U.S. vs. DiCristina Opinion (08/21/2012)

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA
against
LAWRENCE DICRISTINA,
Defendant.
MEMORANDUM, ORDER,
& JUDGMENT
11-CR-414

Appearances:
For the government: Office of the United States Attorney
271 Cadman Plaza East
Brooklyn, NY 11201

By: Marisa M. Seifan
Nathan Daniel Reilly

For the defendant: Kannan Sundaram
Federal Defenders
One Pierrepont Plaza, 16th Floor
Brooklyn, NY 11201

For amicus curiae Poker Players Alliance: Kenneth M. Dreifach
ZwillGen, PLLC
415 Madison Avenue
New York, NY 10017

By: Thomas C. Goldstein
Tejinder Singh
Goldstein & Russell, P.C.

JACK B. WEINSTEIN, Senior United States District Judge:
Case 1:11-cr-00414-JBW Document 109 Filed 08/21/12 Page 1 of 120 PageID #: 4766
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Table of Contents
I. Introduction .............................................................................................................. 5
II. Facts .......................................................................................................................... 9
A. Procedural History ................................................................................................. 9
B. Evidence on Poker ............................................................................................... 10
1. Poker in the United States ............................................................................... 11
2. Game Play Generally ....................................................................................... 11
3. Expert Testimony ............................................................................................ 14
a. Defense Expert...14
b. Government Expert30
c. Defense Expert's Supplemental Report..38
4. Other Evidence ................................................................................................ 45
5. Conclusions of Other Courts and the States .................................................... 47
6. Compared to Video or Joker Poker .............................................................. 52
C. Evidence at Trial ................................................................................................. 53
III. Federal Rule of Criminal Procedure 29 .................................................................. 55
IV. Rules of Statutory Construction ............................................................................. 56
A. Generally ............................................................................................................. 56
B. Rule of Lenity...................................................................................................... 57
V. Federal Gambling Laws ......................................................................................... 58
A. Illegal Gambling Business Act ............................................................................ 58
1. Statutory Language .......................................................................................... 58
2. Dictionary Definitions ..................................................................................... 60
3. Common Law .................................................................................................. 62
4. Legislative History .......................................................................................... 62
a. Purpose of the Statute.....62
b. Definition of Gambling Generally.66
c. Discussion of Particular Games.....70
5. Commission on the Review of the National Policy Towards Gambling ......... 75
6. Subsequent Mafia Involvement in Poker Games ............................................ 76
B. Other Gambling Statutes ..................................................................................... 78
1. Contemporary with the IGBA ......................................................................... 78
2. Pre-IGBA ......................................................................................................... 81
a. Transporting Gambling Materials......81
b. Gambling Ships..84
c. Wire Act.....84
d. Travel Act......85
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3. Post-IGBA ....................................................................................................... 86
a. Indian Gambling Regulatory Act...86
b. National Gambling Impact Study Commission Act..89
c. Unlawful Internet Gambling Enforcement Act of 2006....90
VI. Proof Needed That Business Engaged in Gambling Under the IGBA ............... 92
A. Limited Case Law Interpreting 18 U.S.C. 1955(b)(2) ..................................... 92
B. Statutory Text and Legislative History are Ambiguous ...................................... 96
1. Text .................................................................................................................. 96
2. Legislative History .......................................................................................... 99
3. Other Federal Statutes ................................................................................... 100
C. Rule of Lenity Weighs in Favor of the Defendant ............................................ 100
VII. Poker is Not Gambling Under IGBA ................................................................... 101
A. No Controlling Federal Cases ........................................................................... 103
B. Only Games of Chance Are Gambling Under IGBA .................................... 104
1. Statute is Ambiguous ..................................................................................... 106
a. Text..................................................106
b. Dictionary and Common Law Definitions..106
c. Legislative History...107
d. Other Federal Statutes......108
2. Gambling Not Limited to House-Banked Games .......................................... 109
3. Gambling is Limited to Games Predominated By Chance ............................ 110
C. Poker is Predominated By Skill Rather than Chance ........................................ 112
D. Poker is Not Gambling Under IGBA ................................................................ 119
VIII. Conclusion ............................................................................................................ 120

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Table of Figures
Fig. 1: Winning through time (April 2010 through March 2011) for the top and bottom
ten players in terms of total dollar amounts won or lost at $5/$10 stakes.19

Fig. 2: Win rate comparison: Queen Jack suited (e.g. Q J).......23

Fig. 3: Win rate comparison: King Nine offsuit (e.g. K 9)...24

Fig. 4: Average win rate for players of different predicted skill, for $5/$10 stakes players in the
prediction group.27

Fig. 5: Percentage of the time a higher skilled player (top 50% of skill) would predominate over
a lower skilled player (bottom 50% of skill) after a given number of hands at $0.50/$1.00
stakes..29

Fig. 6: Percentage of the time a higher skilled player (top 50% of skill) would predominate over
a lower skilled player (bottom 50% of skill) after a given number of hands at $1/$2 stakes
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Fig. 7: Simulated Cumulative Winnings of Top 10 Winners and Losers (1,000 players, 100,000
trials each)..36

Fig. 8: Average win rates for players of different predicted skill, for $5/$10 stakes, adding rake
back in player results.40

