Physics & Poker—Lesson 2: Black Holes

May 30, 2010

One of the more fascinating modern scientific discoveries is the existence of black holes.  Black holes are superdense objects created from the gravitational collapse of sufficiently large stars (at least three times the mass of our sun).  Essentially, at some point, the star's fusion process runs out of the fuel necessary to maintain the thermal energy required to resist the gravitational force of its remaining mass.  The star then collapses back in on itself into a core known as a gravitational singularity, where the mass of the star essentially becomes infinitely dense.  Around the singularity is an event horizon, which marks the point where any particle or wave is unable to escape the gravitational field of the black hole.  Thus, the black hole is "black" because no light (including any form of electromagnetic radiation) can escape from inside the event horizon.


A significant implication is that it is impossible to ever directly observe a black hole from outside the event horizon.*  That's right, you will never see a black hole.  So, how does one observe a black hole?  Thankfully, due to the nature of black holes, scientists have developed several effective methods of observing black holes indirectly, essentially deducing their presence and properties by the black hole's effect on other, observable phenomena.  Some of these techniques include:
  • Gravitational lensing—Strong gravitational fields will cause light (including all electromagnetic radiation) to curve as it passes by a massive object.  In a way, the light trapped within a black hole's event horizon is simply light whose path has been curved by gravity to such an extreme that it bends completely back around on itself inside the event horizon.  Light passing a great distance from the black hole will be unaffected.  But light passing near the black hole will indeed take a curved path, and this curving can be detected by observing objects (such as stars or galaxies) that are out of their expected positions or by noticing multiple images of one object (known as a gravitational mirage).
  • Accretion discs—Black holes will attract gas particles, which will then form a disc spiraling into the black hole which can be observed directly.  Although many cosmic bodies can create an accretion disc, the presence of an accretion disc with no observable center object is indicative of a black hole.
  • X-rays—As gas is drawn into the black hole from the accretion disc, it will superheat, releasing energy, in particular X-rays, which can be detected.  In fact, this is one of the most energy-efficient processes ever observed, transforming up to 40% of the matter to energy.  This process occurs just outside the event horizon, enabling the x-rays to escape the black hole's gravitational field.  In many cases, the x-rays will be released from electromagnetic poles perpendicular to the accretion disc via relativistic jets (often shown on diagrams of black holes, such as those below).
  • Black hole binary star systems—In some binary star systems (where two stars orbit around a common point), one of the stars is a black hole which cannot be seen, but its gravitational effect on the companion star can be detected.  A famous example is Cygnus X-1.
  • Gamma ray bursts—These are short bursts of high energy radiation which occur when a large star collapses into a black hole after a supernova, or when two black holes or a black hole and a star collide to form a bigger black hole.
  • Quasars—Quasars are supermassive black holes at the centers of young galaxies that emit a high volume of x-rays from a large accretion disk.
  • Gravitational waves—Fluctuations or distortions in space-time are caused by the movements of certain massive objects, including black holes, and those distortions then ripple out from the object.  Although the techniques are still experimental, scientists hope to eventually detect black holes by detecting gravitational waves.


So, what do black holes have to do with poker?  Well, other than the obvious analogy that poker seems to suck all of the interpersonal skills and human decency out of the souls of some players ...

Black holes came to mind during my last live poker session because of the concept of indirect detection.  I sat down at a 2/5 NLHE table, and there were a few regulars as well as a few players I did not know (which is rather unusual for the Meadows ATM).  Two of the regulars are players whose games I respect.  One is rather loose preflop, the other is rather tight, but both players are solid postflop players, aggressive when possible, cautious when necessary, but rarely putting chips into the pot without a good reason.  Early on, I was fairly card dead, so I wasn't playing a lot of hands.  However, by watching the two players I did know, I got a feel for the table.  Two of the newbies could be bullied.  One was a calling station.  Most importantly, there was one newbie with a bigger stack who was given respect by the players I knew.  When this newbie played a hand, the regulars showed respect to his bets and raises, and never made moves on him.  Clearly, then, two players who I respected felt that this newbie was a solid player and stayed out of his way. 

So, about an hour into the session, I found AQ on the button.  Limped to me, I made a standard raise, solid new guy was the only caller in early position.  Flop was A-K-Q rainbow.  Yahtzee!  New guy checked, I bet 1/2 pot, new guy check-raised for 3x my bet, his standard raise.  Now, there are some players who check-raise that flop with any two cards, hoping I have a pocket pair under the board.  But given that the regulars respected him, I was worried about the check-raise.  A hand that limp-called preflop out of position, then check-raised the flop could easily be something like AK or QQ, possibly JTs.  There weren't many hands a tight player would play that way that I could beat.  I finally laid it down, deciding there were softer spots at the table.  Though I rarely do it, I mucked face up, and the newbie smiled and obligingly showed AK.

So, even if you don't have personal history with a player, you can still get a read on him from observing how he interacts with other players, and how other players react to him.  Also, a cool way to deal with table d-bags is to throw them into a black hole.


 ----------------------------------------------
* It's also pragmatically impossible to observe a black hole from inside the event horizon, even setting aside the impossibility of ever sending a signal from inside the event horizon to anyone outside the event horizon to describe any observations that might be made.  As an observer crossed the event horizon, he would be destroyed as gravitational tidal forces caused spaghettification—essentially, if falling feet first, his feet would be accelerate faster than his head due to stronger gravitational forces, causing his body to be stretched and eventually ripped apart.  However, all the observer's matter would eventually join the singularity, which would be a rather cool way to go, if you ever get to pick the way you go.

Take the red pill! ... There's more to see ...

Friday Fun (v. 1.2)—
Drinkin' My Cougar Goodbye

May 29, 2010

Before anyone protests, yes, I know this is Saturday.  However, because this is a holiday weekend, Saturday is the new Friday. Plus, it's my blog, and you should already expect random absurdity.  If foolish inconsistencies bother you, go read the Poker Grump.

* * * * *

As a service to my male readers who have an interest in women of a certain age (or female readers of that age who are "on the prowl"), it appears there is now a website devoted to helping in the hunt:  CougarLife.com.  However, it is critically important to distinguish between cougars and pit bulls.  For some reason, this news (the cougar site, not the pit bull bite) puts me in the mood to watch Ocean's 13 ...

* * * * *

This week, I learned about "crash blossoms", a term for headlines that are phrased in a manner that lead the reader to draw the wrong conclusion about the article following.  My favorite example:

McDonald's Fries the Holy Grail for Potato Farmers.
* * * * *

In keeping with this blog's purely educational purposes (trying to qualify as a tax-deductible organization here), I wanted to pass along this article about five civil wars that occurred in the United States that have been relegated to obscurity.  Making the list was the Honey War, fought between Iowa and Missouri in 1839.  Initially I suspected a hoax, but a little research reveals there was an actual militia conflict over the border between Missouri and the then-Territory of Iowa.  The history reported by the Iowa National Guard even details the weapons used, which included "a plough coulter [slung] over [the] shoulder by means of a log chain" and "an old-fashioned sausage stuffer".  Common mistake, bringing a sausage stuffer to a gun fight ...

