Revenge of the Non Sequiturs
Slots, ATMs, and Online Poker

July 31, 2011

"More slot machines than ATM's in USA. Yet online poker illegal! ..."

@oneouterdotcom

Variations on the Tweet above made the rounds of a number of poker players this evening. Although I share the general sentiment—gambling is widely legal, so poker should be as well—this type of argument is specious and ultimately proves nothing about the state of poker specifically or gambling in general.

The Tweet in question referenced a CBS News story about the spread of legalized gambling across the United States. The story cited one statistic relevant to the online poker legalization debate—38 states now have legal casino gambling. Given the prevalence of casino gambling, a strong argument could be made that online poker is a natural next step in the gambling market for those states. After all, those states already make money off of regulated casino gambling, online poker is being played anyway, why not cash in?

The CBS story, however, really goes off the track by throwing in the useless statistic comparing the number of slot machines (850,000) to the number of ATMs (425,000) in the United States. This type of statistical comparison is commonplace in news reporting, and is basically a variant on the time-honored method of demonstrating really big numbers in a superficial manner: "If you laid [objects, dollars, etc.] end-to-end they would stretch [from the earth to the moon and back, around the equator, etc.] X times." Considering most people don't have a clue how far away the moon is, or how many miles it is around the equator, or any other really big metric of choice, these types of comparisons are almost never useful in advancing the point of the story.

Looking at the slot machine / ATM comparison, there are two real problems with the comparison. First, most Americans don't have a clue how many ATMs there are in the United States, the same flaw inherent in most of these comparisons. Second, and more importantly, the CBS story doesn't provide any context for the statistic. What connection is there between the number of slots and ATMs? A statistic like "There are more health insurance processors than doctors" might generate useful debate about the relative impact of insurance paperwork on the delivery of health care in the United States. (Note: that statistic was created solely as an example and might or might not be true.) But where is the logical connection between ATMs and slot machines? The two might be connected within a casino (e.g., casino management might want one ATM for every 200 slot machines—again, an entirely fabricated statistic). But where is the significance in comparing slot machines to the number of ATMs in general? What possible useful conclusion can be drawn from that comparison?

To think about the absurdity of the comparison, let's compare slot machines to other categories. Why not state that there are more slot machines than:


On the flip side, here are some things more common than slot machines:


These comparisons would be equally as true, and equally as pointless as the comparison drawn by CBS. But what logical insight would any of these comparisons support? What analytical connection exists between slots and ATMs?

Nonetheless, poker advocates take the slots / ATMs analytical non sequitur and double down by suggesting there is a logical connection between the number of slot machines in casinos and the legality of online poker. What if there were only 600,000 or 300,000 or 100,000 slot machines in casinos? Would those numbers change the argument as to whether online poker should be legalized? Does the legality of any form of casino gambling really bear any direct correlation to the debate over the legalization of online gambling in general or online poker specifically?

There are plenty of good arguments for legalizing online poker. Relying on the ratio of casino slot machines to ATMs is not one of them.

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

South Carolina Poker—
Canary in the Coal Mine for Chimento?

July 20, 2011

Last fall, the South Carolina supreme court heard oral arguments in Chimento v. Town of Mount Pleasant, an appeal asking the court to determine whether poker is banned as a game of chance by the state's anti-gambling statute. My analysis of the appeal is that the court will likely find that poker is illegal gambling, though the court may carve out an exception for purely recreational or social games where no rake or fee is charged.

Because oral arguments were held over eight months ago, I have been tracking the appellate decisions which are released on the South Carolina judicial website in anticipation of the Chimento decision. Although the supreme court has yet to release its opinion in Chimento, the South Carolina court of appeals recently issued a decision in South Carolina Law Enforcement Division v. 1-Speedmaster SN 00218, a gambling case that could be a sign of trouble for poker advocates.

In Speedmaster, the court of appeals was confronted with the question of whether an electronic gaming device violated the state's video gaming statutes. The magistrate (trial) court had held a hearing during which a Speedmaster technician had both testified and demonstrated that a skilled player could beat the machine and win every time. Based on this record, the court of appeals ultimately concluded that the Speedmaster game was not a game of chance, and there was no evidence that players wagered on the outcome of the game. Thus, the Speedmaster game was not an illegal gaming device.