Fig. 9: Contribution of skill to poker.45

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I. Introduction
Defendant Lawrence Dicristina is charged with operating an illegal gambling business
involving poker games in violation of the Illegal Gambling Business Act (IGBA), 18 U.S.C.
1955, and conspiring to do so. See Second Superseding Indictment, Doc. Entry 25, Dec. 9, 2011.
The type of poker alleged and proved to have been played in defendants establishment was
Texas Holdem, a game described in Part II(B)(1), infra. When reference is made to poker
in this memorandum, this is the variant of pokerreferred to.
Mr. Dicristina moved to dismiss the indictment on the grounds that a poker room does
not fall under the definition of an illegal gambling business proscribed by the federal statute
because poker is predominately a game of skill rather than chance. Def.s Mot. to Dismiss the
Indictment, Doc. Entry 69, June 29, 2012. He also contended that whether poker is a game of
chance or skill is a mixed question of law and fact to be determined by the jury. Id.
Following pretrial oral argument and expert testimony, the court ruled that whether poker
constituted gambling under the applicable federal criminal statute would be decided as a matter
of law. See Tr. of Daubert Hrg 89:1-5, July 6, 2012 (Def. Expert Daubert Hrg Tr.).
Decision on the motion to dismiss was reserved. The case proceeded to trial, the jury being
instructed that poker constituted gambling under the IGBA. Defendant was convicted on both
counts. He then renewed his motion for a judgment of acquittal. See Def.s Mem. of L. in Supp.
of his Mot. for a Judgment of Acquittal Under Rule 29 of the Federal Rules of Criminal
Procedure, Doc. Entry 92, July 19, 2012.
Although the defendant initially raised the issue of whether poker as played in this case is
gambling under New York law, see Def. Expert Daubert Hrg Tr. 85:5 86:1the violation of
which is an element of the federal offense, see 18 U.S.C. 1955(b)(1)(i)he has not renewed
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this aspect of his motion. See Def.s Mot. to Dismiss the Indictment, Doc. Entry 69, June 29,
2012. The argument is waived. In any event, it has no merit. New York courts have long
considered that poker contains a sufficient element of chance to constitute gambling under that
states laws. See N.Y. Penal Law 225.00(2) (Gambling. A person engages in gambling
when he stakes or risks something of value upon the outcome of a contest of chance or a future
contingent event not under his control or influence, upon an agreement or understanding that he
will receive something of value in the event of a certain outcome.); N.Y. Penal Law 225.00(1)
(Contest of chance means any contest, game, gaming scheme or gaming device in which the
outcome depends in a material degree upon an element of chance, notwithstanding that skill of
the contestants may also be a factor therein.); In Re Platos Cave Corp. v. State Liquor Auth.,
496 N.Y.S.2d 436, 438 (1st Dept 1985), affd 498 N.E.2d 420 (1986) (holding that a Joker
Poker video game fell under 225.00s definition of gambling in partial reliance on its similarity
to poker; [a]lthough there is a degree of skill and concentration involved in playing poker, the
outcome depends in a material degree upon an element of chance, i.e., the draw of the cards);
see also Dalton v. Pataki, 780 N.Y.S.2d 47, 64 n.5 (3d Dept 2004) (noting that the term game
of chance or contest of chance . . . has been interpreted to include such games as stud
poker), affd 498 N.E.2d 420 (1986); People v. Turner, 629 N.Y.S.2d 661, 662 (N.Y. Crim. Ct.
1995) (Games of chance range from those that require no skill, such as a lottery . . . , to those
such as poker or blackjack which require considerable skill in calculating the probability of
drawing particular cards. Nonetheless, the latter are as much games of chance as the former,
since the outcome depends to a material degree upon the random distribution of cards. . . . The
skill of the player may increase the odds in the players favor, but cannot determine the outcome
regardless of the degree of skill employed.); People v. Dubinsky, 31 N.Y.S.2d 234, 237 (Bronx
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Cnty. Ct. Spec. Sess. 1941) (There is no doubt that playing stud poker for money is a game of
chance and constitutes gambling.); id. at 238 ([T]he courts of many states including our own
seem to be unanimous in their holding that where a host receives some consideration or some
payment for permitting a card game to be played or other gaming to take place in his premises,
that constitutes gambling.); cf. Katzs Delicatessen, Inc. v. OConnell, 97 N.E.2d 906, 907
(N.Y. 1951) (holding that a social game of poker played in a basement room of a liquor store
violated a law which provided that [n]o person licensed to sell alcoholic beverages shall suffer
or permit any gambling on the licensed premises, or suffer or permit such premises to become
disorderly). This series of New York State decisions do not decide the issue now posed:
whether a business involving illegal poker games violates the federal IGBA.
The defendants argument in favor of dismissal is two-fold. First, he claims that even if
poker is gambling under New York law, not all violations of state gambling laws constitute
gambling prosecutable under the IGBA. The federal statute defines gambling as includ[ing]
but . . . not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or
dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances
therein. 18 U.S.C. 1955(b)(2). He submits that this definition limits which state gaming laws
trigger prosecution under the IGBA: a business must involve games sufficiently similar to the
nine games enumerated in the federal definition in order to be prosecuted as a gambling
business under the IGBA. Second, he contends that the poker room he operated does not
constitute a gambling business under this narrow definitionthat is to say, that a game run by
a gambling business must be both house-banked and predominated by chance in order to be
sufficiently similar to those enumerated, and that his poker enterprise was neither.
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The government counters that 1955(b)(2) does not, by its plain language, restrict what
kinds of games constitute gambling under the IGBA. Urged is that the goal of the federal statute
was to curb the influence of organized crime, which derived substantial revenues from illegal
gambling, and that the federal law was passed to bolster states efforts on this front. It follows,
so the argument goes, that any gambling activity that is illegal under state law is gambling
under the IGBA. Govt Response in Opp. to Def.s Mot. to Dismiss the Indictment and Mot. to
Preclude Expert Testimony, Doc. Entry 76, July 5, 2012
Both the defendants and the governments interpretations of the statute are plausible. It
is unclear from the text and legislative history of the IGBA whether every state gambling offense
would permit a federal conviction. See Part VI, infra. It is equally uncertain whether, in
enacting the statute, Congress foresaw that poker businesses would be prosecutable under it. See
Part VII, infra.
In light of these ambiguities, the rule of lenity requires that the defendants interpretation
be adopted, and his conviction be dismissed. His acts did not constitute a federal crime.
Declaring that the federal gambling statute does not cover poker games of the type
operated by the defendant does not prevent federal law enforcement agencies from achieving the
goals of the statute, as put forward by the government, or encroach on any states ability to
proscribe these card games. In poker games controlled by the Mob, a violation of state gambling
laws would permit federal prosecution under the Racketeer Influenced and Corrupt
Organizations Act (RICO). See 18 U.S.C. 19611968. Even if the gambling business is not
Mob-controlledas it was not in this caseNew York State gambling laws would permit
prosecution in state court. See, e.g. N.Y. Penal Law 225.05.
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For the reasons stated below, the defendants conviction is vacated, and the indictment
dismissed.
II. Facts
A. Procedural History
On December 9, 2011, defendant Lawrence Dicristina was charged in a second
superseding indictment with operating an illegal gambling business involving poker games in
violation of the IGBA (Count Two) and conspiring to do so (Count One). See Second
Superseding Indictment, Doc. Entry 25, Dec. 9, 2011. He initially pled guilty to Count Two, the
substantive IGBA offense. See Tr. of Guilty Plea, Doc. Entry 40, Dec. 12, 2011. At his
sentencing hearing, he moved to withdraw his plea. Doc. Entry 50, May 1, 2012. The plea was
withdrawn, and a trial date was set. Id.
A week before trial, the defendant moved under Federal Rule of Criminal Procedure
29(b) to dismiss the indictment, contending that poker did not constitute gambling as defined by
the IGBA. See Def.s Mot. to Dismiss the Indictment, Doc. Entry 69, June 29, 2012. An amicus
brief in support of his argument was filed by the Poker Players Alliance (PPA). See PPA Mot.to
File an Amicus Br. in Supp. of Def.s Mot. to Dismiss, Doc. Entry 74, July 1, 2012. The
defendant also sought to introduce expert testimony at trial to show that poker was a game of
skill rather than chance and thus outside the purview of the statute. See Doc. Entry 73, July 3,
2012.
Following a Daubert hearing, defendants witness was permitted to present his opinion as
an expert, but his testimony was excluded from the trial as irrelevant. See Def. Expert Daubert
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Hrg Tr. 84:1-2. It was ruled that whether poker constituted gambling was a matter of law that
would be decided by the court, rather than by the jury. Id. 89:1-5.
Decision on defendants motion to dismiss was reserved. Id. He renewed his motion at
the close of the governments case, Tr. of Trial 264:2-3, July 10, 2012, and at the close of
evidence, id. 325:18-23, with decision again reserved.
After it was instructed that running a poker establishment was illegal, the jury convicted
the defendant of both Counts One and Two. See Doc. Entry 91, July 12, 2012. Additional
briefing on the motion to dismiss was submitted following the verdict.
The government submitted evidence at a post-trial Daubert hearing held on August 10,
2012. See generally Tr. of Daubert Hrg, Aug. 13, 2012 (Govt Expert Daubert Hrg Tr.).
Experts for the government and the defendant testified independently and in a joint discussion
with the court, submitting reports supplemented by extensive briefs and letters. See id.; Def.
Letter Attaching Expert Report App. (Report of Dr. Randall Heeb), Doc. Entry 77, July 6, 2012
(Def. Expert Report); Report of Dr. David DeRosa, Doc. Entry 103, Aug. 10, 2012 (Govt
Expert Report); Def.s Letter Addressing Issues Raised at Aug. 10 Daubert Hearing App.
(Supplemental Report of Dr. Randal D. Heeb), Doc. Entry 104, Aug. 13, 2012 (Def. Expert
Supp. Report); Govt Reply to Def.s Letter Addressing Issues Raised at Aug. 10 Daubert
Hearing, Doc. Entry 107, Aug. 17, 2012 (Govt Reply Letter); Def.s Letter Reply to Govt
Aug. 17, 2012 Letter, Doc. Entry 108, Aug. 20, 2012.
B. Evidence on Poker
Central to the issue of whether poker falls within the ambit of the statute is: 1) whether
Congress, at the time of its enactment of the IGBA, understood gambling to include poker; and
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2) whether poker is, like the other games enumerated in that statute, a game predominated by
chance.
1. Poker in the United States
Poker has a long history in the United States. See, e.g., The National Game, N.Y.
Times, Feb.12, 1875 (describing the spread of literature on poker). The game first appeared in
roughly its modern form in the early nineteenth century in New Orleans. James McManus,
Cowboys Full: The Story of Poker 51 (2009). It has been embraced by many of our political
leaders and other public figures. For example, Justice Douglas was a regular at President
Franklin Roosevelts poker parties; Chief Justice Vinson played poker with President Truman.
Cheney v. U.S. Dist. Court for Dist. of Columbia, 541 U.S. 913, 917 (2004) (citing J. Simon,
Independent Journey: The Life of William O. Douglas 220-221 (1980); D. McCullough, Truman
511 (1992)). Driven in part by the Internet, which allows for online poker playing, and cable
television, which frequently broadcasts poker tournaments, the game has surged in popularity in
recent years. Anthony Holden, Bigger Deal: A Year Inside the Poker Boom 1, 10 (2007). In
2006, 8,773 players entered the main event in the World Series of Poker, the most prestigious
poker tournament in the United States, and more than 44,500 players participated in the
tournament at large. Id. at 1.
2. Game Play Generally
While there are several major variants of poker, the defendants business involved No-
Limit Texas Holdem, a game of increasing popularity. See Def. Expert Daubert Hrg Tr.
14:24 15:4; Part II(C), infra. No-Limit Texas Holdem is currently the most popular variant of
poker. See Def. Expert Daubert Hrg Tr. 14:12-22.
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Texas Holdem poker has been described as follows:
The game is usually played with at most 10 (and at least 2) players. Like
most variants of poker, the objective in holdem is to win pots, where a pot is the
sum of the money bet by all players in a hand. A pot is won either at the
showdown by forming the best five card poker hand out of the seven cards
available, or by betting to cause other players to fold and abandon their claim to
the pot. The objective of a player is not to win the maximum number of
individual pots, but rather to make mathematically correct decisions in order to
maximize the expected net amount won in the long run.
. . .
Holdem is often played using small and big blind bets. A dealer button is
used to represent the player in the dealer position; the dealer button rotates
clockwise after each hand, changing the position of the dealer and blinds. The
small blind is posted by the player to the left of the dealer and is usually equal to
half of the big blind. The big blind, posted by the player to the left of the small
blind, is equal to the minimum bet.
. . .
A play of a hand begins with each player being dealt two cards face down
from a standard deck of 52 cards. These cards are the players hole or pocket
cards, they are the only cards each player will receive individually, and they will
only (possibly) be revealed at the showdown, making holdem a closed poker
game. After the pocket cards are dealt, there is a "pre-flop" betting round,
beginning with the player to the left of the big blind (or the player to the left of the
dealer, if no blinds are used) and continuing clockwise. A round of betting
continues until every player has either folded, put in all of their chips, or matched
the amount put in by each other active player.
After the pre-flop betting round, assuming there remain at least two
players taking part in the hand, the dealer deals a flop; three face-up community
cards. The flop is followed by a second betting round. This and all subsequent
betting rounds begin with the player to the dealers left and continue clockwise.
After the flop betting round ends a single community card (called the turn)
is dealt, followed by a third betting round. A final single community card (called
the river) is then dealt, followed by a fourth betting round and the showdown, if
necessary.
If a player bets and all other players fold, then the remaining player is
awarded the pot and is not required to show his hole cards. If two or more players
remain after the final betting round, a showdown occurs. On the showdown, each
player plays the best five-card hand he can make from the seven cards comprising
his two pocket cards and the five community cards. A player may use both of his
own two pocket cards, only one, or none at all, to form his final five-card hand. If
the five community cards form the players best hand, then the player is said to be
playing the board and can only hope to split the pot, since each other active player
can also use the same five cards to construct the same hand.
If the best hand is shared by more than one player, then the pot is split
equally among them. The best hand is determined according to the ranking
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described below. If the significant part of the hand involves fewer than five cards,
(such as two pair or three of a kind), then the additional cards (called kickers) are
used to settle ties. Note that only the cards numerical rank matters; suit values are
irrelevant in Holdem.