* * * * *

Speaking of sausage stuffers (sorry, couldn't resist), the French Open is underway which offers a variety of attractive athletes doing ... something.  Gosh those tennis players are shiny!



Excuse me, back to the news.  Reason No. 537 why it's great to be Roger Federer—being paid to wear a $525,000 watch.  Must be a rough gig ...

* * * * *

On a more serious note, and in keeping with this post's wildlife theme (yeah, there is a theme, at least if I say there is a theme), let me recommend a new book by National Geographic photographer Joel Sartore:


Rare: Portraits of America's Endangered Species

Neatorama.com has an excellent write-up on the book, but the short story is that the book was a project to photograph some of America's endangered species and provide some information on each species' background.  In the preview on Neatorama.com, there are a number of sample pictures from the book.  Although there are a number of traditional "endangered animal superstars" (e.g., the black-footed ferret and the California Condor), I was intrigued by the Iowa Pleistocene Snail:
This Ice Age snail was known only in fossils until examples were discovered alive in 1972. The species persists on steep slopes in Iowa and Illinois where cracks in the limestone act as cool-air vents. Naturally air-conditioned at 15° to 50°F, these micro-habitats mimic Pleistocene conditions, but logging and erosion threaten change.

This is a true relict species, left over from an age when glaciers dominated North America. Today it can survive only in vents in the sides of a few hills in the Midwest. Hot air literally kills it, so moving these animals, even for a few minutes, is out of the question. The entire photo set up consisted of a flash, a macro lens, and a piece of white plastic stuck in a cracked rock. That they're the size of a pencil lead adds to the fun of trying to photograph them. - J.S.

Here's the video from Joel Sartore's website promoting his book, with some amusing moments, plus an adorable hedgehog (the video may take a few minutes to load, but it's worth the wait):


* * * * *

"Is that a seahorse in your nose or are you just happy to see me?"  To get the full story on these and other disturbing, absurd, hilarious, or downright bizarre ads, check out Copyranter.


* * * * *

Over at "While Drinking, I ...", StB recently solicited reader suggestions for his next drinking mixed tape, errr, CD.  Because he requested an off the beaten track country drinking song, I suggested "Drinkin' My Baby Goodbye" (song / lyrics) by the Charlie Daniels Band (more famous for "The Devil Went Down to Georgia").  Now, this song is near and dear to me for two reasons.  First, it's my go-to karaoke song for the extremely rare situations where I am forced to "sing" publicly (my voice is built for public speaking; my singing ability ranges from "terrible" to "disastrous").  Second, the song ends on the line, "If it takes all night, I'm gonna do it right, I'm gonna sit here 'til I can't see!" which always reminds me of my college buddy Todd's mantra for going out:  "We're going to drink 'til we can't see!"  The last time I heard that phrase, I was in Chicago with Todd, buddy Santa Claus, and several of Todd's fraternity brothers, doing shots of Jagermeister while "Getting Jiggy Wit It" blared from the speakers on the roof of some random apartment building we had stopped at for some irrelevant reason.  At some point in the evening's festivities, we ended up in a dive bar on Rush Street, playing Golden Tee with a pimp who took the occasional break to negotiate "dates" for his "lady friends".  The rest of the night is a bit of a haze, though I do recall a very late night trip to Weiner Circle for a hot dog with a side of foul language abuse, followed by a cab ride with Todd yelling "Faster!" and "Giddyup!" at the driver.  That night (actually the next morning) officially marked the moment when I realized that I—and my liver—were no longer 21.

Anyway, the video StB posted for Charlie Daniels was pretty lame, so I took it upon myself to find a better video.  Now, I have the following sight seared into my retinas, so obviously I am required to subject y'all to the same optical torture.  Let's just say the video is what might result when a Broadway choreographer goes on an absinthe-drinking binge, and tries to create Kung Fu Hustle II:  Hoedown on Brokeback Mountain.  Enjoy!

Johnny Cash is line-spinning in his grave.

For my readers who have never enjoyed the glorious martial-arts-meets-Michael-Jackson-video masterpiece that is Kung Fu Hustle, here's a little taste of what you've been missing:


All the cool kids join the Axe Gang!

Take the red pill! ... There's more to see ...

Recapping Oral Arguments In
Rousso v. State of Washington

May 28, 2010

Thursday morning, the Washington supreme court heard oral arguments in Rousso v. State of Washington, the legal challenge to Washington's ban on online gambling.  Interestingly, the man who brought the challenge, Lee Rousso, argued the appeal on his own behalf (he is also a Washington attorney).  Also, Rousso chose to split his argument time (each side gets 30 minutes total) with an attorney for the Poker Players Alliance (PPA), which had filed an amicus curiae brief. You can watch the entire argument, which clocks in at just over an hour:
 

Full length video of oral argument.

Below the jump I will discuss the arguments raised by the attorneys, the court's questions to the attorneys, and what I think it all means for the case's likely outcome. There will be several snippets of the argument embedded in the post below the jump, which I think were key moments in the argument. Be warned that the embedded videos seem to load slowly, apparently due to technical limitations at tvw.org (Washington's state public TV network). You will need to give the videos a few minutes to load, and may need to refresh the page to get particular videos to reload.


Now that you've joined me for the full-length discussion, let's talk law. Neither side raised any significant new arguments not previously raised in the briefs they submitted to the court.  Overall, I thought Rousso presented a solid argument focusing primarily on the concept of protectionism—specifically, that the online gambling ban favored in-state brick-and-mortar casinos and card rooms over out-of-state or international internet gambling sites.  The difficult questions for Rousso focused on the idea of regulation if the state online gambling ban were struck down.  The court expressed concerns about who—if anyone—would regulate internet gambling.  In a key exchange with Chief Justice Barbara Madsen, Rousso makes the point that internet poker rooms are in fact already regulated, simply by foreign governments.  With a nice rhetorical flourish (the good kind that drives a point home to an audience), Rousso declared:

It's not the Wild, Wild West out there with respect to internet poker.

Rousso discusses the state's need to regulate
online gambling with the Chief Justice.

Following up on this point, Justice Richard Sanders seemed worried that Washington would be unable to protect its legitimate regulatory interests by merely trusting that internet gambling sites might or might not be subject to some variable degree of oversight in a foreign country.  However, the justice did indirectly express some skepticism about the state's claimed need to ban online gambling, phrasing the state's claim as a "prohibition of internet gambling for the benefit of all these people in this court room, whether they know it or not."  In any event, I thought Rousso's response to this concern was rhetorically brilliant.  First, he acknowledged the need for regulation of online gambling, essentially granting the state its premise that the public needs some degree of protection in the realm of internet gambling.  But Rousso then pivoted and suggested that such regulation of an interstate and international commercial enterprise is best left to Congress.  Here is the key part of Rousso's exchange with the court:
The issues you raise are legitimate ones. People have concerns about the integrity of internet poker. The people in the internet poker community have a strong interest in the integrity. But I think if ... we're dealing with corporations that are domiciled overseas, it's the job of Congress [to regulate online gambling].

Rousso throws Congress under the online gambling bus.