Although this decision might superficially seem beneficial to the "poker is a game of skill" advocates in Chimento, the bulk of the Speedmaster court's analysis of the "skill vs. chance" argument—if adopted by the Chimento court—is strongly anti-poker. The Speedmaster court noted that the South Carolina supreme court has not yet adopted either the "dominant factor" test or the British common law "pure chance" test for determining whether a game qualifies as "gambling" under criminal law. [FN1]. The court defined the two competing tests:

The dominant factor test provides when "the dominant factor in a participant's success or failure in a particular scheme is beyond his control, the scheme is a lottery, even though the participant exercises some degree of skill or judgment." [cite]. "If a participant's skill does not govern the result of the game, the scheme contains the requisite chance necessary to constitute a lottery." [cite].

In contrast, under the "pure chance doctrine," founded in British law, "any skill, however minimal, is sufficient to remove a scheme from the definition of lottery. [cite]."

Note that the court's formulation of the dominant factor test does not require any weighing of the relative effect of skill and chance on the outcome of the game as is usually presumed by litigants advocating the "poker as game of skill" argument. Instead, so long as chance is an intrinsic or inherent element in determining the outcome of the game, it constitutes gambling. Under this interpretation of the dominant factor test, it is difficult to see poker being found to be anything other than gambling. However, the Speedmaster court declined to adopt either test, noting that under either test, the Speedmaster machine at issue was unquestionably a game of skill because a player demonstrably could win every time he played. [FN2].

The Speedmaster court then turned to the question of whether the Speedmaster machine was an illegal "gambling device". The court first referred to South Carolina common law (which is consistent with most states’ common law) and found that the elements of gambling are “consideration, chance, and reward”, with a particular analytical emphasis on the element of “chance”:

"As legal terms, 'gaming' and 'gambling' are the same and involve either fraud, or cheating or chance applied in a situation of agreement between two or more persons in which, in accordance with certain rules, the parties play a game or contest, or await the outcome of some event that will determine one or more winners or losers."

The court also looked to a state statute regulating gambling on certain gambling cruises:

"'Gambling' or gambling device' means any game of chance and includes, but is not limited to, slot machines, punchboards, video poker or blackjack machines, ke[]no, roulette, craps, or any other gaming table type gambling or poker, blackjack, or any other card gambling game."

The Speedmaster court’s reliance on the gambling cruise statute is important, because it emphasizes a point I have previously discussed: Where poker is legalized and regulated under some conditions (e.g., in a casino, on gambling cruises, or in a “charity” setting), courts will be reluctant to interpret a general gambling prohibition as permitting legalized poker outside the regulated settings permitted by state law. [FN3]. Here, the South Carolina legislature has enacted a recent statute declaring poker to be “gambling” subject to state regulation. The South Carolina supreme court in Chimento will likely rely on that statute in two ways. First, the gambling cruise statute expresses a public policy decision by the legislature that poker is included in the games to be regulated as gambling within the state. Second, the South Carolina supreme court will likely be reluctant to interpret the general anti-gambling statute at issue in Chimento as permitting poker to be played legally anywhere without regulation while poker on gambling cruises is subject to regulation.

Finally, the Speedmaster court noted in passing that even a skill game such as the Speedmaster machine could still involve gambling:

When parties wager on a game of skill, the element of chance is injected back into the game. For example, if Player A bets Player B $10 he can get a higher score in pinball, Player A has left to chance how Player B will perform. Even though Player A controls his own score, he does not control Player B's performance, and therefore, Player A does not control the outcome of the wager.

This view of the interplay between skill and gambling is also troubling for poker advocates. South Carolina’s general anti-gambling statute at issue in Chimento includes an exempt list of games of skill—billiards, bowls, backgammon, chess, draughts, and whist—which are not gambling so long as no money is wagered on the outcome of the game. The problem for poker, of course, is that no matter how much skill dominates the game, money being wagered on the outcome is an inherent part of the game. Under the Speedmaster court’s analysis that wagering on a skill game causes “the element of chance to be injected back into the game”, poker played for monetary stakes is gambling regardless of whether a rake or fee is taken by the house.