PPA Mot. for Leave to File an Amicus Br. Ex. B (Noga Alon, Poker, Chance and Skill 2-3
(unpublished manuscript)), Doc. Entry 74, July 3, 2012.
The government does not dispute that skill plays some role in poker, particularly in no-
limit poker games. As one writer has described the matter:
The limits, or absence of limits, on how much a player may bet and raise
will dramatically affect the game dynamics, including players decisions and
strategies and the relative balance of luck versus skill in the game. . . . In no-limit
games, a player may bet or raise any amount he has in front of him (table stakes
limit betting in a hand to the chips and money on the table). . . .
While the initial distribution of cards and replacement cards are random,
the decision on which cards to discard, the methods and steps in betting, the
analysis of playing habits of other players, and the management of a players
chips from hand to hand are all skills. . . .

Anthony Cabot & Robert Hannum, Poker: Public Policy, Law, Mathematics, and the Future of
an American Tradition, 22 T.M. Cooley L. Rev. 443, 450-54 (2005).
A skilled player should be able to assess the strength of his hand as a function of
his hole cards, the community cards, the number of players still in the game, their
betting strategy and the position at the table. He should be able to assess the
model of play of the other players, estimate the probability of improving his hand
once the next community cards are revealed, and should be able to hide his
strategy by bluffing and leaving his behavior unpredictable.

PPA Mot. for Leave to File an Amicus Br. Ex. B (Noga Alon, Poker, Chance and Skill 16
(unpublished manuscript)), Doc. Entry 74, July 3, 2012.
Unlike other games commonly considered gambling, such as roulette, craps, or blackjack,
the house does not participate in game play during poker games. Cabot & Hannum, supra, at
452.
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Instead, players compete against each other, and money won or lost is merely
transferred from one player to another. The casino provides a dealer, who does
not play, and the casino makes money by taking a percentage of each pot,
charging an hourly fee, or collecting a flat amount for every hand. The first of
these is the most common; a rake (percentage extracted) of 5% to 10% is
typical.

Cabot & Hannum, supra, at 452-53.

3. Expert Testimony
a. Defense Expert
At a July 6, 2012 pretrial hearing, Dr. Randal D. Heeb, a respected economist,
statistician, and player in national poker tournaments, testified as an expert on game theory. See
Def. Expert Daubert Hrg Tr. 12:7-8. He highlighted the number of skilled strategic choices,
such as how much to wager, made by poker players in the course of playing a single hand:
[T]heres a very large number of decisions that need to be made by a
poker player playing any given hand. . . . The simplest and most obvious choice
that a player has to make is simply whether to play a particular hand. . . . [For
example, a hand with a King and a Nine in different suits] is a hand which is
particularly easy for unskillful players to play badly, and for skillful players to
play well. And the very first decision that a player has to make is simply whether
or not to play and how much to bet, and less skillful players seeing a King and a
Nine, which seem like relatively high cards, and when the King comes, they will
have a pair of Kings, which seems like a relatively strong hand, and yet unskillful
players tempted to play that hand are very likely to bet too much and to lose to
players with even better hands. Because even though it seems like a good hand,
when you happen to get another King, you make a strong hand, it seems like you
are likely to win. In fact, you may win relatively many hands. You are not going
to win very much money with that hand, and when you lose, you are likely to lose
a lot of money. So unskillful players tend to play that hand poorly, and make bad
decisions, not only the decisions you play, but also how much to bet, how to
respond to other players, when other players raise them, for example.
So a more skillful player would recognize that the only way to win with
that hand would be, for example to get a pair [of] Kings, and if nobody else has
anything that is a very good hand, you are likely to win almost nothing with that
pair of Kings. On the other hand, if another player, instead of starting with a King
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Nine, had a King Ace, and now when all of the common cards are dealt
subsequently in the game, a King appears, both players would have a pair of
Kings, but the player with the Ace King would have a much stronger hand and
therefore win much more often and much more. The less skillful player would
have a tendency to bet too much with the King Nine early, and would also tend to
call too often later.

Tr. of Hrg 26:22 28:12, July 6, 2012.
Bluffing, raising, and folding require honed skills to maximize the value of the cards
dealt by Lady Luck:
[Wagering is] also used to try, for example, to force an opponent to fold their
hand, and there are two relevant aspects of that strategic play. One would be a
bluff. If I think you have the best hand and I want to bet an amount that is going
to induce you to give up your hand, you know, thats one element of the wager.
And whats important about that wager is not that I am betting on the outcome of
some outside event, but rather the amount that I choose to bet is carefully
strategically chosen in order to influence your behavior, and I choose an amount
based on what I think [you] will do, given the amount that I bet, and it can go two
different ways. Sort of the novice way to think about this is the more that I bet,
the more likely you are to fold, because its harder for you to put up more money
to call my bet. With more expert players, they would anticipate that effect. And,
so, theres a bluff that has a name among poker players called a post oak bluff
where you bet a small amount to make your opponent think you are trying to
make them call. So they think about that with their model of how you play, and
they decide to fold because of the small amount that I bet. And so the amount that
you bet becomes incredibly important.
Theres a second way that the amount that you bet, whether or not to bet
becomes important. Even if Im pretty sure I got the best hand, I may want you to
fold because, for example, if you have a flush draw and I have the best current
hand, I may not want you to get your chance to make your flush. So I will bet an
amount designed to make it uneconomic for you to make the call, and if you are a
good player, you will recognize that and you will fold. If you are a bad player,
you will make an unskillful play that actually wins me money over time. So by
making that correct amount of the bet, Ive influenced the outcome, both
immediately in the single hand and over the long haul, the amount that I win over
time playing against either skillful or unskillful players. So . . . whether or not to
bet, whether or not to raise, which is going to bet zero, let the other person bet and
raise after the fact, these are all strategic elements which are the essence of poker,
and in that sense theres nothing analogous to that in a game of chance like
betting on a football game or betting on the roll of the dice.

Id. 50:8 51:24.
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Position at the table and the habits of fellow players must be taken into account to play
successfully.
[A]nother very simple thing to notice that unskillful players dont tend to
notice . . . is that the position at the table matters. So the person [who] has to act
first is at a disadvantage, because they dont know what the other players are
going to do. So the person that acts last, and because you act in turn around the
table in a clockwise fashion, the person that acts last has a big advantage. They
got to see what other players did before they made their choices. So a skillful
player recognizes that advantage and . . . changes their strategy, plays more hands,
and plays them more aggressively in later positions, but at the same time folds
their hands and plays more conservatively, if other players have acted with
strength in front of them.
So if a player has a bet in an early position, that is a relatively strong play.
And so a player that gets to play later, would take that into account if they are a
skillful player, and would only play a very strong hand.
Yet another way that a skillful player can use relatively simple
information is to recognize how skillful their opponents are and change their
strategy based on who they are playing against. So if a skillful player bets in an . .
. early positionand I know that that is a skillful player because I have observed
how they played the rest of their handsI know that they know that that early
position is a dangerous position for them to be in. So if a skillful player bets in
that position, I . . . think they . . . have a stronger hand, I react accordingly.
Unskillful players dont even notice this. So, again, thats a relatively easy play
that can be learned in one day of training and a couple of days of practice, which
would dramatically improve a players results.

