Gambling and the Law: I Bet it Rules!

A lot of this debate hinges on whether or not gambling is right or moral, and should be considered legal. Many opponents of pro-gambling legislation are those who see gambling as wrong and immoral. These people usually tend to cite religious reasons, and tend to be the unimportant people who no one likes to listen to . The fact of the matter is that their opinions count just as much as the next man’s . This argument tends to come from the idea that time spent on gambling is wasted, and it is not right to allow hard-earned money to be wagered on games of chance, where one can easily lose the money or easily make money. The mindset of hard work equals money earned is a keystone of the foundation of the argument. This opinion is especially prevalent in those coming from the Calvinist denominations of Christianity. Another, more rational, argument comes from those that believe that casinos and gambling bring in the poor, who are trying to strike it rich, get out of poverty, have a nice life, and get rid of all of their problems, while taking gambles of negative expectation that will much more often than not lead to losing what little money they had in the first place. These are very strong and valid arguments.

The problem inherent in these arguments is that gambling can be used for the greater good. While the lottery bet is a renowned “sucker bet” the money raised from these multi-million dollar operations go to help fund schools. On smaller scales, churches (usually the Catholic Church) hold bingo parties to raise money for their operations. The author has personally taken part in a bunko party at his church. Many small-time hockey teams have held Texas Hold’em poker tournaments as a way of funding trips to out-of-town tournaments and purchasing pads, sticks, and other various pieces of equipment. The benefits can greatly outweigh the costs of legalized gambling.

One major complication in gambling legislation is the idea of the “social game”. A social game is usually referred to in the phrase, “Thursday night is poker night!” This is a game where a group of friends get together to play cards to pass the time and enjoy each other’s company. This differs from a game held at a casino or cardrooms for two basic reasons. First, a game at a cardrooms is raked . At a home social game, the only money taken from players that goes to the house is money that will help pay for such things as food, cards, chips, beer, and those little wiener dogs that you stab with a toothpick, among other things. The host is not looking to make any money off his friends by holding the game he (and on some occasions she or they) is simply trying to provide a fun night out. That brings you around to the second distinction between a social game and one held at casino or cardrooms. Social games are not played for the primary purpose of money. The social game is exactly what it means, “social.” While everybody is trying to win the money, the prospect of winning the money is not the driving force in showing up to the game. Winning money is not paramount to enjoying oneself at this game. In fact, the only reason there are stakes at all is that if no real values were being wagered, the integrity of the game would be compromised, due to people not playing their optimal strategies, and therefore eliminates the gamesmanship that would otherwise be part of the game, and that makes the game fun to play. Social gambling is brought up because at the core, the gamble is not an end in itself, but rather is the means to the end of an enjoyable night out with friends. People who gamble socially should not be persecuted or prosecuted under the law.

Under various state laws, however, someone can receive rashly different outcomes if caught by an officer, gambling in a private home. Whereas Texas allows these social games, and there is nothing on the books to prosecute those who partake in these activities, the Sooner state to the north, Oklahoma, has perhaps the harshest laws in the United States. Oklahoma, Law #21-941 states that everyone who engages in the act of gambling with any element of value (chips, money, checks, credits, etc.) is punishable by, “…a fine of not less than Five Hundred Dollars ($500.00), nor more than Two Thousand Dollars ($2,000.00), and by imprisonment in the State Penitentiary for a term of not less than one (1) year nor more than ten (10) years” (Ciaffone). YIKES! Two thousand bucks and ten years in prison for a penny-ante game of Seven Card Stud ! Obviously, this penalty does not get handed down for penny-ante games, because it is way too harsh. These people must receive no less than a $500 fine and only one year in prison. Having sentences this strict seems like it would curb gambling. The opposite is actually true. Due to having such stiff penalties, law enforcement officials rarely try to enforce these laws, making these laws useless. Between the years 1994 and 2002, in Oklahoma, there were a total of 279 convictions of violations of the law that defines all other gambling (not lotteries, bookmaking, horseracing, etc.). It must be noted, however, that this number has fallen almost to the single digits each year, since casinos were legalized. Compare this with 1,576 counts of murder, and 3168 counts of rape (Virginia). The author is not a gambling man , but he would be willing to bet that there are more private poker games, golf matches for money, office pools, and side bets on sports games (for example, the Red River Showdown) than there are rapes and murders in the state of Oklahoma. Legislators need to read the writing on the wall–these gambling laws are not being enforced, which makes the law useless.

