Wednesday in New York City, the U.S . Court of Appeals heard oral arguments in the US vs. Lawrence DiCristina appellate case. This case is unique as it brings to the federal appellate level the question of whether poker is meant to be included under violations of the Illegal Gambling Business Act of 1970 (IGBA) definition of “gambling”. The question of “skill vs chance” as relates to poker, is an integral part of the case.
In the original case (Eastern District of N.Y.), Lawrence DiCristina was charged with violating IGBA for operating a home poker game in a Brooklyn N.Y. warehouse. Extensive evidence was presented during trial regarding the skill vs chance argument about poker, most notably from Dr. Randall Heeb. The jury was not permitted to consider that defense at the time however, and Judge Weinstein held his decision to be considered by the bench following the verdict, if necessary. A jury in EDNY did convict DiCristina, but then Judge Weinstein set aside the verdict and found the skill vs chance argument to be compelling evidence that IGBA would not apply.
The government appealed Weinstein’s decision and this is the case now before the 2nd Circuit Court of Appeals. The governments position is that the skill vs chance argument is moot, that poker is gambling and qualifies therefore under IBGA.
Each side was allotted 10 minutes to present arguments, including time for rebuttal for the government.The Judges hearing the arguments were: Judge Chester Straub, Judge Peter Hall and Judge Denny Chin. DiCristina’s attorney was Neal Kumar Katyal and the government was represented by Assistant US Atty Taryn Merkl. The Judges peppered both sides with questions during each presentation. The burden was on the government to prove that the Weinstein decision should be overturned. The questions and answers were quick and in rapid succession; a brief synopsis of some of the questions/answers follows:
The government began their presentation by saying that the rule of “statutory construction” applies to IGBA, that it defies common sense to accept that poker is not gambling and the Weinstein ruling should therefore be reversed. The purpose of the statute was to curtail what was one of organized crimes largest money makers. Gambling is wagering, anytime someone places a bet on any game, it is gambling. 1
The court then asked, if the purpose of IGBA was to target organized crime, how does that apply in this case?
The government’s answer was that it was not relevant, since Congress did not limit the statute to apply solely to organized crime violators. The only requirements to be met are that those charged must be operating a gambling business, having operated that business for at least 30 days or, that at least $ 2000/day was generated in revenue and that 5 or more persons were involved in the business.
The court then questioned how the government would then define gambling to which the government replied that the only sensible answer is that gambling is wagering. Furthermore, said the government, the definition of gambling is not another requirement that must be proven.
Why then, asks the court, would section B(2) of the statute exist? Why give a list of games at all? What is the meaning?
The government says that the word “means” (as to the list of games) was removed from the final wording so that the interpretation was not limited to the nine games mentioned, that it should include a more expansive list.
The court then asks why the government chooses to ignore that section of the statute. The governments only response was that the statute did not differentiate poker as to be excluded from the list.
One Judge then asked the government what then makes this different than a few Supreme Court justices getting together to play poker in the living room?
The government pointed out that Di Cristina’s game was not similar to a friendly poker game in one’s home. The game was held in a warehouse, with an armed security guard and surveillance cameras. She claimed to point to information that an average pot could be ~ $ 250. Therefore playing ~ 15 hands per hour, for 8-9 hours, which is not unusual, could bring levels to $ 60-100K, where DiCristina took a 5% rake, uncapped. (She never took into consideration that it was the same money back and forth into the pots, not a new $ 250 pot each hand).
Her final quote in her presentation was that poker games are “the type of societal ills that the government worries about“.
The attorney for DiCristina, Neal Katyal, began his turn by saying that Mr. DiCristina is not member of any organized crime family, nor was he ever charged with being so.
He further pointed out that although the government is naming amounts of $60-100,000.00 at stake in the games, that the government had only cited one time in the case, an amount of $ 2300.00 to have been at stake.
Katyal conceded that IGBA parts B.1. (i)(ii)and (iii) were valid parts of the statute but gambling is not defined without considering section B.2.
For clarity, the IGBA sections referred to:
(b) (1) “illegal gambling business” means a gambling business which –
(i) is a violation of the law of a State or political subdivision in which it is conducted;
(ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
(iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.
(b) (2) “gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
The question arises why Congress even added B(2) if everything was included in (B)1 as the government suggests. The court asks if that were just for examples, but Katyal explains it’s for clarification instead. Katyal agrees that it is a non exclusive list but the list in the statute are all games of chance, while poker is not and that poker is an imperfect information game.
To convict someone in a criminal case the definitions in a statute must be plain and unmistakable says Katyal, although the government calls the definitions many things.
The court asks why has this question never been addressed? Katyal responds that this is the first time the subject has been litigated.
One Judge continues to ask why not to rely on Gotti (U.S. v. Gotti, 459 F.3d 296 (2006)),2 which this circuit court has already visited? Katyal responds that the court should note that in Gotti, the defendants never raised the question of skill vs chance.
To finalize his time, Katyal urges the court to consider that there should be no way that a criminal case against an individual moves forward when the statute is this ambiguous. Congress never enumerated poker in this statute.
In closing, Katyal further urges the court not to do what was done with the Wire Act, where the government got it wrong for 50 years.
In rebuttal the government is asked by the court whether they concede that B1 (i)(ii)and(iii) are not sufficient to determine the definition of gambling to which the government replies that they do not concede anything.
They repeat that they believe the definition of “gambling” is “wagering” to which the court asserts that the government has continued to change their position.
The government then says that they have not shifted their position, that they believe that B(1) can stand alone, that they have never conceded that poker is a game of skill, but even if it were, once a wager has been placed, poker qualifies as gambling.
The government repeats that they believe DiCristina knew it was gambling, by virtue of the steps he had taken with respect to security guards and cameras.
In closing one Judge commented that it was a “very interesting case”.
The court has reserved its decision. That decision could come in a matter of days or it could be several months.
Diamond Flush Poker will continue to follow and advise of any updates.
- It was long rumored that the reason the DiCristina case was brought before a federal court rather than NY state court was because there were NY State police officers taking part in the game. While not confirming precisely that, the government made comments during the arguments that there was an undercover operative taking part and that an Internal Affairs investigation had been underway. ↩
- In Gotti, the IGBA charges related to Joker Poker machines. The defendant, Peter Gotti, conceded that chance played a major role in the outcome of the game. ↩