Id. 37:3 38:9; see also id. 49:7-16 (In poker, you dont know the cards that [the other players]
have, but they know what cards they have. They dont know the cards that you have. So you
have a model of your opponent and how they react to the situation that they see. They have a
model of you in their mind, and how well the players play, make their decisions to use this
information, which is generated by the chance mechanism, the way in which they then use the
information that they do have to make their strategic choices is what makes poker such an . . .
interesting game.). When poker is played live, as it was in the instant case, rather than on a
computer, additional skills come into play, such as the ability to read their opponent, to detect
17

from their opponents betting behavior, from their tone of voice, from their reactions, whether or
not they have a good hand. Id. 42:1-4.
Dr. Heeb opined that poker differs from other forms of gambling, such as sports betting,
because the player can rely on sophisticated skills to change the outcome of the game. Id. 49:17-
20.
[T]he player in a poker game is making all of the decisions, making all the plays,
which include whether or not to wager on a particular hand and how much. And,
in fact, the act of wagering itself is the essence of the decision. So in one sense in
a gamble over any other mechanism, whether it was a bet on a baseball game or a
bet on the roll of the dice, the wager itself is completely independent of the event
being wagered on. Whereas, in poker, the wager is not in the same sense a wager
on the outcome. It is the strategic choice that you are making. You are trying to
influence the outcome of the game, either by the amount that you are wagering,
trying to build up and win more money.

Id. 49:21 50:8.
According to Dr. Heeb, many people make a living playing poker and win consistently
over time whereas it is impossible to make a living and to win consistently playing casino
games such as roulette where chance predominates. Def. Expert Report at 11. This fact alone
was an independent foundation for his opinion that skill predominates over chance in poker. Id.
As shown in Figure 1 below, prepared by Dr. Heeb, the ten most proficient players earn
dramatically more money than the ten least proficient players over the course of a year. The
most skillful professionals earn the same celestial salaries as professional ball players.
The expert for the government, Dr. DeRosa, demonstratedand Dr. Heeb conceded
that a figure similar to Figure 1 could be obtained by chance tosses of a coin. See Part
II(A)(B)(3)(b), infra; Govt Reply Letter at 3. But, while Dr. Heeb showed that the same poker
players would consistently come out on top in the play of a new set of multiple hands of poker,
18

this consistency could not be demonstrated in a new set of coin tossers by the same tossers. See
Part II(B)(3)(c), infra.

1
9

Fig. 1: Winning through time (April 2010 through March 2011) for the top and bottom
ten players in terms of total dollar amounts won or lost at $5/$10 stakes
$300,000
$250,000 +--------------- - - - - - - - - - - - - - - - - - - - - - - - - - : - I - ~ ~
$200,000 I ;.OJ , _ / ~ I
$150,000 I .'" r ~ AJ"'V- f' I I
, , " " ~ . ~ - ~
$0
$50,000
$100,000
-$150,000
-$200,000
--Winning player 1 --Winning player 2 - Winning pl ayer 3 --Winningplayer4 --Winning player 5
- Winning player 6 - Winningplilyer 7 - Winning pl ayer 8 - Winningplayer9 - Winning player 10
- Losingpiayer 1 - l osi ng player 2 - l osingp/ayer 3 - Losi ngplilyer 4 - l osingp!ayer 5
-Losi ngpl ayer 6 - Losing player 7 - l osingp!ayer 8 - Losingplilyer 9 - l osingp/ayer 10
Note: For illustrative purposes, in this fi gure all the hands played by each player are distributed evenly from left to right across the graph. Thus , for example, the midpoint 01 tile
graph marks the midpoint of each player's playing history. Some players played more hands than others, and they may have played them al different times . However, all of the
players depicted in the graph played a high volume of hands.
20

According to Dr. Heeb, Figure 1 shows that the ten best players win consistently and
that these players cumulative amounts won are nearly always increasing, even though they
may have a few losing days or weeks. Id. By contrast, the ten worst players are consistently
losing throughout the year. Id. He posits that [t]he fact that the winning players tend to win
consistently and the losing players tend to lose consistently demonstrates that there is a skill
differential between these groups. Id.
Dr. Heeb acknowledged that poker also involves an element of chance. Def. Expert
Daubert Hrg Tr. 58:12-13. On any given hand . . . the probabilities are certainly finite. Id.
62:14-15. The following hypothetical posed by the government to Dr. Heeb on cross-
examination is illustrative:
Q. . . . The lower skilled player has seven deuce offhand, which is . . .
statistically the wors[t] starting hand in poker; is that correct?
A. Yeah, probably.
Q. And the higher skilled player has two aces, which is the best starting
hand . . . in holdem poker; is that right?
A. Thats right. Thats right.
Q. And when the hand starts, the high skilled player with the two aces is
about an 87 percent to 12 percent favorite. . . .
A. That sounds right.
Q. So . . . the lower skill player perhaps demonstrating his lack of skills
goes all in for $500 with his seven deuce off suit and the higher skill player calls
that. Just as a matter of percentage, the lower skilled player has about a 12
percent chance of actually winning that hand, correct?
A. At the point that they both made the bet and called the be[t], yes.
Q. So about one out of ten times, give or take, in that scenario, the lower
skilled player will actually win?
A. Thats right, one out of eight actually.
Q. . . . And at that point the lower skilled player can take his money and
go home, right?
A. Theres nothing to stop a player from quitting, I guess.
Q. And the fact that the higher skilled player is higher skilled, doesnt get
him his money back, right?
A. Thats right

21

Id. 70:4 71:10; see also 57:18-24 (For example, a bad beat [a subjective term for a
hand in which a player with what appear to be strong cards nevertheless loses], . . . might
be a hand in which after the play of the hand, the betting has all been made, I believe that
I have or I may even know exactly that I have an 85 percent chance of winning and a 15
percent chance of losing, and a bad beat would be a hand on which the 15 percent chance
occurs.).
He acknowledged that poker falls in between chess, which he characterized as an almost
pure game of skill, and roulette, which he characterized as a pure game of chance. Id. 44:8
45:9. According to Dr. Heeb:
[T]he question then is: How do you know if skill predominates over chance in
poker? And the right way to analyze that question is to ask: Over how long does it
take for skill to essentially show itself and predominate over the element of
chance? And the answer is that its sufficiently few number of hands, that a
player could reach that number of hands in a few playing sessions. And, again,
depending on how skillful that player is, an extremely skillful player, that players
skill would manifest itself in that players results relatively quickly.

Id. 45:9-18.
Based on his research, Dr. Heeb concluded that skill predominated over chance in
determining the outcome of a poker game. He summarized the results of his study of 415
million hands of No Limit Texas Holdem that were played on-line at the PokerStars
website from April 2010 to March 2011. Id. 13:3-9. To verify the reliability of the data
he received from PokerStars, he obtained publicly available data from HandHQ, a
company that tracks hands played on PokerStars and other online poker sites. Def.
Expert Report at 10. Using this outside source, he confirmed that the data received from
PokerStars was an accurate records of hands played. Id. Although his information came
22

from internet poker, rather than face-to-face games, Dr. Heeb concluded that the data set
he chose was appropriate:
The game is a game of skill in exactly the same way, whether its played live or
played over the internet . . . . So my conclusions . . . carry over exactly to when
the exact same game is played, whether it is played in person, played with cards, .
. . or played electronically over the internet. The only difference between playing
live and playing in person is that the live game brings in some additional elements
of skill which are not available to the internet player.

