Poker is a game of skill, according to federal judge

WASHINGTON, Aug. 23, 2012 /PRNewswire/ -- Working on behalf of the defendant in the matter USA v. Lawrence Dicristina, Bates White Partner Randal Heeb testified in federal district court that poker is predominantly a game of skill, rather than one of chance. The case involved a Staten Island man running a poker game out of his shop, reigniting the question of whether poker is considered to be a form of gambling and therefore illegal under the Illegal Gambling Business Act (IGBA). Judge Jack B. Weinstein ultimately ruled that poker is "predominated by skill" and therefore does not fit the definition of gambling under the IGBA. Judge Weinstein cited Dr. Heeb's testimony extensively in his decision, noting that "[Dr. Heeb's] studies and conclusions are found to be accurate and persuasive by this court, which heard and analyzed all the evidence."

Dr. Heeb, an expert in game theory and econometrics, and an avid poker player who has won an event at the World Series of Poker, based his conclusions on several opinions and analyses. Dr. Heeb described to the court the vast number of complicated decisions involved in poker, and how these complex strategic considerations allow players of varying skill to differentiate themselves. He also described how many players make a living playing poker and win consistently over time. Dr. Heeb testified that both of these factors distinguish poker from games predominated by chance, such as roulette.

The core of Dr. Heeb's testimony involved several analyses that he and the Bates White team conducted. These analyses were based upon a remarkable data set of over 415 million hands of No Limit Hold'em poker played online, which included all of the players' hidden hole cards, betting decisions, and results. Based on analysis of these hundreds of millions of hands, Dr. Heeb demonstrated that a player's level of success on one set of hands is predictive of the player's success on other hands. Essentially, successful players consistently win more than less successful players with virtually all starting hands they are dealt—a result that is to be expected in a game predominated by skill but not in a game predominated by chance. Another key analysis involved implementing an econometric model to estimate the skill level of players based upon a large number of variables regarding the strategies and tactics they employ.  Dr. Heeb found that players predicted to be of high skill reliably outperform players predicted to be of lesser skill, and that high-skilled players will predominate over less-skilled players in a relatively short amount of time. Based on this analysis, Dr. Heeb was able to quantify the relative contributions of skill and chance in No Limit Hold'em and show conclusively that skill predominates over chance.

In his decision, Judge Weinstein wrote that Dr. Heeb "has shown persuasively that skilled players will predominate over the less skilled in a relatively short time," supporting his ultimate findings about the question of skill versus chance.

With regard to the decision, the Poker Player's Alliance released a statement Tuesday in which Executive Director John Pappas said, "As we worked for years defending players against vague gambling laws, we have patiently waited for the right opportunity to raise the issue in federal court. Today's federal court ruling is a major victory for the game of poker and the millions of Americans who enjoy playing it."

SOURCE Bates White Economic Consulting