Poker and Sports Betting: Legal Overlaps and Distinctions
It is often said that poker is a game of skill, wherein a good player makes the best decisions possible based on limited information. It is the part of poker that people most often compare to everyday life.
In poker, players can calculate outs and odds, use tells and player histories, and tap into the best analyses to make the most optimal decisions. It is what makes poker a winnable game in the long run, notwithstanding inevitable swings.
The same can be said of sports betting, as bettors can used acquired skills for placing wagers, but the bottom line information is limited. There are always unknowns, but successful bettors use statistics, history, and analysis to remove some of the luck factors.
For these reasons, there is a very significant crossover between poker and sports betting. They can both be done live or online, and both pastimes have long histories in the United States. People who love to take calculated risks often share the same hobbies. And this is no more evident than in any poker room during a major sports season, as giant televisions are often showing games upon which players have wagered money.
Poker: A Game of Skill or Chance?
The question of skill versus chance is one that poker players have been discussing for decades. There have been court cases and legislative sessions on the topic, and it has been incessantly debated on social media and at poker tables.
Based on a plethora of court cases, there are two primary legal definitions of “game of skill.”
- “An activity the outcome of which is determined by the use of skill alone or predominantly by the use of skill but excludes a sport event.”
- “Any contest, game, gaming scheme or gaming mechanism in which the outcome depends upon an element of knowledge, expertise, physical ability or other skill of the user which may affect the outcome in a material way, not withstanding that chance may also be a factor.:
Of course, skill and chance are both subjective terms.
What gives poker the extra level of skill is the lack of a casino or host advantage. A poker game pits player against player, so the house has no interest in whether any player wins or loses. The house makes money by taking rake, a piece of each hand/pot, as a fee for hosting the games. Without the house maintaining an edge, the only advantage available is that of a skilled player who can outplay opponents.
Poker Skill Litigated
The most famous case regarding poker’s designation as a skill game was in the Lawrence DiCristina versus the United States.
DiCristina operated a regular poker game in the back of a warehouse in Staten Island, New York. The two tables of No Limit Hold’em ran twice per week, on average, from the end of December 2010 to May 2011. Someone reported the game, and DiCristina faced charges of operating an illegal gambling business. While he originally pled guilty to conducting a gambling operation, he rescinded that plea to request that the court decide if poker was a game of skill or chance. DiCristina asserted that the Illegal Gambling Business Act (IGBA) only pertained to house-banked games (with a house advantage) and games controlled primarily by chance.
The original jury convicted DiCristina on gambling charges, but the case in the US District Court in 2012 had a different outcome. Judge Jack Weinstein acquitted DiCristina and ruled that poker was, unequivocally, a more a game of skill than chance. Portions of his 120-page decision included statements still used in legal matters today:
“In poker, increased proficiency boosts a player’s chance of winning and affects the outcomes of individual hands as well as a series of hands. Expert poker players draw on an array of talents, including facility with numbers, knowledge of human psychology, and powers of observation and deception.”
“Because the poker played on the defendant’s premises is not predominantly a game of chance, it is not gambling as defined by the IGBA.”
“Neither the text of the IGBA nor its legislative history demonstrate that Congress designated the statute to cover all state gambling offenses. Nor does the definition of ‘gambling’ include games, such as poker, which are predominated by skill.”
The United States appealed the decision, though, and the US Court of Appeals overturned Weinstein’s ruling. The appeals judges ruled that the jury decision should stand, that the District Court was not to decide the case. In addition, they countered – in a footnote – the poker skill designation in that “the outcome depends to a material degree upon the random distribution of cards” and that the player using odds “cannot determine the outcome regardless of the degree of skill employed.”
DiCristina did appeal the case to the US Supreme Court, but the highest legal minds in the country declined to hear the case.
Despite the final outcome of this case, game experts and analysts continue to argue in favor of poker as a game of skill, separating it gambling as it pertains to slot machines and casino table games like roulette.
Sports Betting: A Wager on Athletic Outcomes
In much the same vein, experts show through endless arguments and analyses that skill dominates luck in sports wagering. No one can predict the actions of the players, factors such as weather and referee/umpire decisions, and outcomes versus odds. However, sports bettors can turn the tide toward skill by studying the games, history, and players, as well as choosing the sportsbooks with the most favorable odds.
There are no cases in American courts regarding the skill versus luck components of sports betting. However, the United States Supreme Court did rule that every state in the country can legalize and regulate the industry as they see fit.
That case was Governor of New Jersey versus National Collegiate Athletic Association et al, sometimes referred to as Christie v NCAA (NJ Governor Chris Christie originally handled the case) or Murphy v NCAA (NJ Governor Phil Murphy was in office at the time of the SCOTUS decision). It started in 2011 when the voters of New Jersey approved a constitutional amendment to legalize sports betting in their state, similar to the way Nevada operated for many years. Then, Governor Christie signed the 2012 Sports Wagering Act to solidify that decision.
Professional sports leagues were not pleased, at that time, and took New Jersey to court. A number of leagues, such as the NFL and NBA, were involved, but the league of note on the lawsuit was the NCAA. They alleged that New Jersey violated the Professional and Amateur Sports Protection Act (PASPA) of 1992, that outlawed most sports betting.