To my ear, this argument seems fairly straightforward and compelling.  If the court is worried that online gambling will be unregulated if they strike down Washington's statute, they can be assured that most online gambling at this point does have some degree of regulation, and if that regulation is insufficient, then Congress can step in and impose national regulatory standards.  I think this argument will be aided by an amicus curiae brief filed by four poker players (whose connection to the PPA is unknown to me) which detailed the online poker regulatory schemes of several foreign countries, as well as proposed regulations pending in Congress.  Frankly, I wish Rousso's briefs to the court would have focused more on this "Washington needs to step aside and let Congress regulate online poker" meme, as it feels (to me at least) more compelling than Rousso's dominant argument in his briefs that the Washington legislature was acting to unfairly protect brick-and-mortar card rooms from online competition.

Following Rousso's argument was Thomas Goldstein, an attorney from the well-respected national Akin Gump law firm, arguing for the PPA.  Goldstein was easily the attorney best-versed in the nuances of Dormant Commerce Clause analysis, and was also the attorney with the smoothest presentation style.  Nonetheless, I felt his performance ultimately was the weakest of the three attorneys, doing little to build on the solid foundation laid by Rousso, while in places actually undermining Rousso's argument.

Goldstein stumbled right out of the gate, by suggesting that the PPA's argument was "more modest" and less "robust" than the argument made by Rousso.  Where Rousso had argued a facial challenge to the internet gambling statute, arguing that the state had no right to regulate online gambling at all, the PPA's position was an as applied challenge, contending that the state could prohibit internet gambling if it could prove that it could not effectively regulate online gambling:
When Washington makes the decision to legalize, for example, regulated poker, it has to either prove that it can't regulate it over the internet, or it has to regulate it over the internet.  That is the discrimination.
Now, this is actually a fine Dormant Commerce Clause argument, but Goldstein, representing an amicus curiae, has no standing to advocate positions not raised by the parties themselves (this rule prevents special interest groups from looking for controversial appeals and then hijacking them for their own purposes under the guise of serving as a "friend of the court").  Two of the justices jumped on Goldstein almost immediately about this issue, and he correctly retreated, casting his comments as simply augmenting the argument made by Rousso.  However, in several spots, Goldstein indirectly returned to the idea of an "as applied" challenge by suggesting that the court needed to remand the case to the trial court for an actual trial or hearing on whether Washington could effectively regulate internet gambling.  The state's attorney, Jerry Ackerman, would note in his argument that neither party has ever contended that such a trial is necessary, which was a subtle jab at Goldstein's overreaching argument.

As his argument developed, Goldstein continued to hamstring Rousso, by declaring that the PPA's position is that Washington state has the power to regulate online gambling sites, even those based overseas.  In contrast to Rousso's position that internet gambling sites may be regulated in the United States only by Congress or not at all, the PPA contended that Washington could require out-of-state or overseas internet gambling sites to be licensed and regulated by the state.  Although this is probably an easier argument for the court to accept, it has a big hitch—if the court strikes down the internet gambling ban, there are no regulations in currently in place applicable to online gambling.  The result of such a decision might conceivably be the return of a "Wild Wild West" scenario, which the court will be reluctant to create.

Turning back to the Dormant Commerce Clause argument, Goldstein's main point was that, where the state has authorized one form of gambling in a brick-and-mortar context, then the state can't discriminate by banning exact same game being offered on the internet.   However, the chief justice specifically noted that Goldstein's argument implied that games beyond poker might be legalized in the online context under Goldstein's reasoning, and Goldstein confirmed that any game authorized by the state—for example, blackjack—would have to be authorized online.  As I noted in my prior analysis of the case, this implication that striking down the online gambling ban will have results far beyond poker and potentially legalize online versions of any casino game permitted by the state is a big hurdle for the court to jump.  Goldstein's use of blackjack as an example seems to be a misstep; he would have been much better off limiting his argument to poker.

Goldstein did finish on a strong note, however, by correctly pointing out that this case carries implications beyond the context of online gambling:
This case is about internet commerce, not about gaming.  The rule you articulate here will apply to everything the State wants to permit to happen inside its stores inside the State of Washington and forbid on the internet.  And that's a tremendously consequential point beyond the four corners of poker.
The court seemed to pick up on this point, and posed several tough questions to the state's attorney, Jerry Ackerman, during the early part of his argument.  Altogether, despite a rough start and a few missteps, the last part of Goldstein's argument really did seem to score some points with the court:
Goldstein discussing the big picture implications
of internet regulation with the court.

Because his argument time was undivided, Jerry Ackerman had a lot more time to make points with the court during his argument on behalf of the state.  In the Betcha.com case heard by the Washington supreme court immediately prior to the Rousso argument, Ackerman had given a masterful, polished, and persuasive argument that an online sports betting site was engaged in illegal bookmaking, even when the site gave bettors an option to "welch" on their bets against other players.  By contrast, Ackerman seemed less in command during the Rousso argument, though that is likely a function of receiving significantly more difficult questions from the bench.

Ackerman started his argument by pointing out that poker is gambling under Washington law.  He cited to a statute that indicates that any game where chance is a material element is gambling, even if the skill of the player can affect the outcome.  This explains why the PPA's patented "poker is a game of skill" argument was not advanced, at least not directly (though Rousso and the PPA made allusions to the point in their briefs and arguments).

Justice James Johnson then began a series of questions directed at the Dormant Commerce Clause issue.  Justice Johnson seemed inclined to agree that the internet gambling ban discriminated against out-of-state online gambling companies, and wanted to explore the state's justification for an outright ban on internet gambling instead of a legalization and regulation approach.  Justice Johnson noted that brick-and-mortar gambling has become common in Washington (a sentiment later echoed by Justice Gerry Alexander), and inquired as to why the ubiquitous nature of casino-based gambling in the state didn't undermine the state's claim that prohibition of poker was needed to prevent a number of social problems.  After citing a number of studies related to the purported detrimental impact of online gambling, Ackerman used a question from Chief Justice Barbara Madsen to pivot and remind the court that the statute at issue bars all online gambling, not just poker, the implication being that overturning the statute would permit online gambling other than poker.  However, once he turned to a discussion of the "parade of horribles" that would result from permitting this expansive version of legalized online gambling, he couldn't resist a rhetorical flourish of his own:
Internet gambling is the crack cocaine of gambling, because it makes it so easy, so readily available, so easy to digest.
However, Justice Gerry Alexander broke in, and inquired whether the mere advance in technology was enough to distinguish online gambling from traditional gambling:
You say those things [about the perils of online gambling].  It's sort of a generational thing.  I mean, the same argument could be made about email—we shouldn't have email because it's so instant, we should go with U.S. mail, take our time, write letters. ... I think we've got to get modern here.
Ackerman's response was essentially that online gambling has been studied, and the problems associated with online gambling are different in degree and kind because of the peculiar nature of the availability and immediacy of the internet experience:
Ackerman discusses the perils of online gambling,
facing skeptical questions from the bench.