Not only are some of these laws Draconian, but they can appear silly or out of date. In Arkansas, there is a law on the books (Arkansas, Law 5-66-113, Games of Hazard or Skill; Betting) that, for anyone convicted of betting on any game of hazard or skill, to be fined, “’…not less than ten dollars ($10.00) nor more than twenty-five dollars ($25.00)’” (Ciaffone). The author plays in a monthly game with a seventy-dollar buy-in . This is not going to be a deterrent to gambling. This will easily be seen as a small price to pay for gambling. The only downside to this conviction is that it will be a mark on that person’s record, and they will have to list that under “convictions” on job applications. This law was most likely written many years ago, when $25 meant something, and now basically serves as a symbolic fine, similar to that given to John Scopes, after the Scopes Monkey Trial, in 1925. Another law, which is somewhat eyebrow raising, is South Carolina, Law 16-19-70, which states, “Whoever shall keep or suffer to be kept any gaming table or permit of any game or games to be played in his house on the Sabbath day, on conviction thereof before any court having jurisdiction, shall be fined the sum of fifty dollars, to be sued for on behalf of, and to recovered for use of, the state” (Ciaffone). A number of questions can be raised with this piece of legislation. First of all, the Sabbath jumps out at the readers. Which Sabbath day is this referring to, Sunday, Saturday, or Friday ? Second, this law prohibits playing any game on the Sabbath, not just gambling games. This law means that not only can poker night not occur on Sunday night; you cannot play bridge or gin, with your grandmother. This law was passed in 1802, when the Sabbath meant “Sunday”. When the 14th Amendment, or the “Due Process Amendment” was passed, and restricts the ability of a state to make laws, so to guarantee fundamental fairness. If the term “Sabbath” is ambiguous, it is unfair to others. So, if one part of a law is unconstitutional, the entire law is unconstitutional.

Another aspect of this debate clouds the gambling legislation, and that is the online gambling boom of the last five years. Before the turn of the century, if you wanted to play blackjack, poker, or any other gambling game, you would have to go to a casino. If you lived nowhere near a casino–say Key West, Florida or rural China)–you were just out of luck. Now, with the advancements of the Internet, and improvements in the technology, one can find a craps table, roulette table, or lively poker game at any hour of the day. I am not referring to the shady and crooked sites that steal credit card numbers and identities. The sites in reference are those that are in the business to provide a fair game to the customers, and have no other incentive to not protect the player. If the online casino steals from that player’s account, or provides sub-par entertainment, the customer can go elsewhere with his money. What makes this situation unique in the eyes of the law is that legislators want to restrict this online gambling, while there is debate as to whether or not it is able to be restricted. Under current laws, online gambling is not deemed illegal, however it is not protected and considered legal. It falls through the cracks of the legal system.

To simplify the debate, some believe that placing a bet from a computer in the United States is illegal, because the gambling is not sanctioned. Although this is true, the online casino is headquartered outside of the United States. Some examples are PartyPoker.com, which is located on the Isle of Mann, PacificPoker.com, located in Gibraltar, and Ladbrokes, which is located in England. The argument being that the bet is not necessarily placed in the United States, but becomes “placed” in this overseas area, where it is legal, but more importantly does not violate United States laws. A comparative example would be if it were illegal to purchase alcohol in a certain county, but not illegal to consume it. So, someone from this county drives to the next county over, picks up a bottle of bourbon, and has a party! The other side counters by saying that computers and equipment were used to perpetrate the act of gambling. The precedent that is most often cited is the Interstate Wire Act of 1961, also called the Federal Wire Act. This act states, “Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers…on any sporting event or contest…shall be fined under this title or imprisoned not more than two years, or both.” Some see this as a definite “no” to all online gambling. However, the phrase of, “in the business of,” implies that someone is playing for profit, and not for fun. And thus, the argument comes around to the social gambler. Furthermore, the wording of the law seems to come down against betting on sports and other events, but not on casino games, like poker, blackjack, and slot machines. Among those in agreement is the United States Fifth Circuit Court of Appeals. Although the Supreme Court has not yet officially ruled as to how this law pertains to Internet gambling, they should uphold the Fifth Circuit Appellate Court’s ruling.

