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Analysis: The UK Skill vs. Chance Case and the UIGEA

Analysis: The UK Skill vs. Chance Case and the UIGEA 0001

There has been much ado about the ongoing court case in the UK, where the question of whether poker is a game of skill or a game of chance is the central issue. While it has direct ramifications for Derek Kelly, owner of a private club and charged with hosting poker without a license, many have touted this as a landmark case for UK poker with application to our current conundrum with the UIGEA. While the decision in this case will be an interesting footnote in the legal decisions relating to poker, the specific construct of this case may narrow the scope of its impact.

The UK Specifics:

Kelly hosted poker games in a private club where in one case players had to pay a fee to participate and in another where the house took a fee from the winnings. According to the UK 1968 Gambling Act, a license is required to operate games of chance such as blackjack and roulette, but not games of skill like chess. Kelly's argument rests on poker being a game of skill, thus exempting him from the licensing requirement.

While skill and chance will be at issue, the big picture will not debate the legality of poker nor the preponderance of skill required to win at poker. The Gambling Act already states that games with any element of chance, even a minority, are considered games of chance under the statutes. And that while poker can be operated legally in the UK, operators that "take" from the game must be licensed and regulated for the protection of the players.

In the case against Kelly, Graham Trembath, QC, has stated to the jury that, "We would submit that, once these cards are shuffled, then you have introduced an element…of chance." Under such a tight construct, it's hard to imagine that Kelly will prevail. Equally hard to imagine is that the decision in this case will offer a clearer view of poker's status relative to our own UIGEA.

The UIGEA Skill vs. Chance vs. Consistency:

Because the UIGEA specifically legislates over games "subject to chance," poker players that understand the element, and potentially the preponderance, of skill required to win hold out hope that poker is not subject to the law. But unlike the UK 1968 Gaming Act, the UIGEA offers no guidance or definition of a game of chance. Does a game with a predominant skill factor fair better under the UIGEA? To some extent, it is the age old question of whether size matters and on this front, we still don't know.

The UIGEA skill vs. chance debate becomes even murkier when one looks at the carve-outs and exemptions under the law. Horse racing, fantasy football, state lotteries, and commodities trading are all exempt from the UIGEA, yet arguably are all subject to a high degree of chance; far higher than poker.

While the UK case may offer some nuggets of wisdom relative to poker's skill vs. chance debate, the construct is such that the result and impact will undoubtedly disappoint those hoping that it is the key to salvation for online poker's current UIGEA purgatory.

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