In response to questions from Justice James Johnson and Justice Richard Sanders about whether his position would permit discrimination in other lines of commerce such as barring internet shoe sales to protect in-state shoe shops, Ackerman took the opportunity to refer to a case, Brown & Williamson v. Pataki, in which the Second Circuit Court of Appeals (a federal court) upheld a New York statute which barred internet sales of cigarettes, even though cigarettes can be sold in in-state brick-and-mortar shops.  The importance of this case is that the court held that the method of delivery of the product meant that the two businesses were not "similarly situated", and thus the state could ban one method of sale without discriminating for purposes of the Dormant Commerce Clause analysis.  Thus, Ackerman contended that poker in a brick-and-mortar setting is not the same as poker on the internet because the method of delivery of the gambling product is fundamentally different.  Though he did not develop the point, the Brown & Williamson case also implies that courts will be more deferential to state legislatures when they regulate traditional vices.

Toward the end of Ackerman's argument, Chief Justice Barbara Madsen again asked if Rousso's "facial challenge" to the online gambling ban meant that the statute barred online gambling that was not legal even in the Washington brick-and-mortar casinos.  The import of this question is that overturning the statute on a facial challenge means that the statute cannot be applied at all to prohibit or regulate any form of online gambling; by contrast, a successful "as applied" challenge directed to internet poker would be limited to legalizing online poker, while leaving a ban on other forms of online gambling in effect.  Most of the Chief Justice's questions seemed to be in this same vein, expressing a hesitation to endorse a sweeping ruling invalidating a ban on all online gambling, particularly forms of gambling not legal in the state's brick-and-mortar casinos.

During the final series of questions in Ackerman's argument, Justice Debra Stephens (who was a particularly active participant in the prior Betcha.com argument) asked if the gambling context of the Rousso case had any impact on the proper Dormant Commerce Clause analysis.  Ackerman understood the concern suggested by the question—are regulations of vices reviewed under a more lenient standard than regulations of "ordinary" commerce?—and contended that online gambling is barred by federal law (citing 22+ prosecutions under the Wire Act) as well as by every state (probably true if one assumes gaming unregulated by a state is illegal, as no state has explicitly legalized online gambling).  Ackerman then argued that the Dormant Commerce Clause is not violated by laws barring universally illegal activities:
When you have no lawful commerce that can be burdened—think heroin trafficking—then the Dormant Commerce Clause has no application to what's taking place.

Ackerman completes the parade of horribles trifecta:
Online gambling corrupts kids like crack cocaine and heroin.
However, he missed the easy bonus points for invoking,
"The terrorists will win if this law is struck down." 

In his brief time for rebuttal, Rousso faced questions from the bench related to the state's claimed interests in preventing the evils associated with gambling.  Rousso started with a strong dissent from the state's assertion that a prohibition of online gambling was the only reasonable solution:
I think the position taken by the State is that this [online gambling] is a Leviathan that cannot be regulated.  And that will be the State's position until such time as it decides it wants to tax it.  And once it decides they can tax it, I assure you the State will decide immediately that it can, in fact, regulate this.

Rousso calls the state's bluff on the need for prohibition.

Justice James Johnson then turned the conversation to organized crime.  He questioned Rousso whether the state had any interest in preventing online gambling from being used by organized crime or terrorists to fund their operations.  Rousso again had a solid (if not entirely convincing) libertarian argument:
The way you eliminate crime from gambling is to make it legal.  And that's how you got rid of organized crime in Las Vegas—you made it legal.  If you want to get rid of crime in gambling, you make it legal, regulate it, tax it.  Crime goes away.

Rousso makes the Washington Supreme Court
an argument it can't refuse.

Note that a few seconds into his response, Rousso stated that the federal Wire Act was enacted to combat organized crime, and Justice Johnson interjected his agreement with that contention.  Overall, Justice Johnson seemed the most supportive of Rousso's position, although he may just have been playing devil's advocate to see how the attorneys would respond to questions probing the validity of the law.  More likely, Justice Johnson, along with Justices Sanders and Alexander, see some merit to Rousso's position.  Those three justices expressed some skepticism of the state's claim that it could not regulate and could only prohibit online gambling to accomplish its goals of protecting the state's citizens from the evils of gambling.  These justices also seemed troubled by the state's apparent hypocrisy given its close relationship with an extensive network of legal, regulated brick-and-mortar casinos, and seemed to view the internet as merely a more modern method of commerce, rather than a wholly new form of gambling.  However, just because a particular justice is sympathetic to a party's position doesn't mean that justice will ultimately vote in favor of that party on the merits.  It is not at all uncommon for a court to uphold a challenge to a law by essentially stating, "We disagree with the law, but it is the legislature's role to make policy decisions like this, and absent some compelling reason, we won't interfere with the legislature's decisions."

On the flip side, I think Chief Justice Madsen and Justice Stephens are unlikely to vote to overturn the online gambling ban.  Both of those justices seemed concerned that striking down the law would allow a wide array of online gambling (including gambling not authorized for Washington's brick-and-mortar casinos) to occur in an unregulated environment.  These justices seem more likely to endorse a middle way, such as the PPA's "as applied" challenge targeted only to striking down the law as applied to internet poker, not online gambling as a whole.  It's possible the court could rule that the statute is consitutional in general, but find that it may not be valid as applied to poker (or other games authorized by the state).  In that case, the court could either remand the case to the trial court for a hearing or trial on the state's need and ability to regulate or prohibit online poker, or it could simply decide the issue based on the record in front of it, despite the fact Rousso disavowed an "as applied" challenge.

Finally, the court may simply find the online gambling ban to be constitutional both facially and as applied to poker.  Although the justices may have some skepticism as to the state's claims regarding the reasons justifying an outright ban on online gambling, the court could decide that the state's claims are sufficient to meet a constitutional challenge, and let the legislature ultimately decide whether, when, and how to go about legalizing internet poker specifially, or online gambling in general.

I still think that Rousso's chances for success are a longshot, but I would say that oral argument certainly helped him frame the case in the most effective light for his position.  Despite Rousso's solid performance in court, ultimately this case requires the court to take a big step in striking down a law regulating gambling, an area where legislatures historically have enjoyed wide latitude and nearly unlimited discretion.  However, even if the court ultimately rejects his argument, Rousso certainly left the courtroom with the justices giving his argument serious consideration.  It will be interesting to see how the court rules.

Take the red pill! ... There's more to see ...

Poker's Terrible, Horrible, No Good,
Very Bad Year (Part 2 of 2)
Rousso v. State of Washington

May 24, 2010

WARNING & SYNOPSIS:  As you may recall, Part I of this post reviewed developments in poker litigation in New York, Massachusetts, Pennsylvania, and Colorado.  Let's now turn our focus to the Pacific Northwest, where this Thursday, May 27, 2010, the Washington supreme court will hear oral arguments in Rousso v. State of Washington.  The Poker Players Alliance (PPA) is even planning a rally outside the court to commemorate the event.  The PPA's rather overwrought press release announcing the rally invokes false claims that the state online poker ban is a crime equivalent to child pornography and drug dealing, not particularly effective rhetoric, at least to my ears.  But then again, the PPA has always been an ad hoc amateur-hour sort of outfit, so I guess I shouldn't be surprised.