While the debate rages on of whether or not gambling is immoral or not, there is an internal debate as to whether poker and several other games are games of luck or skill. Since these games are played with a deck of cards, luck dominates the short-term outcomes. You may get all your chips in the pot with one card to come, and get called by someone who needs one perfect card to win the hand (let us say the king of hearts). As you are getting ready to scoop a massive pot, the suicide king falls, killing your good mood, and sending you to the rail . Meanwhile, over the long run, your hand will hold up most of the time (over 95% of the time, in this case), and money is sure to be made. Another notorious example of this is the MIT Blackjack Team that took Las Vegas casinos for millions, before their breakup in the early 1990s. Luck dominates the short-term results, while skill dominates the long-term results. This is where the examples end, before this turns into a five-page dissertation on expected value and gambling odds. But to summarize, in certain games, players can obtain an edge, and turn a profit, making it a game of skill, rather than one of luck.

There are two things that need to be done when it comes to the current legislation in the United States, concerning gambling. The first action that needs to be undertaken is all current state gambling laws need to be looked at, revamped, revised, and updated. This would put an end to the joke of the $25 fine in Arkansas, for playing in a private social game. These laws need to be changed to protect the rights of the social gamblers. Possible changes can include, but are not limited to, lifting all bans on social games, except those that are run to make a profit (such as illegal cardrooms). Prison time for Thursday night poker is inexcusable. Also, new laws need to be drafted that would prevent profiteering, in the form of games being hosted for profit. These games are bad because they take money away from the casinos that also spread these games, but have a legal gaming license. An alternative to reforming the existing laws would be to scrap any and all current laws on the books, concerning the topic of gambling, and draft an entirely new set of national universal laws. This would be the more efficient of the two proposed ideas (although there is a chance of violating the tenth amendment to the Constitution, which defines laws guaranteed to the states). This would be more efficient because one would not have to be aware of differing and changing laws as they pass from state to state, and decide to gamble. This solution would be a great improvement on what laws are on the books right now. Furthermore, this would also allow the government to regulate gambling, and better tax those making a significant income off gambling.

What is to be done with the world of gambling in the future? Will the right-wingers take over the country and turn us back nearly to the days of the Puritans, or will the social reformers take hold and decide that gambling is a drain on society that harms the lower classes? Hopefully, neither of these scenarios comes about. There is a logical and reasonable way to get to the bottom of the gambling, so that there is a right balance between keeping the game a pastime, and having a full-fledged gambling problem on our hands. The problem still exists that harms social gamblers across the nation that they can be brought before a court of law for participating in private games. Maybe this new publicity that private gambling has received from the “poker boom”, fueled by televised poker and the lipstick camera, and online poker, will bring this issue to the forefront and some new legislation can be formed, and this nation can move on, socially, to accept the social gambler, whether he or she plays in a casino, home game, or on the Internet. All we need to do is get over ourselves and get to the act of legislating. “Put me down for twenty dollars on the over.”

Works Cited:

Ciaffone, Robert, A Comparative Study of State Laws on Social Gambling. (1990). 16 Apr 2006.
Geospatial & Statistical Data Center. Gambling, Murder and Rape statistics in Oklahoma (1994-2002). Univ. of Virginia Lib. 16 Apr 2006.
United States. Cong. Interstate Wire Act of 1961. 87th Cong., 1st sess. Washington: GPO, 1961.