Many people play poker for fun with friends or competitively, but if one wishes to organize a league, tournament and/or a game that is more than simply a few hands of cards among friends, one must ensure he does not run afoul of the law. If one is interested in organizing a formal poker game, be sure to consider the below when doing so.
The Court has determined that poker is a “game of chance” (i.e.: gambling) as opposed to one of skill and/or strategy. As a result, Pennsylvania gambling laws apply to poker. The application of Pennsylvania laws takes any sort of licensing for poker games in the case of casinos and similar type places out of the hands of local municipalities and places it into the hands of the Pennsylvania Gaming Control Board. Unfortunately, as a result, the means in which a local organization, perhaps a private club of some sort, can organize a poker tournament or league without running afoul of the law is far less clear.
The lack of clarity on this issue comes from the fact that Pennsylvania law does not define precisely what “unlawful gambling” is, therefore it is not clear, at least from the point of view of current legislation, whether a private poker tournament, or poker league, is considered unlawful gambling. What can be said is that, pursuant to established case law, gambling requires three things: consideration, chance, and reward.
While the Pennsylvania courts have made some rulings on this subject, it would appear that the courts’ current view is that if the Commonwealth has not authorized it, one should presume it is unauthorized and, in fact, unlawful. One could try and squeak through the cracks, especially if it were only a one time, instead of an ongoing event. If, for example: (1) no money is actually bet during the games (relying instead, for example, on money donations to register for the event or league itself); (2) one plays with and wins/loses only chips (as opposed to money); and, (3) players win prizes based only on the number of chips won as opposed to money.
The above may be the safest manner in which to establish a poker league/tournament as it may not be considered gambling at all as money is not changing hands during the game. The set up is obvious. Each time one has a tournament, each player arrives and pays some sort of cover charge (or donation) in order to buy into the game. The cover charge cannot have any relationship to the number of chips allotted during the game. So, regardless of whether players paid the base cover charge to get in, felt generous and paid more to register, or didn’t have to pay anything, the players would all get the same number of chips at the start of the game. Therefore, the chips and money paid are separate and no one directly plays for the money, just chips. One could establish first, second, third, and/or other rankings/placings and associate prizes for each, but only according to chip totals (as opposed to money amounts).
In the scenario described above, the consideration (to qualify as gambling) is separated from the chance and reward in the game in order to ensure there is no nexus between the three (3) elements of gambling listed above.
The only fly in the ointment would be a court’s ruling that inserting a coin into a coin operated poker machine constitutes consideration to establish gambling. The coin does not have to bear any relationship to the amount wagered and traditional poker wagering is not possible in video poker, therefore great care must be taken in how one deals with the cover charge described above. If the poker game just happens to take place within a larger event where a cover charge is assessed for entrance, then it would seem to remove the money (i.e.: consideration) from any nexus with the chance and reward of the game. In addition, as long as people are playing only for chips and prizes, neither of which depends on, or is associated with, the money paid in, it would seem the nexus between the consideration and chance and reward is broken.
For more information, be sure to consider the statute and cases below:
- 18 Pa.C.S.A. §5513;
- Commonwealth v. Dent, 992 A.2d 190 (Pa.Super. 2010);
- Commonwealth v. Two Electronic Poker Game Machines, 502 Pa. 186 (1983)
Originally published in The Legal Intelligencer Blog on November 21, 2014 and can be seen here.