Of course, the South Carolina supreme court is not obliged to follow or even take note of the Speedmaster decision, as court of appeals decisions are not binding on the supreme court. However, the Speedmaster decision is interesting and important because it reveals the general manner in which appellate judges in the state are likely to think about gambling statutes. [FN4]. Moreover, the Speedmaster decision is likely to at least be read by the supreme court justices given that the decision references a prior South Carolina supreme court decision, State v. Johnson, which found video poker games were not “lotteries” (leading to their immediate regulation by the legislature). Johnson is important to Chimento because the current supreme court Chief Justice Toal concurred in one dissenting opinion and wrote her own dissenting opinion in that case. In her own dissent, Chief Justice Toal asserted that video poker machines could not pass even a pure chance analysis. In the dissent by another justice supported by Chief Justice Toal, she agreed with the position that the court should apply a dominant factor analysis, and then conclude that video poker was a game of chance:

I would hold, where the dominant factor in a participant's success or failure in a particular scheme is beyond his control, the scheme is a lottery, even though the participant exercises some degree of skill or judgment. If a participant's skill does not govern the result of the game, the scheme contains the requisite chance necessary to constitute a lottery.
….

The third category of games ("Type III") includes games such as poker and black jack as well as one variety of keno. In these games, the player makes a variety of decisions at one or more points during play of the game. The decisions the player makes may affect the continued play and the ultimate results of the game in a variety of ways.

First, the player may make decisions as to how to continue to play. For instance, in a poker game the player will decide which cards to keep and which to discard. While this decision could be based on sheer caprice, it would normally be based on the player's view of the probability of receiving certain replacement cards that would constitute a winning hand. This decision may also be influenced by the player's analysis of the relative value of the given hands that could be received. In other words, a player faced with two or more possible "good" options may be willing to try for the less likely hand if the payout is high enough to justify the increased risk...

In short, the Type III games are the most complex and diverse .... Still, some features are common to all machines .... In particular, each game begins with the random selection of cards, numbers, or other icons. The player sees these and is given an opportunity to make one or more decisions. A second random selection is then made by the machine. The ultimate outcome is, therefore, influenced by, but is not entirely determined by the player's decisions. However. regardless of skill, knowledge, or experience, a player cannot alter the probabilities inherent in the play of any Type I, Type II, or Type III video machine games. Neither can the player modify the function of the random number generator, or the random delivery of cards, numbers, or icons.

….

Whether chance predominates over skill is not easily answered with regard to the Type III games because the parties define "skill" differently. The plaintiffs maintain since play is completed by a random act outside the control of a player or by a player's decision to stand on the result of a prior random act, and the odds are stacked against a player, chance predominates. In effect, the plaintiffs define "skill" as the ability to affect the odds of obtaining a given card and, ultimately, the outcome of the game.

On the other hand, the defendants define "skill" as a player's ability to maximize the numbers of credits or dollars won through knowledge of probabilities and consideration of the potential payoff. One of the defendants' experts presented a mathematical model which compared the results of a player using optimum game strategy with a player acting entirely randomly. Since the most skilled player would win back 96.5% of his credits and the most unskilled player would win back 31% of his credits, the expert concluded skill predominated over chance.

….

As noted in the defendants' expert's mathematical model, the probability of obtaining a particular hand does not increase, regardless of a player's level of skill. Although a skilled player (unlike an unskilled player) can improve his chances of winning and maximize those winnings, his ability to affect the outcome of a game, i.e., actually obtain the winning card, is determined by the random number generator. Similarly, if two players both exercise optimal strategy, chance would determine which player, if either, would obtain a given card. A player's skill, no matter how good or poor, does not control the random "deal" of the cards.

In my opinion, skill should be defined in terms of the ability to obtain the desired outcome - a certain card - rather than the ability of one player to play more judiciously than another. As noted by the certification order, a video poker player is unable to control the random selection of cards, in spite of his skill, knowledge, or experience. Since the player cannot improve the likelihood he will obtain a certain card, I conclude chance dominates over skill in the operation of the Type III video game machines.