This post will dive into the legal arguments being made in the constitutional challenge to Washington state's outright ban on online gambling.  Because I happen to be a lawyer who does a fair amount of appellate work (indeed, it may be the only thing in the world I'm good at, other than crAAKKing premium hands), this post will be rather lengthy and quite possibly boring.  Read on after the jump if you want to get a better feel for the legal arguments that the Washington supreme court will be considering.  If you want my detailed opinions about the case without the boring legal talk, you can jump to the "Analysis" section at the end of the post (also after the jump).  If you prefer that I just sum up, it's my opinion that the Washington supreme court will turn down Rousso's challenge and find that the state's ban on online gambling is constitutional, because the implication of Rousso's argument is that the state would be required to legalize and regulate not merely internet poker, but all forms of online gambling, and that's a result I can't see a state court endorsing.  Also, the Washington supreme court will likely accept the state's claims that the online gambling ban is necessary to protect against problem gamblers, underage gamblers, money laundering, and crooked games (much as I suggested might happen in a recent post about poker's association with some unsavory folks).  You're now excused from the remainder of this post.


* * * * *

BACKGROUND:  The Rousso case is different than the "poker is a game of skill" challenges seeking court rulings that poker is not covered by various states' gambling laws.  Instead, Rousso is a constitutional challenge to Washington's explicit ban on online gambling, grounded in a Commerce Clause argument.  Essentially, Rousso is challenging the state's online gambling ban by claiming the ban interferes with interstate commerce by unfairly favoring Washington state brick-and-mortar casinos over online gambling sites based in other states or overseas.  Although Rousso's argument is predicated on legalizing online poker sites, note that the statute and his argument really apply to all online gambling, not merely poker.  This is an important point for the analysis of this particular constitutional argument.


THE APPELLATE PROCESS:  Before analyzing the legal arguments, let's take a quick look under the hood at how the appellate process works.  A quick browsing through the Washington rules of appellate procedure reveals a fairly typical state appellate court system.  The Rousso appeal took a standard path to the state supreme court, beginning with a trial court ruling on summary judgmenti.e., a ruling by the trial court judge that the facts are undisputed and the dispute can be resolved merely by interpreting and applying the proper law.  In Rousso, the trial court ruled that the statutory ban on internet gambling was constitutionally valid.  The case was then appealed, and considered by a division of the state court of appeals, which affirmed the trial court decision.  Rousso again appealed to the state supreme court, which has the discretion to deny further review (leaving the court of appeals decision in force as the final decision), or to grant further review, which it did in this case.  In mundane legal appeals, the grant of further review is often a strong hint the supreme court intends to reverse the lower court in some fashion, or to resolve conflicts among different panels of the court of appeals.  In Rousso, however, the case raises a significant constitutional law issue, so the mere fact the state supreme court granted further review gives no insight into how the court views the case; the supreme court will generally issue a ruling in all significant constitutional law disputes, even if they agree with the court of appeals' decision.

The oral arguments this week in the Washington state supreme court are simply the final step in the appellate process. To this point, the parties have filed briefs (lengthy written arguments explaining their contentions as to the appropriate legal analysis of various issues) and engaged in oral arguments before the trial court and court of appeals.  The briefs and arguments at each stage remain fairly consistent, although the briefs and arguments at the appellate court level will generally be more detailed, and will also respond to the trial court's ruling.  The state supreme court will review the same briefs as submitted to the court of appeals, as well as supplemental briefs filed by the parties responding to the opinion issued by the court of appeals (in the next sections, I'll dive into the court of appeals' decision and the parties' supplemental briefs so you don't have to).

By the time oral arguments begin, the justices will have read the parties' briefs and likely formed an impression of which side has the stronger position, as well as the weaknesses or concerns raised by each side's arguments.  During the arguments, the attorneys take turns making presentations of their view of the case to the justices, but are frequently interrupted by questions from the justices.  In fact, as an appellate attorney, I welcome as many questions as possible, as a "hot bench" indicates the court is interested in your case, and the questions posed give an opportunity to read the court's concerns with your position and enable you to focus your argument on those points.  General categories of questions attorneys get from the court include:
  • Fact questions—Clarifying an important factual point; e.g., "Have any online gambling sites been charged with violating this statute?"  There probably won't be many, if any, of these questions.
  • Procedural questions—Clarifying whether the proper objections were lodged, motions made, etc. to allow the court to consider the appeal; e.g., "Did Rousso abandon alternative arguments asserted in his petition?"  There likely will be none of these questions.
  • Analytical questions—Clarifying how a party thinks a particular constitutional provision, statute, regulation, common law rule, or prior case decision should apply to the pending appeal; e.g., "Has Congress preempted the regulation of internet commerce in general, in the particular case of gambling, or neither?"  There will be many questions of this type.
  • Policy questions—Clarifying how adopting one result or another, or applying one line of analysis over another, will have practical effects for law enforcement, businesses, or the public at large; e.g., "If we find this law is unconstitutional, will foreign-based online sites be able to offer unregulated sports wagering or blackjack in addition to poker?"  There will be many questions of this type.
  • Rhetorical (softball / hardball) questions—Questions designed primarily to make a point to the other judges on the panel, whether in favor of or against your position; e.g., "Counsel, doesn't the state have a compelling interest in preventing gamblers from being cheated?"  The correct answer for both sides is, "Durrr, yes, your honor."  But, note how a softball question for the state is a hardball question for Rousso; the state gets a chance to wax poetic about the evils of online gambling, while Rousso gets knocked back on his heels and has to defend some of the ugly truths about online gambling.  The prevalence of these types of questions depends a lot on the nature of the issues in dispute as well as the temperaments of the judges.  As an attorney, you absolutely must be ready for these questions, looking to knock the softballs out of the park, while at least trying to turn the hard pitches into something positive for your case.  In our example here, Rousso could use the question to pivot to a point about the benefits of the state regulating online gambling rather than allowing it to be a Wild West atmosphere.

In my experience, oral argument really only tips the scales in close cases.  A brilliant oral argument can't save a bad case, while a terrible argument will only rarely sink a strong case.  But in close cases, oral argument lets an attorney get a sense of the court's concerns about his position, and gives him/her an opportunity to address those concerns head on (while taking a few shots at the other side when possible).  Frankly, a good oral argument is the most exciting 30 minutes of my job.


THE COURT OF APPEALS DECISION:  The court of appeals decision is really the starting point for this case, with the state having an edge with that decision in its pocket.  Technically, the supreme court reviews a constitutional law claim de novo (without deference to the court of appeals decision), but in reality, a well-written court of appeals decision can add some persuasive weight to the prevailing party's argument.

The court of appeals started by analyzing the threshold question of whether Congress has explicitly or implicitly regulated online gambling.  If so, then a state can only limit or regulate online gambling to the extent such regulations are consistent with and do not interfere with federal law.  However, Congress can also explicitly authorize states to regulate certain types of commercial activities.  The court rejected the state's argument that Congress had authorized states to regulate online gambling by passing the Wire Act and the UIGEA.  The court noted that the Wire Act had been passed well prior to the advent of the internet, and thus could hardly be an explicit and unambiguous authorization by Congress of the state's right to regulate inline gambling.  As for the UIGEA, the court noted that the statute merely regulated use of internet payments in conjunction with gambling deemed illegal under state law; the gambling violation itself need not occur on the internet to serve as a predicate act for a UIGEA violation (the court used the example of using a PayPal account to pay off a wager made with a traditional sports bookmaker).