Def. Expert Daubert Hrg Tr. 41:13-24. Using this sizable data set, Dr. Heeb conducted two
different analyses to evaluate the relative effect of skill and luck on players success rate in
poker.
First, he looked at whether a players average win rate on all other hands was predictive
of their success in a particular kind of handfor example, a King and a Nine in different suits
(the King Nine hand). Id. 22:14 23:3. He divided players into two groups: those whose
success rate was above the median, and those whose success rate was below the median. Id.
24:13-22. Players whose success rate was above the median were more successful with the King
Nine hand than players whose success rate was below the median. Id. 24:23 25:3. As
summarized in Figures 2 and 3, more highly skilled players won moreor lost lessthan lower-
skilled players when dealt the same hand.
23

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Fig. 3: Win rate comparison: King Nine offsuit (e.g. K 9)
$ O . ~ r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~
$0.20 +1 ----------------------------------------------------------------i
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-$0.80 +1 -----------------------------------
-$1.00 +I-----------------------------------i
-$0.97
-$1.20 -'-------------------------------------'
Note: Based on $1 /S2 No-limit Hokfem; 6 max tables with 6 active players; all positions included; includes all oHsut K 9 cOf'1"\binations.
25

Dr. Heeb concluded that a players skill had a statistically significant effect on the
amount of money won or lost in a particular hand in poker. Id. 25:15-19; 26:11-18; see also id.
28:21 29:3 (The fact that players who tended to play poorly with all the rest of their cards,
also played poorly and lost, or [won] less, with any particular hand, would be sufficient onto
itself to demonstrate that the actions of the skillful players are skill, not luck, because if they
were lucky, of course the fact that they were lucky on one set[] of cards, would have no influence
on how they did with other cards.). While Dr. Heeb acknowledged that in a single hand, what
cards are dealt is going to be an even more important factor, . . . regardless of which hand a
player is dealt, he explained that when players are dealt the same hand, the more skillful player
plays it much better and achieves a better result. Def. Expert Daubert Hrg Tr. 39:6-15. But
see Govt Reply Letter at 6 (contending that what hand a player is dealt is the predominant
determinant of how much he will profit or lose from that hand).
Second, he randomly divided the same data set into two groups. Id. 30:21-24. He used
regression analysis on the first group to create a skill index that related how skillfully the player
played to what their actual win rates were. Id. 31:19-21. His skill index included 240 statistics
about their play. [It wo]uld be equivalent -- if I could draw another analogy, and I hope that this
isn't stretching it too far, but a baseball player that decides how often they swing at the first pitch
or whether they are waiting for a curve ball or a strike. Govt Expert Daubert Hrg Tr. 103:4-8.
He then applied the skill index to the second analysis group to see whether players who were
predicted to be of high skill actually won significantly more money than players predicted to be
of low skill. Def. Expert Daubert Hrg Tr. 33:1-5. He found that [t]he lowest skill players
according to the predicted skill index in fact achieve much worse results. Average players still
dont do very well. Very good players are winning players. Id. 33:7-10.
26

As illustrated in Figure 4, a players win rate increases as his skill level increases. Win
rate is calculated as a fraction of the big blind won per hand, on average.
27

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28

Dr. Heeb explained Figure 4 as follows:
The line slopes upward to the right, indicating that players with higher predicted
skill on average have higher win rates. If poker were a game of chance, there
would be no relationship between predicted skill and results. The slope of the line
reflects the much higher expected win rate of skillful players compared to less
skillful players. This relationship characterizes games of skill.

Def. Expert Report at 36.
Dr. Heeb then divided the analysis group into players with skill below the median and
players with skill above the median. Def. Expert Daubert Hrg Tr. 33:19-23. As shown in
Figure 5 below, he found that it takes about 900 hands of poker for the high skill group to
predominate over the low skill group with 90 percent confidence and about 1400 hands for 95
percent confidence. Id. 34:2-4; 34:12-13.

2
9

Fig. 5: Percentage of the time a higher skilled player (top 50% of skill) would predominate over a lower skilled
player (bottom 50% of skill) after a given number of hands at $0.50/$1.00 stakes
100%
95%
r
V
99.990/0 coofldence achieved
+- after 7,296 hands
"0
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+-afler 2,986 hands
55%
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0 1.000 2,000 3.000 4,000 5.000 6,000 7{100 spoo 9,000 10,000
Number of hands Included In sl mu latian
30

Dr. Heeb testified that this number of hands is quite reasonably played in a relatively short
amount of time by players that are playing poker seriously and that over a longer period of
time, skill predominates even more. Id. 34:19-23; see also Govt Expert Daubert Hrg Tr.
92:22 93:8 (90 percent of the time the top half [in a $1/$2 game, see Fig. 6, infra] would be
ahead after 880 hands, which is about 30 hours of play. . . . [A]t the World Series [of Poker], a
typical one day of play is 10 hours, excluding breaks, so it actually takes about 13 hours to play
10 hours of play. That's a standard day. A standard tournament takes three days. So in the
amount of time it takes players to play one poker tournament, 90 percent of the more skillful half
of the players would be ahead of the less skillful half of the players.).
Based on these analyses, this expert concluded that skill predominates over chance in
poker. Id. 18:4-5. He also noted that the topic . . . has been addressed by a number of other
researchers, none of whom had the data I have available with the whole cards available to me.
All of the results that I have seen, both in published and unpublished papers, are all consistent
with the result that skill predominates over chance. Id. 40:20-25; see also Part II(B)(4), infra.
b. Government Expert
The governments expert, Dr. David DeRosa, who is also a well-qualified
econometrician, testified at a post-verdict Daubert hearing on August 10, 2012. See generally
Govt Expert Daubert Hrg Tr. Dr. Heeb was present at the hearing to answer questions
regarding his report and participate in a technical discussion with Dr. DeRosa and the court. See
generally id.
Unlike Dr. Heeb, Dr. DeRosa neither has any personal experience with poker, see id.6:7-
14, nor has he independently analyzed the game. Moreover, he noted that he had not been
provided with any of the data or statistical analyses summarized in Dr. Heebs report. Govt
31

Expert Report at 2. His testimony was thus limited to a critique of whether Dr. Heebs stated
results support his overarching conclusion, namely that skill predominates over chance in poker.
Id. He did not offer any opinions as to the validity of Dr. Heebs calculations or his general
methodology. Id.
Dr. DeRosa acknowledged that the actions of [poker] players ha[ve] some impact on the
outcome [of the game] and poker is not a game of pure chance. Id. at 10. Nevertheless, he had
several criticisms of Dr. Heebs work.
First, he argued that Dr. Heebs analysis erroneously relied on relative skill rather than
likelihood that a player will earn a profit. Id. at 4. According to Dr. DeRosa:
Poker players play poker to win money. A player will consider himself a winner
if he earns a profit. The fact that he may lose less money than another player is
likely to be of cold comfort. I believe that the proper metric for determining
success at a session of poker is whether or not a player profits from playing the
game.

Id. at 6; see also Govt Reply Letter at 1-2 (emphasizing this point). Yet Dr. Heebs own data
shows that most players lose money at poker. Dr. DeRosa pointed to Figure 4, supra, which he
said shows that:
[P]layers in the 51
st
to 75
th
skill percentile lost approximately .15 to .45 [of the big
blind] per hand. In the $5/$10 game Dr. Heeb analyzes [in Fig. 4, supra], this
equates to a loss of approximately $1.50 - $4.50 per hand.
Even top players in the 90
th
skill percentile appear to have, on average,
suffered losses from their poker playing. Only between the 90
th
and 95
th
skill
percentile does it appear that skillful players begin to experience a positive win
rate (i.e. have a positive expected return).

Govt Expert Report at 6-7; see also Govt Reply Letter at 3.
Dr. DeRosa concluded from the fact that so many players lose money that if a player
were to make a profit at any given session in a game where he faced a negative expected rate of
return, such profit would have to be primarily as the result of luck. Govt Expert Report at 7.
32

Because so few players win money, he contended, skill cannot predominate over luck in poker.
See Govt Expert Daubert Hrg Tr. 9:7-17 (I go in with a certain amount of money, and I leave
with more money. And if I don't do that, I am a loser. I'm a loser. So a lot of this ranking stuff is
irrelevant because skill should be winning money. And as I read the report and as I read Dr.
Heeb's testimony, probably 95 percent of the people who play this online poker lose money so I
don't understand where the skill is. How could it be skillful playing if you're losing money? And
I don't consider it skill if you lose less money than the unfortunate fellow who lost more
money.); id. 24:25 25:5 (But the other striking thing that I found was the idea that 95 percent
of these people lose money. So for 95 percent -- according to the report that I read. That win rate
is a negative number so 95 percent of them lose money. So, Your Honor, isn't then poker a game
of chance, not skill, just on that alone?).
Second, Dr. DeRosa disagreed with Dr. Heebs use of cumulative datai.e., his
examination of results over a large number of handsto evaluate whether skilled players
outperform unskilled players. Dr. DeRosa instead stated that the relevant frame of reference for
determining whether skill or chance predominates is a single hand. Govt Expert Daubert Hrg
Tr. 27:12-18 ([T]here's no requirement that you have to play forever. It's not like a game of golf
where you have to play all 18 holes. It's not like a game of tennis where you have to play three
sets. You can drop out any time you want. So the fact that if you play one hand chance is the
material decider, I would say that says it right there.).
[N]o matter how long a player sits at a table, the probability of receiving any
given hand is the same on the next hand before the cards are dealt as it was for
every other hand in the game. This is reminiscent of a famous paradigm from
basic probability theory. If red has come up 20 times in a row in roulette, it does
not mean that black is due. The probability of getting red or black (or green)
with each spin of the wheel is independent of prior history. From this point of
view, Dr. Heebs analysis of long-term results is of limited value . . . .