This analytical approach to the skill vs. chance argument bodes poorly for poker legalization advocates in Chimento if the court chooses to follow the lead of the Johnson dissenters. Further, Chief Justice Toal is the only current member of the South Carolina supreme court who considered the Johnson decision. Consequently, it might be presumed she will be familiar with the skill vs. luck arguments, and may have more influence on the outcome of the Chimento case than usual. Of course, poker has some fundamental differences from video poker, and there is good evidence in the record for the court to consider regarding the relative role of skill in poker. Nonetheless, I think it’s safe to assume Chief Justice Toal is a likely vote against poker legalization.


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[FN1] U.S. courts looking to British common law is not unusual, particularly in eastern states where the original Colonies established their legal systems by importing British common law. Common law in later states tends to diverge somewhat from the original British common law, most notably in western states where the common law reflects more of a frontier, libertarian flavor.

[FN2]. The Speedmaster court did note that the South Carolina supreme court would be confronting the issue of the proper test for determining whether a game is skillful or gambling in the Chimento case.

[FN3]. See my discussions of the Dent decision in Pennsylvania (poker is regulated in casinos), the Wong case from Ohio rejecting a claim for reimbursement of player funds, attempts to legalize intra-state poker in Iowa (poker is regulated in casinos), and the "Pokerhaus" lawsuit in Illinois (poker is regulated as charitable gambling).

[FN4]. Similarly, the Washington supreme court's anti-poker decision in Rousso was foreshadowed by that court's anti-online gambling decision a few weeks earlier in the Betcha.com case.


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

A Pirate's Bargain from TI (#WPBT)

July 06, 2011

Recently, April (a/k/a @thisisnotapril) announced the official dates for the Winter Poker Blogger Tournament (#WPBT). Since I was able to endure both the presence of @realdawnsummers and having @drizztdj suck out from ahead with Kings in my rookie #WPBT appearance, I was excited to sign up for this year's shenanigans. Now, Aria is not only hosting the #WPBT tourney, but has also offered a great poker room rate with no minimum play requirements ($99/$139 weekday/weekend). I love Aria's rooms and poker rooms, so I have already made reservations. But, my internal cheapskate likes to at least check out the competition, so I was intrigued by this generous offer from Treasure Island ... errr, TI:


Wow! A full 40% discount and two buffets?!?!  Sign me up!!

Oh wait. Not so fast, my friends. Apparently Phil Ruffin has me slotted in at least three tax brackets above my pay grade. Here's my official TI room rate for #WPBT weekend:


Yikes! Apparently TI has gone seriously upscale since I last stayed there in March for under $90/night. Guess I'll have to slum it at Aria .... *Sigh*

It's a tough life, but I manage somehow.

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

Armchair Jurors

July 05, 2011

Many that live deserve death. Some that die deserve life. Can you give it to them? Do not be too eager to deal out death in judgment. Even the very wise cannot see all ends.

—Gandalf, in "The Fellowship of the Ring" by J.R.R. Tolkien

Much of the nation today was transfixed by the "not guilty" verdict in the Casey Anthony murder trial. Anthony was accused of murdering her two year-old daughter, Caylee, and disposing of her body in the woods. Some rather damning evidence was presented, including photos of Casey shopping and partying during the month when Casey was missing—an absence unreported to authorities, or even friends or family members. Casey was also caught in several significant lies to police (she was found guilty of four misdemeanor counts of making false statements for her more egregious lies). In the court of public opinion, a "guilty" verdict was inevitable, and the only major question was whether the jury would find Casey guilty of a capital offense, leading to a death penalty sentencing trial.

Personally, I was only dimly aware this trial was occurring, and then only because of the occasional Twitter post from someone following the trial. I didn't watch a minute of testimony. I did see the first 30 minutes or so of the defense closing argument because the significant other was running the remote over the weekend. Frankly, I wasn't particularly impressed by Jose Baez' performance, which seemed to hit good points, then bury them with extraneous asides. The reporting I saw online as the jury began deliberations suggested the prosecution had a strong case, but also had some holes to fill; in particular, the lack of evidence of cause and time of death seemed a major hurdle to a capital murder conviction. Still, I expected a "guilty" verdict for murder or manslaughter.