The court then turned to what is known in constitutional law as the "Dormant Commerce Clause" analysis.  The Dormant Commerce Clause refers to state regulations made pursuant to their inherent "police powers" which might infringe on interstate commerce even in the absence of Congressional regulation.  In this context, "police powers" is not necessarily a reference to criminal law, but rather is a broad reference to a state's authority to enact regulations for the "general security, health, safety, morals, and welfare" of its residents.  Classic Dormant Commerce Clause violations occur when a state enacts a law purportedly for safety reasons, but with the intent or the effect of favoring in-state over out-of-state businesses.  For example, a state regulation requiring all meat to be inspected by a state inspector prior to sale appears to have food safety as a goal, but in reality the law discriminates against out-of-state meat processors. 

In this case, Rousso argued that the purpose of the internet gambling ban was a barely disguised attempt by the legislature to protect Washington's in-state brick-and-mortar poker rooms from online competition.  The court rejected this argument, noting that the Washington online gambling ban is "neutral in its application", meaning that the law would apply equally to ban online gambling services offered by Washington-based gambling sites:
There are various problems with Rousso's proposed analysis. The first, and most obvious, is that the gambling act amendments are facially neutral--they apply equally to gambling information transmitted over the Internet whether such transmission occurs solely between Washington residents or businesses, or instead occurs between Washington residents or businesses and residents or businesses located in other states or countries. In other words, Rousso would be equally guilty of violating RCW 9.46.240 were he caught playing Internet poker with Spokane residents on a web site owned by a Seattle business and hosted on a Tacoma server as he would be were he caught playing poker on Pokerstars (a non-U.S. corporation) with residents of Minnesota, Montana, and Moldova.

This is an important point for Commerce Clause cases, as it makes it substantially more difficult to argue that there is a hidden agenda to benefit in-state businesses.  In cases where the challenged law is truly neutral in application, the law will only be found unconstitutional if the law is found to be an excessive burden on interstate commerce when balanced against the state's legitimate interests.  In this particular case then, the court has to weigh the state's interests in regulating online gambling against the negative effect those regulations have on interstate commerce.

At the outset, Rousso tried a version of the PPA's "poker is a game of skill" argument, contending that poker was never intended to be part of Washington's historical antipathy for gambling.  The court rejected this argument, finding (unsurprisingly) that Washington has long regulated gambling. In fact, the court specifically noted in its analysis that Washington's gambling laws define "gambling" to include any game where chance affects the outcome to a "material degree", even if skill plays a role in the outcome.

Further, the court noted that the legislature's stated purposes for enacting the ban included updating the state's general anti-gambling laws to include advances in technology, and to better protect the public from the evils associated with gambling, including its association with organized crime.  The court found that these interests were legitimate, and that regulation of the Internet was necessary for the state to accomplish its goals:
Put simply, Washington has a longstanding and legitimate interest in tightly controlling gambling. That interest is a pure exercise of the traditional police power and is justified by the State's desire to safeguard its citizens both from the harms of gambling itself and from professional gambling's historically close relationship with organized crime. The next two questions, then, are (1) whether, given the significance of this interest, the addition of the term "internet" to the gambling act creates a burden on interstate commerce that is "clearly excessive" and (2) whether the State's interest can be equally well accommodated by less restrictive regulations.

Addressing the second question first, it is doubtful that the State can effectively address the problems associated with Internet-based gambling without regulating the Internet itself. For example, it is questionable whether the State has the ability to effectively prevent underage Washington residents from Internet gambling without directly regulating the transmission of gambling information; to do so would require the State to discern when residents are engaged in gambling over the Internet (likely from within their homes), and further discern the age of the gambler--all without violating residents' privacy rights. Similarly, it is doubtful that the State can effectively monitor Internet-based criminal behaviors that are traditionally associated with gambling--for example, money laundering--if it is precluded from enacting any regulation that touches upon the Internet.

Thus, the court determined that the case turned on the question of whether the ban on online gambling placed an excessive burden on interstate commerce.  Here the court noted that the state had banned certain forms of email spamming activities, and that the law had been found to be constitutional against a Commerce Clause challenge.  Further, the court found that companies involved in internet commerce are able to identify the state where a computer is geographically located from its IP address, and are already required to comply with different laws in all 50 states.  Thus, requiring online gambling sites to identify computers in Washington and blocking them from participating in gambling activities is not particularly difficult and imposes only minor costs.

Finally, the court rejected Rousso's contention that the online gambling ban was somehow a novel or unique development in the law:
Here, the regulation is not excessive. Indeed, it is worth giving special attention to the fact that the prohibited conduct here at issue--the transmission of professional gambling information--has been forbidden since the initial passage of the gambling act in 1973. The initial act listed various technologies through which the transmission of gambling information was then prohibited, including "telephone, telegraph, radio, [and] semaphore." RCW 9.46.240. Rousso does not contend that transmission of gambling information through these media unconstitutionally impairs Congress's ability to regulate commerce.

Instead, he bases his case on the idea that the Internet, as a technological medium for transmitting information, is so novel that special rules apply to it, rendering unconstitutional any state law that subjects it to regulation. Put bluntly, this is a simplistic understanding of the technology at issue, which, at its core, performs precisely the same functions as the "telephone, telegraph, radio, [or] semaphore"--the transmission of information over distance--only does so more quickly, cheaply, and efficiently.

In other words, if it was acceptable for the state to ban gambling via phone prior to the advent of the internet without running afoul of the Commerce Clause, it is no big leap of logic to conclude it is acceptable to extend state gambling restrictions to the internet.  Thus, it is hardly surprising that the court ultimately concluded that the state ban on internet gambling was constitutional.


ROUSSO'S ARGUMENT & SUPPLEMENTAL BRIEF:   Rousso filed a supplemental brief with the Washington supreme court, which reiterated many of his points raised with the court of appeals, but also responds to points made by the court of appeals in its decision.  Rousso really makes two significant arguments.  First, Rousso asserts that the court of appeals' analysis was flawed because the court analyzed whether the ban on online gambling applied equally to both interstate and intrastate internet gambling, when the proper analysis in his view is whether the state's ban on online gambling favored in-state brick-and-mortar gambling over online gambling based outside the state (even outside the country):
While a number of issues were litigated below, the lower courts gave surprisingly scant attention to the one issue that towers above all others: does Washington's law benefit in-state business interests at the expense of out-of-state business interests or, more simply, is the statute protectionist in intent or effect? If this Court answers this question in the affirmative, as the petitioner believes it must, then all of the other issues litigated fall by the wayside and the statute must be stricken down.

The court below fundamentally erred by failing to consider the similarities between Internet card rooms and brick-and-mortar card rooms. This error led the court of appeals to address the wrong question: Rather than ask whether RCW 9.46.240 equally burdens brick-and-mortar card rooms (necessarily in Washington) and functionally equivalent Internet card rooms (predominantly operating in interstate commerce), the court of appeals instead asked whether the law would apply equally to in-state Internet card rooms and out-of-state Internet card rooms. By asking the second, inapposite, question, the court of appeals reached an incorrect conclusion.