33

Govt Expert Report at 10; see also Govt Reply Letter at 2-3. Moreover, he argued, without
independent factual support, that the number of hands required for skill to predominate over
chance in poker to a reasonable degree of statistical confidence exceeded the number played by
an average player. For example, as shown in Figure 6, in order for a skilled player to beat an
unskilled player with 95% confidence in a game with $1/$2 stakes, the player would have to play
1,399 hands.

3
4

Fig. 6: Percentage of the time a higher skilled player (top 50% of skill) would predominate over a lower skilled player
(bottom 50% of skill) after a given number of hands at $1/$2 stakes
100%
95%
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Number of hands included in simulation
35

Assuming an average of 30 hands per hour, a player would have to play more than 46.6 hours
with no breaks to reach that number of hands. Govt Expert Report at 9.
Third, Dr. DeRosa argued that the presence of persistent winners and losers, as illustrated
by Dr. Heebs chart (shown as Figure 1, supra) does not prove that skill predominates over
chance in poker, because persistent winners and losers (selected after the fact) result normally
from random chance variation. Id. at 11.
If one were to chart the performance of players involved in a game whose
outcome was determined by purely by chance, one might expect to see similar
results. Some players are seenafter the factto have consistently won. This
does not prove or disprove that their winning was a result of skill.

Id. at 12. To demonstrate this point, Dr. DeRosa ran a simulation that produced results similar to
having 1,000 players each flip a coin 100,000 times. Id. As with a coin flip, each player had an
equal chance of either winning or losing an equal amount of money on any given trial. Id. As
shown below in Figure 7, his results appear strikingly similar to those of Dr. Heeb in Figure 1.

36

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37

According to Dr. DeRosa, [t]his experiment shows that in a game of pure chance, in the long
run, the top winners exhibit the behavior of persistently winning while the top losers appear to be
consistently losing. Govt Expert Report at 13; see also Govt Reply Letter at 3-4; Figure 1 and
accompanying text, supra.
Finally, Dr. DeRosa questioned the validity of Dr. Heebs data set, as well as his
methodology. Since the data came from an online poker website, Dr. DeRosa was concerned
that it might not represent real hands played by real players and might include false data points
representing instances in which live playerswho may have believed that they were playing
against another, similarly-situated personwere playing against either a computer or a
confederate of the gaming company. See id. at 17; Govt Expert Daubert Hrg 32:5-10; 73:22
74:20; see also Govt Reply Letter at 10 (It should be noted that Dr. Heeb admitted that he
never performed any test to determine whether players were colluding or had more information
than they should have had (such as knowing what the community cards would be before they
were dealt). In a game based on imperfect information, knowledge of even a single card,
whether held by an opponent or included in the community cards[,] would be massively
valuable.). He also questioned Dr. Heebs decision to categorize [p]layers with too few hands
played to calculate statistics for all the various hand and position combinations as the lowest
skill level in his analysis of whether skilled players played particular hands better than unskilled
players. Def. Expert Report at 36 n.7. According to Dr. DeRosa:
These players could be skilled players who only played a few . . . hands and
then quit because they were losing. . . . The assumption . . . could cause a self-
serving bias in Dr. Heebs analysis. A player only plays a few hands because he
loses. He is then assumed to be unskilled and therefore the expected loss of
unskilled players increases.

Govt Expert Report at 16.
38

Dr. DeRosa concluded that Dr. Heeb has not proven that skill predominates over chance
in poker. Govt Expert Report at 3. He did not discuss Dr. Heebs analysis of the relative
performance of skilled versus unskilled players in playing the same hand. See Fig. 2-3, supra,
and accompanying text.

c. Defense Experts Supplemental Report
Following the August 10, 2012 Daubert hearing, Dr. Heeb submitted a supplemental
expert report responding to Dr. DeRosas critiques and providing additional support for his
conclusion that skill predominates over chance in poker. See generally Def. Expert Supp.
Report.
First, Dr. Heeb argued that his definition of skill, and his evaluation of relative skill
levels, was appropriate. He conceded that only 10 percent to 20 percent of the players in any
given game are good enough to win consistently . . . . And that's represented by the top 6 to 8
percent of players on Figure 4, supra. Govt Expert Daubert Hrg Tr. 86:5-9. He contested the
view, however, that poker players can only demonstrate skill by winning money. Instead, as Dr.
Heeb put it, the question of whether skill predominates requires only an examination of the
relative importance of skill. Def. Expert Supp. Report at 1. Moreover, he added, [a] big part
of the reason that more poker players have losing results than have winning results on a
cumulative basis is that in most circumstances, including the data I studied, player pay a fee to
the operator of a poker game in the form of a rake, which is a small percentage deducted from
each pot. Id. at 2. To demonstrate this, Dr. Heeb adjusted Figure 4, supra, to add the rake
payments back to the players winnings. In his initial analysis, which included the payment of
the rake, as shown in Figure 4, only 28% of players in the $5/$10 game have a positive profit
39

over the course of a year. When the rake is added back, 37% of players have a positive profit, as
shown in Figure 8. As before, win rate is calculated as fraction of the big blind won per hand, on
average.

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Dr. Heeb further explained that [t]he reason that less than half the players earn a profit is that
the best players (with or without the rake) win more than their pro-rata share of the profits, so
there are fewer winners than losers. Id. But see Govt Reply Letter at 2 ([A]nalyzing the data
without the rake is misleading because poker is a game where winning or losing is determined by
monetary performance in an absolute sense. Unlike games such as chess or golf, wagering
money is an integral part of a poker game. Whether a player is successful depends on how much
money he has won or lost, but by how well he has faired against the other players.)/
Dr. Heeb also defended his assignment of players who play very few hands to the low
skill group, explaining that, in his experience as a poker player, players who play only a few
hands and quiteven if they win money before leaving the game, as some doare almost
always low skill players. Id. at 7. He noted that, because the outcome of players hands are
effectively weighted by the number of hands that they played, . . . a player who played only a
few hands would get very little weight in the simulation. Id.
Second, Dr. Heeb explained his reliance on cumulative results, and particularly his
dependence on results involving large numbers of hands played:
In order to assess whether poker is a game in which skill predominates, it is
essential to consider the cumulative outcome after a sufficient number of hands.
Consider baseball or gold. Baseball is a game of skill on every pitch, even those
pitches on which something lucky or unlucky happens. Nonetheless, it would
not be possible to determine with statistical confidence that baseball is a game of
skill from a single pitch, or even a single game, even though the score is known
and can change with each pitch. Similarly, each stroke in gold can change the
score. Poker is a game of skill on every hand that is played, but proving this
statistically requires a sufficient number of hands. . . .
. . . Typical poker players, even in social games, play multiple sessions at
regular intervals, such as playing once or twice weekly. Even after only an eight-
hour session of poker (about 240 hands), skillful play can already be distinguished
from less skillful play. . . . [When the 50% most skilled players are compared to
the 50% least skilled players] 76% of higher skill players are already ahead after
just 240 hands. If I focus on the top 10% of players, compared with the bottom
42

30% of players, 88% are ahead after just 240 hands. More than 90% are ahead
after just 300 hands.
This number of hands can easily be played in a single session of poker,
even by casual players in a social game. . . . A serious poker player, even an
amateur, can easily play thousands of hands a month in live play.

Id. at 3-4. See also Govt Expert Daubert Hrg Tr. 78:22 79:22 (Dr. Heeb: . . . [I]f I look over
a large number of plays, a large number of a statistical sample, what I learn from the sample after
enough observations is arbitrarily close to the absolute truth. And it's just a question of how
many you have to look at to know what the true underlying distribution or any underlying
statistic would be. So depending on how closely you want to know the truth, you may have to
look at more and more -- a larger and larger sample, more and more observations. But the
underlying truth hasn't ever changed. So we're trying to detect whether or not this is a game of
skill with a degree of precision . . . . After enough information, we can determine that the
probability of players getting different results, the skillful players' better results, the less skillful
players' less successful results, the probability of that happening by anything other than a
difference in skill between the players becomes . . . smaller and smaller the more observations on
the data, the more hands that we play. It's still a game of skill even on one hand. But to say that
we have shown that with statistical certainty requires more and more information the more
precisely we want to measure it.); see id. 77:20 78:6 (Dr. Heeb: The way that I would think
about it is that the question is whether or not the game is a game of skill. How many hands do
you need to look at in order to discern that with statistical certainty? A more familiar example
might be baseball. One pitch in baseball is a skillful event, both skillful by the pitcher and
skillful by the hitter. If you wanted to demonstrate that skill, you would look at a lot of pitches,
games, for the season. And based on a statistical analysis of a lot of events, you would be able to
43

