Poker Tournaments in Bars -- The New Prohibition?

While the Unlawful Internet Gambling Enforcement Act (UIGEA) has devastated internet poker, separate, quiet battles are being fought, and won, to make poker legal in bars under state laws.

The fight over the rights of bars to run Texas Hold'em tournaments does have some significant differences with the better known Prohibition on alcohol. Legally, Prohibition was a federal issue. It involved an actual amendment to the U.S. Constitution, a rare and difficult feat to accomplish, and a federal statute, limiting adult Americans' right to drink alcoholic beverages.

Gambling, on the other hand is almost always exclusively a state issue. Not only is the federal government not interested, it usually does not have the power to directly stop the gambling, unless interstate organized crime is involved.

Prohibition was the end result of a social movement designed to tell people what they can and cannot do, even when they are not harming anyone else.

The legalization of gambling throughout America shows that, today, there is broad public support among voters and legislators to let adults decide for themselves whether they want to engage in dangerous activities.

But the fight is far from over. The UIGEA says that the federal government has to issue regulations requiring your bank to prevent you from wiring your own money to make a bet on the internet, if that wager violates some federal, state or tribal law. The Democrats tried to prevent those regulations from being made. In a straight, party-line vote, Republicans in Congress recently killed that attempt, issuing public statements about the evils of internet gambling.

Changes in law always trail changes in society.

While poker tournaments have become a national craze, local law may still make the activity technically illegal.

The laws vary greatly from state to state. One nearly universal prohibition is on running commercial poker games without a gaming license. Many states do allow casinos and cardclubs to operate poker games. But for everyone else, it seems clear you cannot run money games and directly take a piece of the action, either by raking the pot or charging a seat fee per half hour. Charging players a fee to enter the tournament, where the bar keeps a part of the fee, is not allowed.

At the other extreme, games played for free, particularly those where nothing can be won, are usually legal. In March 2005, the Washington Gambling Commission ruled that it was legal to play poker in restaurants and bars, as long as there was no money involved.

Entrepreneurs have jumped at the chance to help bars run free tournaments. In Minnesota, Chippy Poker and a half-dozen other unnamed companies got a glowing write-up in the Minneapolis Star Tribune, by running Texas Hold'em tournaments "at more than 100 bars each week." Prizes include trophies, cash and entries into casino poker tournaments.

But these games are not universally legal. The last Attorney General of California declared that gambling is gambling, even when it is free and players cannot win anything except more time at the tables. He was clearly wrong, but many potential operators did not want to spend tens of thousands of dollars to defend themselves.

Louisiana is in the center of a number of fights over free poker tournaments in bars. The problem is that the law can be read as putting a bar owner into the business of illegal gambling because he makes a profit from increased sales during the games.

To resolve the issue, bar-owners are taking their cases to the legislatures. In Baton Rouge, a majority of the House voted to make poker tournaments in bars legal. But Gov. Kathleen Blanco came out against the measure as being "an expansion of gambling." She must be shocked ... shocked! ... that anyone would suggest there is gambling in Louisiana.

Meanwhile, the Baton Rouge Advocate reported this wonderful exchange, apparently on the floor of the House, after the bill was defeated:

Rep. Warren Triche, D-Thibodaux, the bill's author, was asked by Rep. Jack Smith, D-Stephensville, "if it would still be OK to have legislative poker games."

Triche replied that, yes, it would.

END

Copyright 2008. Professor I Nelson Rose is recognized as one of the world's leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website: www.GAMBLINGANDTHELAW.com.

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