Rousso's point here is that the ban on online gambling operates as a legislative tool to force Washington residents to gamble only in Washington-based casinos, or not at all.  If this legislative policy in fact functions primarily as a tactic for economic protectionism, then the statute violates the Commerce Clause and no further analysis or balancing tests are required.  As Rousso prefers to frame the protectionism debate:
[The court of appeals’] analysis completely sidesteps the question of protectionism and is premised on the assumption, unstated, that internet poker does not compete with brick-and-mortar poker, a proposition that every poker player in the world knows to be untrue. Put another way, Division I merely asked whether the statute favors in-state internet poker interests at the expense of out-of-state internet poker interests, which is on its face an irrelevant inquiry.

A more effective analysis would have asked the following four questions in sequence:

Question 1: Does Washington have an in-state poker industry?

Question 2: Do Washington residents have access out-of-state poker facilities?

Question 3: Do Washington poker players make a choice between patronizing the in-state poker facilities or their out-of-state competitors?

Question 4: Is this choice forced by the Legislature?

If all four questions are answered in the affirmative, the State is engaged in protectionism. As Division I [of the court of appeals] acknowledges, protectionist statutes are per se invalid under the Commerce Clause.

As an alternative argument, Rousso also addresses the balancing test analysis conducted by the court of appeals.  Rousso's primary argument here is that many of the purported social ills the state asserts will arise with legalized online gambling are speculative or not grounded in fact:
With respect to the "problems associated with Internet-based gambling," the State has not shown that any of these problems actually exist. FN25 The State has not, for example, shown that internet gambling exacerbates the rate of problem gambling, nor has the State shown that internet gambling preys on children. FN26 However, even if these problems did exist, a complete ban on internet gambling is not the least restrictive means of addressing the problems. To state the obvious, a scheme of regulation and taxation would protect the State's interest as effectively (indeed, far more effectively) as prohibition does. Likewise, if the State's interest is keeping minors from gambling on the internet, barring adults from gambling on the internet can hardly be considered the least restrictive means of obtaining the objective.

FN25 In the dozens of countries that have legalized internet poker, the social impact has been immeasurably small. The argument that states can rely on generalized claims of harm to avoid Commerce Clause restrictions was reject [sic] in Granholm v. Heald, 544 U.S. 460, 492 (2005), "In summary, the States provide little concrete evidence for the sweeping assertion that they cannot police direct shipments by out-of-state wineries. Our Commerce Clause cases demand more than mere speculation to support discrimination against out-of-state goods."

FN26 The State, and perhaps the Court, might be surprised to learn that virtually all internet poker sites bar players under 18 years of age and require that account holders provide government issued identification (driver's license and social security number) for age verification purposes. It is reasonable to believe that the number of minors in this state playing poker on the internet is approximately zero.

I would note that the Granholm decision cited by Rousso was a case near and dear to my heart, as the U.S. Supreme Court ruled that states which allow in-state wineries to ship directly to state residents must also allow out-of-state wineries to do direct shipments on the same terms.  The Granholm court rejected state arguments that the differences in rules were required to enforce age limits on purchasers and to enable more efficient tax collection.

Although Rousso's brief makes a number of additional points, I believe these two issues are the strongest arguments he has raised, and are two significant issues the Washington supreme court will need to address in its decision.  If Rousso loses on both of these points, it seems unlikely any of the remaining points he raised can save his overall argument about the constitutionality of the online gambling ban.


THE STATE'S ARGUMENT & SUPPLEMENTAL BRIEF:   The state also filed a supplemental brief, which spends some time trying to assert that Congress has explicitly authorized states to regulate online gambling, an argument rejected by the trial court and the court of appeals, and an argument I think is an uphill battle for the state.  So, we'll move on to the state's arguments on the issue it ultimately prevailed upon—the online gambling ban is a permissible use of the state's police power to regulate gambling, and does not impermissibly infringe on interstate commerce.

The state first argues that the online gambling ban is constitutional because it does not discriminate in favor of in-state brick-and-mortar casinos:
Washington specifically prohibits individuals and entities within this state from knowingly using electronic means of communication, including the Internet, to conduct gambling activities. RCW 9.46.240. It does so through an even-handed, non-discriminatory prohibition that applies to all electronic gambling communications, regardless of whether the communications are intrastate, interstate, or international in nature. Accordingly, as the courts below correctly held, Washington's prohibition on Internet gambling does not violate the dormant Commerce Clause.
....

The Court of Appeals also correctly rejected Rousso's argument that RCW 9.46.240 favors local businesses by protecting Washington's licensed card rooms from competition on the Internet. [cite]. Rousso's argument fails because, as the court observed below, the legislative history of the statute contradicts it. [cite]. In addition, it also fails because licensed, heavily-regulated brick-and-mortar card rooms are not similarly situated to unregulated, illegal Internet casinos.

The state then makes an argument that jumps off from this point about the regulation of its in-state brick-and-mortar casinos and pivots into a discussion of the evils the state is attempting to address with its ban on internet gambling.  After discussing the social costs borne by the state and its residents as the result of underage and problem / pathological gambling, the state turns to discussion of other issues justifying the online gambling ban:
Moreover, Internet gambling poses many regulatory challenges and risks that are not-present in the strictly regulated and controlled "brick and mortar" gambling operations that are legal in Washington State. Washington's gambling laws are based on a licensing model that requires all entities operating gambling businesses and, in many instances, their individual employees, to subject themselves to close state scrutiny and ongoing regulation. None of the normal regulatory safeguards can be effectively enforced against off-shore Internet gambling operations. [cite]. In addition, Internet gambling, like other forms of unregulated gambling, also provides fertile grounds for criminal activity, including organized crime. [cite].
….

In sum, Internet gambling, like other types of unregulated gambling activities, poses a significant risk to the health, welfare and morals of residents of the State of Washington. The solitary nature of Internet gambling exacerbates many of the problems traditionally associated with face-to-face gambling activities. The "virtual" nature of Internet casinos allows casino operators to escape financial accountability to their patrons and allows problem gamblers and other vulnerable individuals unlimited access to gambling activities without any restraint or limit, or possibility of intervention. Internet gambling, like other illegal gambling, is a magnet for organized crime, including traditional crime families and international terrorists. For all of these reasons, Washington State has a substantial local public interest in prohibiting gambling on the Internet. Given the foregoing, Rousso's assertion that RCW 9.46.240 impermissibly impairs the ability of individuals to engage in interstate commerce is without merit. [cite].

For the Washington supreme court to rule the online gambling ban is an unconstitutional restriction on interstate commerce, the court will need to find a way to address these policy concerns raised by the state.  In other words, the court will need to answer a very difficult question:  "How can you say the state has no right to prevent kids and addicts from gambling, and no right to prevent organized crime and international terrorists from using internet gambling to run crooked games and engage in money laundering?"  In essence, the state has pulled out its version of the famous, "If you do X, the terrorists win" argument. (As an aside, my favorite version of this argument was given by Ellen DeGeneres at the 2001 post-9/11 Emmy awards:  "We're told to go on living our lives as usual, because to do otherwise is to let the terrorists win, and really, what would upset the Taliban more than a gay woman wearing a suit in front of a room full of Jews?").