determine whether or not that was a skillful act. But it's a skillful act in the execution of just one
swing or one pitch.).
Third, Dr. Heeb provided additional charts and calculations to support his contention that
winning persists in poker, and that the trends shown in Figure 4 are the result of skill rather than
chance. He showed that, in general, winning players persisted in winning, and losing players
persisted in losing, prospectivelyi.e., after they had been identified as winners and losers. Def.
Expert Supp. Report at 4-5. The same was not true for players in a pure game of chance, such as
the coin toss modeled by Dr. DeRosa in Figure 7, supra. Dr. Heeb concluded that [t]his clearly
demonstrates that it is the relative skills of these [poker] players and not chance that is leading to
their winning and losing. . . . The contrast between [the performance of poker players and coin
tossers] illustrates the degree to which skill is predominant over chance. Id. at 5.
Finally, Dr. Heeb calculated the relative proportions that skill and chance contribute to
the outcome of poker. He explained his methodology as follows:
If the proportion of the game attributable to skill is 0%, then the probability of
prevailing should be the same for all contestants. As a result, in a matchup of a
higher skilled and a lower skilled player in a game in which skill contributes
0% to the outcome, the higher skilled player will win about 50% of the time. If
the proportion of skill in the game is 100%, then a perfectly skilled contestant
would win 100% of the time. However, even in a game of 100% skill, the more
skillful player could make an error, leading to a win by the less skillful player. If
skill and chance are equally important, and therefore equally likely to contribute
to the probability of prevailing, then half the time skill is decisive, and half of the
time chance is decisive. When skill is decisive, the skillful contestant wins.
When chance is decisive, the players have an equal probability of winning. This
implies that a contest between two players or teams that is exactly 50% skill and
50% chance will result in the skillful contestant winning 75% of the time. Of
course, the poker games I studied were not two player games, but the experiment
that I conducted pitted a group of more skilled players against a group of less
skilled players, so this is the appropriate measure to use.

Id. at 8.
44

As the proper duration of a test of the fraction of skill and chance in any game must be a
function of the game itself, Dr. Heeb chose several benchmarks that were representative of
different kinds of game play, ranging from a social game to the world championship contest.
An eight hour poker session, typical of some social games, would involve about
240 hands, since in an hour of live play, players will play about 30 hands. A
typical poker day at a poker tournament would last ten hours, excluding breaks,
and involve about 300 hands. Events at the World Series of Poker last three, ten-
hour days, for a total of about 900 hands of play. The winner of the World Series
of Pokers main event is widely recognized as the world champion. That event is
conducted over ten days, so the poker World Champion is crowned after about
3,000 hands.

Id. at 9. The formula relied upon by Dr. Heeb is as follows:
P(W|H) = PS * P(W|S,H) + PC * P(W|C,H)
= PS * P(W|S,H) + (1-PS) * P(W|C,H)
= PS * 1 + (1-PS) * 0.5
= 0.5 + 0.5PS
Where:
P(W|H) = Probability of Winning for the High Skill Player
PS = Portion of the Game Contributed By Skill
PC = Portion of the Game Contributed By Chance
P(W|S,H) = Probability of Winning if Skill is Decisive, for the High Skill
Player
P(W|C,H) = Probability of Winning if Chance is Decisive, for the High
Skill Player

Id. at 8.
Using this formula, he compared the performance of the top 10% of players to the bottom
30% of players in a $5/$10 stake game, and the performance of the top 50% of players to the
bottom 50% of players based upon $1/$2 stakes, at these benchmarks. Id. at 10. In as few as
240 hands, skill accounted for more than 50% of the outcome in the games.

45

Fig. 9: Contribution of skill to poker

Dr. Heeb opined, [T]he above analysis establishes that skill in poker predominates over chance
overwhelmingly, based on a standard of 3,000 hands of play. If the Court were to rule using a
benchmark involving fewer hands of play, under all benchmarks proposed above, poker is a
game in which skill predominates over chance. Id. The government contests the conclusions
Dr. Heeb draws from this chart, but not the calculations themselves. See Govt Reply Letter at 8-
10.
4. Other Evidence
A number of other studies were properly relied on by the defendant without objection,
providing additional empirical support for the fact that skill determines the outcome in poker.
See Fed. R. Evid. 703 (If experts in the particular field would reasonably rely on those kinds of
facts or data in forming an opinion on the subject, they need not be admissible for the opinion to
be admitted.).
One study found, in an analysis of 103 million hands of Texas Holdem poker, that
seventy-five percent of poker hands conclude when one player bets and induces his opponents to
($5/$10 game)
($1/$2 game)
46

fold; the cards are never revealed or compared. See PPA Mot. for Leave to File an Amicus Br.
Ex. A (Paco Hope & Sean McCulloch, Statistical Analysis of Texas Holdem 6 (Mar. 4, 2009)
(unpublished article)), Doc. Entry 74, July 3, 2012. In the remaining hands, at least half the time
the player who would have had the best hand does not win because he has folded. Id. The
authors concluded that in the sampled data, the vast majority of games are determined by
something other than the value of the cards, since no player reveals any cards to determine the
winner. Id. at 14.
Other studies have found that skilled players defeated unskilled players both in
simulations and in real-world play. See PPA Mot. for Leave to File an Amicus Br. Ex. B (Noga
Alon, Poker, Chance and Skill 15-16 (unpublished manuscript)), Doc. Entry 74, July 3, 2012
(concluding, based on analysis of a simplified model of poker, that although like in essentially
almost any other game there is some influence of chance in poker, the game is predominantly a
game of skill, and that the significance of skill increases dramatically as the number of hands
played grows); PPA Mot. for Leave to File an Amicus Br. Ex. C (Rachel Croson, Peter
Fishman, & Devin G. Pope, Poker Superstars: Skill or Luck? Similarities between golfthought
to be a game of skilland poker, Chance, vol. 21, no. 4 (2008)), Doc. Entry 74, July 3, 2012
(comparing the effect of chance and skill on golf and poker and concluding that poker is as much
a game of skill as golf); PPA Mot. for Leave to File an Amicus Br. Ex. D (Steven D. Levitt &
Thomas J. Miles, The Role of Skill Versus Luck in Poker: Evidence from the World Series of
Poker 12-14 (May 2011) (unpublished manuscript)), Doc. Entry 74, July 3, 2012 (finding, based
on an analysis of data from the 2010 World Series of Poker, that [p]layers classified as high
skill [based on past performance in other tournaments] are 12 percent more likely to make
money than the average player, and 19 percent more likely to make the final table and that in
47

some crude sense, the predictability of outcomes for pairs of players in a poker tournament is
similar to that between teams in Major League Baseball).
The government counters that expert poker players recognize the critical role
that luck plays in the game. Govt Mem. of L. in Opp. to Def.s Rule 29 Mot. 31, Doc. Entry
96, July 27, 2012. For example, one professional poker player, Phil Gordon, has observed,
Change ten river cards [i.e., the final card dealt in any Texas Holdem hand] in any poker
players tournament career, and I would bet that they would be a losing tournament player for
their career. McManus, supra, at 342. Similarly, Dan Harrington, a prominent and
accomplished expert poker player, has acknowledged, The volatility in [no-limit Texas
Holdem] tournaments is out of sight . . . Sure, you see some names repeating as winners. They
are truly great players. But the problem is, there are lots of other truly great players you havent
seen at all. And its not because they are paying badly. Its the variance. You need to be
extremely lucky. Id. at 343.
The government also contests the conclusions the defendant draws from one of the
studies cited. It contends that the fact that [most poker] players fold before the showdown
demonstrates that chance is the dominant factor in poker. Every decision a player makes is a
reaction to a chance event (the random distribution of cards) or another players reaction to a
chance event over which the player has no control. Govt Reply Letter at 6.
5. Conclusions of Other Courts and the States
Whether poker is a game of chance or a game of skill is a matter of some public and
judicial debate. See, e.g., DeeDee Correll, Taking their chances on pokers legality: Is Texas
Holdem about the luck of the draw, or the skill of the player? The question is being played out
in courts around the country, L.A. Times, Sept. 3, 2009, at 14.
48