To say the "not guilty" verdict shocked the public is an understatement. Even several hours after the verdict, the Twitter hashtag #caseyanthonyverdict was the top "trending topic", with scores of new posts every few seconds. Tweets were running at least 50-1 in opposition to the verdict. Many posters had some variation on the theme that the jurors were "stupid", "morons", or "idiots" (see here, here, here, here, and here for a sampling pulled from the stream when I arrived home from the office). Racial themes were common, with some posters claiming Anthony was acquitted largely because she was white, with other posters drawing parallels to the O.J. Simpson and Michael Vick cases. Plenty of posters were even more vicious:

jury = stupid redneck hillbillies

@briehopkins

These jurors should be removed from society

@shoriagirl

I want ALL of those 12 unconvinced jurors to hire Casey as a nanny for their children/grandchildren.

@amycapetta (ironically sporting a "NOH8" logo on her profile picture)

Maybe all the jurors threw one of their children's dead body's in the trunk of their cars? #caseyanthonyverdict

@GatTheBully

And in a rare thematic triptych Tweet:

Tomorrow CNN will announce that all the Jurors have Down Syndrome

@NeverUhFlaw

Tomorrow CNN will announce that the Jurors were ALL ON CRACK this morning

@NeverUhFlaw

Tomorrow CNN will announce that the Jurors are all SHEPARDS for the DEVIL

@NeverUhFlaw

Whether one agrees or disagrees with the jury's verdict, the jury deserves public respect, not ridicule. The jury was faced with an incredibly difficult job. Jurors were shut away from their homes, their communities, their families and friends for seven weeks of trial. Jurors were instructed to ignore the maelstrom of press coverage engulfing the trial. Jurors were asked to set aside all emotion and preconceptions while they sat in judgment on a woman accused of murdering her young daughter. Jurors had to sift through conflicting testimony and ambiguous evidence. Most importantly, the jurors were forced to consider whether a fellow citizen should possibly be put to death.

It's easy to sit in the comfort of one's home or office, read snippets of press coverage online or watch a segment of a tabloid "news" show, and say, "Hey, she's a baby killer!" But for the jurors, the decision wasn't some throwaway opinion on a Facebook poll. No, the jurors were faced with one of the weightiest of moral decisions, deciding whether another person should be sent to jail or even executed. The jurors, unlike their public critics, have to live with the consequences of their decision. Quickly, which is morally worse—letting a guilty murderer walk free, or executing (or imprisoning for life) a mother falsely accused of killing her daughter? What if it were your sister or friend sitting in the defendant's chair? How's that bloodlust feel now? [FN1].

Turning trials into public spectacles has a long history in America. In fact, the American press, pundits, and public were armchair quarterbacking every decision by every lawyer, witness, judge, and juror in high-profile cases long before there were even quarterbacks. Maybe Casey Anthony did kill her daughter and the jury made the "wrong" decision; in fact, let's agree that's probably the truth. Nonetheless, even if the jury was wrong, there is absolutely no indication the jurors didn't take their job seriously and do their best to render a verdict they felt was just based on the evidence and the law. [FN2]. Because their vote doesn't matter, armchair jurors find it easy to throw out an opinion on guilt or innocence without hearing all the evidence and arguments, seeing all of the witnesses, and being instructed on the applicable law. It is extremely offensive to see so many people publicly demean the jury's efforts with a dismissive, "How could they be so stupid!" when those critics don't have to face any real life moral consequences if their opinion turns out to have been wrong.

In any system of justice, someone has to serve as the arbiter of criminal guilt or innocence. For better or worse, in America, that role is generally for a jury of common citizens. The alternative—elected or appointed judges—is not inherently superior to the jury system, given that judges are hardly immune from prejudice and bias, and face their own unique set of social and political pressures. It's fair to question the jury's decision on the merits. To question the jury's integrity or intelligence is to question the very foundations of our legal system. Let's give the jurors some respect for doing an important but thankless task

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[FN1]  If you think it's rare for people to be falsely convicted in America, spend some time on the Innocence Project website, then let me know what you think.

[FN2]  In my sixteen year legal career, I've tried over a dozen jury trials (all civil), including one that was selected to be presented while observed by the entire first-year law school class at Drake Law School as a practicum. I've also observed all or portions of numerous other trials, and interviewed jurors post-trial for their impressions of the case. It is my experience that jurors take their role seriously and do their best to render a fair decision.

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

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