Poker News Daily, “Clearly, the judge had an understanding of how poker is played. Coming to this decision, to him, was not a far leap. The decision sets an excellent bar for us in the future.”
Watkins told the Associated Press, “It’s unfortunate we had to go through all this. We were arrested, taken out of our home. Shackled and spent a night in prison. All for playing poker.” Watkins and Dent were faced with 20 charges each. Leading up to the arrest of the pair, who the Associated Press identifies as boyfriend and girlfriend, an undercover Pennsylvania State Trooper took part in the game. Dent served as the dealer when the trooper attended and the case ultimately centered on whether Texas Hold’em is “unlawful gambling” according to Pennsylvania state law. It appears as if, for the time being, that question has been answered. No word of an appeal was given as of press time.
Cited in the case are a bevy of poker-related books, studies, and websites, including HoldemSecrets.com, “Explaining Winning Poker: A Data Mining Approach,” and “Poker and the Unlawful Internet Gambling Enforcement Act.” The UIGEA, which was passed in 2006, defers to existing state and federal laws when defining what is “unlawful internet gambling.” Pappas claimed that the PPA was looking into ways to incorporate Friday’s ruling in Pennsylvania into other legal battles throughout the country. The PPA operates an extensive Litigation Network that matches embattled poker players with local lawyers. It utilizes the power of numbers to be able to pool knowledge of case law as well as the implications of precedents like the one set on Friday.
Peter Campana represented the defendants, while Thomas Leipold served as counsel for the State of Pennsylvania.