Christie lost in the US District Court and the Court of Appeals, but he didn’t stop. He appealed to the Supreme Court of the United States (SCOTUS), which agreed to hear arguments. After oral arguments in December 2017, SCOTUS issued its decision on May 14, 2018. A notable majority of the justices ruled that PASPA was unconstitutional, as it violated the anti-commandeering doctrine of the US Constitution. PASPA dictated the legal rights of individual states, which SCOTUS determined was “an affront to state sovereignty.”
Sports Integrity and Support
While sports leagues initially opposed most sports betting, their fights against state governments began to subside. They realized that betting – if properly regulated – did not impinge upon the integrity of the sports themselves. In fact, the sports betting industry actually increased interest in sports. When people had a stake in the outcome of games, they were more interested on the whole.
Leagues began to realize that the fight was ineffectual, and the best course of action would be to work with state governments, sports betting operators, and organizations like the American Gaming Association (AGA) to ensure the integrity of their sports.
In the months and years after SCOTUS overturned PASPA, states legalized retail, mobile, and online sports betting in big numbers. By the start of 2024, those activities were legal in some form in 38 states and the District of Columbia, with several other states in the process of debating legislation.
State gambling regulators educated themselves and each other on methods of preserving game integrity while promoting lucrative betting industries and revenue generators for their states. In this way, they have encouraged competition as well as consumer protections.
- More operators create competition in lines and odds, giving bettors more choices and better promotions.
- States benefit from operator taxes and job growth.
- Consumers demand accountability, which results in accounting transparency.
- Gambling opposition and advocacy groups alike hold state governments accountable for embracing responsible gambling tools, age and identification requirements, and data collection.
- Sports leagues garner no direct financial benefits, such as integrity fees once proposed, to affect game results.
Crossroads: Where Poker and Sports Betting Intersect
As mentioned, there is crossover between poker players and sports bettors. The skill/luck mix in both of them attracts people with similar traits and interests.
Often, in the online gambling world, operators offer both sports wagering and poker, often alongside casino games as well. Global sites that cater to diverse and significant populations find that there is a notable amount of crossover among verticals. Poker players will often place sports bets while at the tables, slots players sometimes test the skill component of poker, and sports bettors may take a seat at a poker table while waiting for a game to start or finish. Crossover promotions facilitate this mix.
When a state legalizes all major forms of igaming, it enables an operator to obtain all proper licensing at once and – sometimes – secure a discount by choosing licenses for poker, casino games, and sports betting. Operators can then establish servers, hire staff, and build the state’s base all at once. It presents significant savings for the operator.
However, many states have chosen to legalize sports betting only. Despite the ability of all igaming to use the same geolocation and responsible gambling technology at the same time, some lawmakers find concerns with online poker and games like blackjack while letting sports betting proceed.
There are several reasons that this happens.
- Poker no longer has a lobbying organization that speaks for and promotes the game. The iDevelopment and Economic Association (iDEA) Growth advocates for igaming as a whole, but poker needs an advocate that understands why poker is different than other forms of igaming.
- The American Gaming Association (AGA) goes to great lengths to support land-based gambling and sports betting but not igaming.
- Almost every lawmaker in America is somewhat familiar with sports and betting on games, which makes that vertical more palatable for legalization.
- Lawmakers do not fully understand that the same responsible gambling measures, geolocation technology, and licensing requirements applicable to sports betting can be applied to online poker and casino games.
- Old myths about igaming cannibalization hurting land-based gambling properties persist despite newer studies and facts that have emerged in the last decade.
Why Poker Needs Sports Betting
Poker has its own fan base. Players from around the world compete in poker games every day, online and in casinos, in neighborhood games and at kitchen tables. At one time, there were millions of people playing online together at a time.
That was during the poker boom. When online poker operators departed the US market – some in 2006 and most others in 2011 – the only way to return was to do so on a state-by-state basis. As states took on the slow process of legalizing online poker, the markets were small, exponentially smaller than the days of the poker boom. Little steps of progress put Nevada, Delaware, and New Jersey on the map for state-regulated online poker, but it was many years before other states followed.
The online poker market in the US remains small. It now includes Michigan and Pennsylvania, as well as three other states that legalized poker but have yet to find any operator wanting to apply for a poker license in those sparsely-populated jurisdictions.
The saving grace for poker is the Multi-State Internet Gaming Agreement – MSIGA for short – that allows operators to combine their player pools across state lines. This is the only way to achieve liquidity that will make internet poker a profitable endeavor.
The problem with MSIGA, on the other hand, is that it is complicated, in that it requires the governors of each state to sign each new agreement. Governors often have plates full of important tasks and are not able or willing to spend the time to research and sign the poker agreement.
Poker needs attention on a much bigger scale. If states were clamoring to join MSIGA and could show the benefits from operators who combined their player pools and displayed corresponding revenue growth, governors would be more likely to give it the attention it needs. And the only way that a significant number of states will legalize online poker to put it on that path is for sports betting operators to bring it along to legislative sessions.
Sports betting operators could urge lawmakers to pass legalize online poker alongside sports wagering. It would be beneficial to all because of crossover play and marketing, but it would also help poker find its way back to its former glory.
Poker and sports betting have the potential to work together to a much greater degree than what they’ve displayed thus far in the post-Black Friday and post-PASPA environments.
