Friday, July 17, 2009

Skill Versus Chance in Poker

By Mike Sexton for POKER NEWS DAILY Posted on March 29, 2009

Recently, I went to Charleston, South Carolina to testify as an “expert witness” in a poker trial. The case was the Town of Mount Pleasant versus five poker players who pled not guilty when they were busted for playing in a $20 tournament in someone’s house a couple of years ago. South Carolina law is similar to about 20 other states’ laws which say that it’s illegal to bet on any games of chance (in South Carolina, any game of dice or cards is considered to be a game of chance). Our mission was to prove that No Limit Hold’em poker was predominantly (more than 51%) a game of skill rather than chance. Fortunately for everyone in the poker world, Judge Larry Duffy agreed to hear testimony on this.

To poker players, whether poker is a game of skill or chance is a “no-brainer.” In my research for this case, I learned that several previous cases failed to prove this in court (even though two recent rulings in Pennsylvania and Colorado ruled that skill was the predominant factor in Hold’em). Proving that skill predominates over chance in a court of law is quite different than discussing it among poker players. Even if someone was a big favorite to win a pot, people who really don’t play poker see that any card can come up in the end and, therefore, many would think that Hold’em poker is primarily a game of chance.

Twenty states have laws similar to South Carolina’s, which says that it’s illegal to bet on any games of dice or cards. They claim it’s illegal to gamble on games of chance. If we were able to prove to the judge that poker was predominantly (51% or more) a game of skill, then perhaps the law could be changed to allow poker players to play in their homes without fear of criminalization. Obviously, the more court rulings that agree with this, the better the chance we have to change the laws nationwide.

Prior to going to South Carolina, I was forwarded a paper written by Howard Lederer on the predominant factor of skill versus chance in poker (specifically in No Limit Hold’em, as this was the game these guys were playing when they were busted). I thought Howard’s paper was brilliant. It was well thought out and very well written. Howard understood why previous cases had failed to prove that skill predominated over chance in poker. For the most part, they basically rested their testimony on the fact that that better players have an edge and the same people win year after year. He felt this thought process was doomed to fail in court.

The crux of Howard’s paper focused on the “predominant factor” and the skill elements of the game - things that are in total control of the player such as betting, calling, and folding. Everyone agrees on what the chance elements are in poker - the randomness of the cards and how they are dealt. The skill elements are what need to be defined. If there was no betting or folding in poker, it would be showdown poker and the luckiest player would win. It would simply be a game of chance. But that’s not how poker is played. One key point (verified by over 100 million hands played) is that over 70% of the hands dealt in No Limit Hold’em do not go to showdown (regardless of who may or may not have had the best hand). These pots are won by the skill applied by the player betting and getting everyone out of the pot.

In my testimony, I listed ten points that I felt were vital to becoming a successful poker player and stressed that there is so much more to playing poker than just the cards you get. I brought footage of actual hands that were played on the World Poker Tour to use for demonstration. They showed bluffing (where the guy won the pot, not because of his cards, but because of his skill), amateurs making mistakes, tells that were read properly by an opponent, someone making a tough call, and someone making a good laydown. These visual aids were very impressive in demonstrating that skill predominates over chance in No Limit Hold’em.

After hearing the testimony of myself and Dr. Bob Hannum (an expert in gaming mathematics who also testified as an expert witness), it seemed pretty obvious to all, especially the judge, that skill was the predominant factor in poker. Although the prosecutor asked us a few questions, he didn’t really make an effort to produce any contradictory evidence to the facts we testified on. He said his case didn’t matter whether poker was a game of skill or chance, but simply that these players were playing in a “house of gaming” and were guilty as charged.

The decision by the Judge Duffy resoundingly held poker to be a game of skill. However, he ruled against the five defendants. Judge Duffy is leaving it up to the appellate courts in South Carolina to decide if that fact is determinative of whether playing in a home game with a rake is legal under South Carolina law. He noted the absence of authority from the South Carolina Supreme Court as to whether the predominance test is the law in the state.

To quote Judge Duffy in his decision, “This Court, based on the above stated facts, finds that Texas Hold’em is a game of skill. The evidence and studies are overwhelming that this is so.”

This was my first testimonial as an expert witness and it was a unique experience for me. It was also a positive result for poker. The case will be appealed to a higher court and we hope that it goes by the “predominance” part of the state statute. If so, look for the law to change where people can play poker in the privacy of their homes (whether online or live) without fear of criminal prosecution.

A special thanks to the Poker Players Alliance (PPA) for their support in this case. They helped fund the attorneys and expert witnesses in an effort to stand up for the rights of poker players. I also want to thank Bob Ciaffone (advocate for poker players’ rights) and Chuck Humphrey (expert on gaming law) for their efforts in coordinating the lawyers and expert witnesses for the case. The brief of amicus curiae put together by Tom Goldstein was fantastic. Everyone who enjoys poker owes them a tip of the hat, as they are all fighting for your right to play poker.

It was a fun four days in Charleston for me. Someone said, “Sexton’s a rock star!” I wouldn’t go that far, but I was appreciated by the defendants and the supporters of the case for being there. I was in the local papers and on television every day. One blogger from the courtroom wrote, “Everyone in that courtroom should have paid to hear Sexton’s testimony!” I must say, that was pretty cool. To that blogger and to Howard Lederer (for writing that paper), let me say, “Thank you!”

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