ANALYSIS & PREDICTED RESULT:  So let's cut to the chase—what are the chances the Washington supreme court will find that the internet gambling ban is unconstitutional?  If I were a gambling man—and I am—I would put the odds of Rousso winning at 45:1 against, the same odds posted by the Mirage on the Mike Tyson-Buster Douglas fight.  So, although Rousso has a puncher's chance of knocking out the state's online gambling ban, I think the state is a prohibitive favorite to prevail for four main reasons.

First, despite all the "activist judges" rhetoric surrounding U.S. Supreme Court nominations, courts are actually quite reluctant to strike down laws on constitutional grounds.  Instead, courts tend to defer to elected legislators.  A law has to be clearly out of bounds before most state supreme courts will step in to curb the legislature's actions.

Second, the court will almost certainly be aware of the news of potential federal legislation legalizing and regulating poker.  If the court feels the federal government will "solve" the online poker dilemma within a few years, the court may be reluctant to jump out ahead of the poker legalization train.  Also, the court may be reluctant to influence the poker legalization debate in Congress by issuing a precipitous ruling finding that online gambling is legal in Washington.  Such a decision would likely inflame both sides of the online gambling debate, and courts rightly are reluctant to be drawn into or used in a political dispute.

Third, Rousso's primary argument, that the online gambling ban is an unfair protectionistic statute, has two significant analytical flaws.  The first flaw in Rousso's argument is that the Granholm wine-shipping case cited by Rousso permitted states to ban direct shipping to customers altogether—whether the winery was in-state or out-of-state wasn't important, only that they were treated equally in terms of how they delivered their product to residents of the state in question.  Here, Washington allows only in-person gambling in brick-and-mortar casinos licensed by the state.  This law applies equally to residents of Washington, other states, and other countries.  If you want to gamble in Washington, it must be done in-person.  Similarly, if you want to offer gambling as a business, you must do it in a physical casino regulated by Washington.  This restriction applies equally to would-be Steve Wynns and Sheldon Adelsons who live in Washington, some other state, or some other country.  Rousso's argument essentially implies that, if a state allows alcohol to be purchased in liquor stores or prescription medications to be purchased in pharmacies, the state is required to allow direct shipping of alcohol or prescription drugs to consumers.  That argument doesn't hold water under Granholm, and frankly is illogical.

The second problem with Rousso's argument that the online gambling ban is unconstitutional protectionism is that his argument necessarily advocates for a broad-based legalization of all online gambling, not just online poker.  Rousso asserts that, because the state allows brick-and-mortar poker rooms, the state must permit online poker sites.  But, that exact same logic extends to all forms of gambling authorized by the state, because the statute is a generic ban on online gambling.  If the state is required to permit online poker sites to operate in the state because the state has brick-and-mortar poker rooms, where—and how—does the state draw the line?  By Rousso's logic, online versions of blackjack, craps, keno, and slots would all be beyond the state's ability to ban so long as they were authorized for brick-and-mortar casinos (Rousso does recognize exceptions for online sports wagering and lotteries as those games are explicitly regulated by federal law).  I find it highly unlikely the Washington supreme court will want to open this big of a can of gambling worms, no matter how sympathetic the court might be to online poker specifically.

The fourth and final reason I feel Rousso's challenge will lose is that his attack against a generic anti-gambling statute (even couched in terms of online poker) will run smack into the brick wall of the state's morality and social welfare argument.  Consider the difficulty Rousso will have in responding to questions from the court related to these topics:
  • Underage gambling—Rousso's suggestion in his brief that "It is reasonable to believe that the number of minors in this state playing poker on the internet is approximately zero", is laughable on its face.  Every year, ESPN's WSOP coverage seems to focus on the newest "young guns" to contend for bracelets.  A fair number of poker players just past their 21st birthdays have won WSOP bracelets or WPT tournaments (Joe Cada, Jeff Madsen, Gavin Griffin, Eric Froehlich, and Steve Billirakis leap to mind), and a greater number of other online wunderkinds (including notably Tom "durrrr" Dwan and Justin "ZeeJustin" Bonomo) also gained fame from playing at a young age.  Raise your hand if you truly think none of these "young guns" played poker online while legally underage.
  • Pathological gambling—Of course, there are always plenty of anecdotal accounts of devastating crimes, ruined families, and suicides associated with online gambling to rebut claims that online gambling poses no real risk for the state to be concerned about.
  • Crooked games & cheats—"Superuser" accounts, misappropriating player funds, multi-accounting, and collusion, ...  How many of these issues do you see in regulated brick-and-mortar casinos?
  • Organized crime & terrorism—Given all of the high-profile arrests for money laundering over the past year or so, who thinks a state court wants to be the institution that legalizes online gambling without any regulatory structure in place to prevent abuses by organized crime or terrorists?
The Poker Players Alliance (PPA) filed an amicus curiae ("friend of the court") brief in support of Rousso's position (hardly a shock since Rousso is also a high-profile member of the PPA).  Although the PPA parroted many of Rousso's arguments, the PPA did spend a significant amount of time arguing that Washington state could adequately respond to all of its morality and general welfare concerns about online gambling by merely legalizing and regulating online gambling rather than barring it altogether.  To me, this argument fails for two reasons.  First, states have long had great leeway to regulate and even prohibit gambling under their police powers.  I doubt a court will find any legal principle that requires states to legalize and regulate gambling, and as discussed previously, there does not seem to be any legal reason why the legalization of some forms and manners of gambling requires legalization of all forms and manners of gambling. Second, and perhaps a key point, the PPA fails to explain why many online gambling sites—including most of the major online poker sites—have seen fit to base their operations out of countries or in jurisdictions with notoriously lax regulatory oversight.  I think a state like Washington could express valid concerns about their ability to adequately regulate online gambling sites based in such overseas jurisdictions, while also noting that issues such as underage gamblers, cheating, money laundering, etc. are much easier to regulate in a brick-and-mortar casino context.

As I close, let me be clear that I personally believe online poker should be legalized and regulated.  I think a compelling case can be made that online poker is different than other forms of online gambling, and that a regulatory approach makes more sense than the current de facto prohibition that is widely ignored.  But, I think poker players need to realize that mounting legal challenges to gambling laws in court is a strategy doomed to failure. Court challenges might be a sexy way to generate publicity and whip the online poker community into a frenzy, but repeatedly losing court challenges at the appellate level—where it matters—only creates bad publicity and bad legal precedents. Regardless of the intellectual merits of the legal arguments being made, the pragmatic reality is that these cases are asking the courts to make a bold stand against gambling laws, and there is simply little political motivation for courts to make that big of a lift.  Poker players need to stop making bad case law, and start focusing their attention on lobbying legislators to explicitly legalize online poker and implement a reasonable system of regulation (and yes, taxation) to permit poker to grow as a legitimate business.

Take the red pill! ... There's more to see ...

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