When the first wave of anti-gambling laws was passed by state legislatures across the
country in the nineteenth century, they frequently prohibited poker along with other gambling
activities. McManus, supra, at 83-84. In early cases, poker players were described as
gamblers, and poker was described as gambling. See, e.g., Utsler v. Territory, 62 P. 287,
288 (Ok. 1900) (upholding defendants conviction under state statute making it unlawful for
any dealer in intoxicating liquors in this territory to have or permit any gambling, game of
chance, or gambling carried on, or to have or keep any gambling table or gaming device of any
kind, in a room where intoxicating liquors are sold and noting that the witness McKay and
[t]he witness Fisher . . . testified that [they] saw gambling carried on in the room with cards,
being known as stud poker, and he also testified that liquor was sold in the same room); In re
Sellings Estate, 2 N.Y.S. 634, 635 (1888) (denying respondent the right to administer the estate
of a deceased on the grounds that [t]he proof submitted by the petitioner also shows the
respondent Joseph Selling to be a man of utterly worthless and irresponsible character; that he is
a professional gambler, know[n] as Poker Joe).
Several state gaming laws explicitly include pokerapparently including Texas
Holdemin their definition of gambling or define it as a game of chance. E.g. Wis. Const. Art
IV, 24(6)(c) (prohibiting the legislature from authorizing particular games as a state-run
lottery, including poker); Idaho Const. Art III 20(2) (prohibiting casino gambling, including
poker); Ark. Code 5-66-112 (prohibiting betting money or something of value on card games,
including poker); Conn. Gen Stat. 53-278a(2) (Gambling means risking any money,
credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance or
the operation of a gambling device, including the playing of a casino gambling game such as . . .
poker.); Ohio Rev. Code Ann. 2915.01 (Game of chance means poker, craps, roulette, or
49

other game in which a player gives anything of value in the hope of gain, the outcome of which
is determined largely by chance, but does not include bingo.); Idaho Code 18-3801 (defining
gambling as including poker and excluding [b]ona fide contests of skill, speed, strength or
endurance in which awards are made only to entrants or the owners of entrants); Iowa Code
99B.11 (A poker, blackjack, craps, keno, or roulette contest, league, or tournament shall not be
considered a bona fide contest of skill exempt from gambling license requirements; [c]ribbage,
bridge, chess, checkers, dominoes, pinochle and similar contests, leagues or tournaments are
exempted.); Okla. Stat. tit. 21 941 (Except as provided in the Oklahoma Charity Games Act,
every person who opens, or causes to be opened, or who conducts, whether for hire or not, or
carries on . . . poker . . . for money, checks, credits, or any representatives of value, or who either
as owner or employee, whether for hire or not, deals for those engaged in any such game, shall
be guilty of opening, conducting or carrying on gambling game.); Tenn. Code Ann. 39-17-
501, Sentencing Commission Comments (The definition of gambling includes . . . poker.); cf.
Cal. Penal Code 337j(e) (including poker in the definition of a controlled game which is
unlawful to operate without a license except when played in private homes or residences, in
which no person makes money for operating the game, except as a player). Others implicitly
include poker in their definition of gambling. See Fla. Stat. 849.08 - 849.085(2)(a)
(prohibiting any game at cards, keno, roulette, faro or other game of chance, at any place, by
any device whatever, for money or other thing of value but stating that gambling on poker is not
a crime when played for penny ante); id. 849.086(1) (authorizing poker games at racetracks
if those games are played in compliance with Florida law); Mich. Comp. Laws Ann. 750.314
(making it unlawful for any person by playing at cards . . . or by betting or putting up money on
cards . . . [to] win or obtain any sum of money or any goods).
50

State courts which have ruled on the issue are divided as to whether poker constitutes a
game of skill, a game of chance, or a mixture of the two. See Cabot & Hannum, supra, at 456-64
(surveying state court decisions); Bennett M. Liebman, Poker Flops Under New York Law, 17
Fordham Intell. Prop. Media & Ent. L.J. 1, 19-21 (2006) ([M]ost courts find that poker is a
game of chance. . . . [E]ven the jurisdictions that recognize the great level of skill involved in
playing poker nonetheless conclude that the degree of chance involved in the playing of the
game renders poker an activity constituting gambling.). Compare Garrett v. Alabama, 963 So.
2d 700, 700-01 (Ala. Crim. App. 2007) (unpublished) (affirming decision that poker is a game of
chance); Indoor Recreation Enterprises, Inc. v. Douglas, 235 N.W.2d 398, 401 (Neb. 1975)
(holding that poker and bridge are predominately games of chance); Joker Club, L.L.C. v.
Hardin, 643 S.E.2d 626, 629-31 (N.C. Ct. App. 2007) (holding that poker is a game of chance
under the predominate factor test); and Commonwealth v. Dent, 992 A.2d 190, 196 (Pa. Super.
2010) (applying predominate factor test and finding that Texas Holdem is a game of chance);
with Charnes v. Cent. City Opera House Assn, 773 P.2d 546, 551 (Colo. 1989) (holding that,
although card games played at an event, including poker, do require skill, it also involves an
element of chance, and that this element is sufficient to qualify it as gambling under state law);
State ex rel. Schillberg v. Barnett, 488 P.2d 255, 257-59 (Wash. 1971) (same); and PPA Mot. for
Leave to File an Amicus Br. Ex. E (Town of Mount Pleasant v. Chimento, No. 98045DB (Mt.
Pleasant (S.C.) Muni. Ct. Feb. 19, 2009), Doc. Entry 74, July 3, 2012 (stating that poker is a
game of skill but nevertheless finding defendants guilty of a state gambling offense since that
criteria was not clearly relevant to state law definition of gambling), appeal filed, No. 2009-CP-
10-001551 (S.C. Ct. App. Oct. 1, 2009). Cf. State v. Coats, 74 P.2d 1102 (Or. 1938) (Poker,
when played for money, is a gambling game, but, since it involves a substantial amount of skill
51

and judgment, it cannot reasonably be contended that it is a lottery.). But see Def.s Letter
Reply to Govt Aug. 17, 2012 Letter 1, Doc. Entry 108, Aug. 20, 2012 (citing foreign cases
finding that poker is a game of skill).
Many states which do not explicitly include poker in their definition of gambling have
nevertheless found that poker is gambling. See, e.g., Garrett, 963 So. 2d at 700 (holding that
poker is covered by a state gambling statute); State v. Duci, 727 P.2d 316, 319 (Ariz. 1986)
(holding that poker is covered by a state gambling statute which defines gambling as betting on
the result of any game of skill or chance); People v. Mitchell, 444 N.E. 2d 1153, 1155 (Ill. App.
Ct. 1983) (same); State v. Schlein, 253 Kan. 205, 305 (1993) (holding that a location which hosts
a poker tournament is a gambling place under state law and an individual who enters the
premises where gambling is occurring, with the intent to participate in the poker tournament, has
entered into a gambling place); Joker Club LLC, 643 S.E. 2d at 630-31 (holding that poker is
gambling under state law); Dent, 992 A.2d at 196 (same); Barnet, 488 P.2d at 258 (same); cf.
Emerson v. Townsend, 73 Md. 224 (1890) (money loaned for poker was loaned for gambling).
Federal courts have generally treated poker as a game of chance and characterized it as
gambling. See, e.g., Johnson v. Collins Entmt Co., Inc., 199 F.3d 710, 720 (4th Cir. 1999)
(The regulation of lotteries, betting, poker, and other games of chance touch all of the above
aspects of the quality of life of state citizens.); Mashantucket Pequot Tribe v. Connecticut, 913
F.2d 1024, 1027 n.5 (2d Cir. 1990) (The games of chance that Connecticut permits at the Las
Vegas nights include blackjack, poker, dice, money-wheels, roulette, baccarat, chuck-a-luck,
pan game, over and under, horse race games, acey-ducey, beat the dealer, and bouncing ball.);
Percifield v. United States, 241 F.2d 225, 226 (9th Cir. 1957) ([A]ppellant operated a gambling
casino at Rangely, Colorado, known as the Ace-High Club. This contained a bar, a lounge, a
52

cafe, and a casino room where games of chance were played, including blackjack or 21, poker,
craps or dice, as well as slot machines.); Mich. Gambling Opposition v. Norton, 477 F. Supp. 2d
1, 19 (D.D.C. 2007) (Class II gaming [under the Indian Gaming Regulatory Act, see Part
V(B)(3)(a), infra] includes games of chance such as bingo or poker.); Valley Broadcasting Co.
v. United States, 820 F. Supp. 519, 522 (D. Nev. 1993) (Plaintiffs desire to broadcast
commercials related to legal gaming activities located in Nevada such as blackjack, craps, poker,
roulette, slot machines, and other lawful games of chance.); cf. United States v. Gotti, 459 F.3d
296, 342 (2d Cir. 2006) (finding that Joker Poker machines were gambling devices under New
York law based upon their similarity to poker, as the defendant concedes that the games in
question had the theme of poker, and he has not contended in his brief that chance does not play
a material role in the outcome of a poker game), cert. denied sub. nom., Ciccone v. United
States, 551 U.S. 1144 (2007).
6. Compared to Video or Joker Poker
Courts have also been asked to rule on the legality of activities involving video or Joker
Poker machines. A video poker machine is an electronic device with a video screen at the top
and buttons to operate its functions. The object of playing a video poker machine is to obtain the
best poker hand possible on the video screen. The machine awards points for winning poker
hands. United States v. Conley, 92 F.3d 157, 159 n.1 (3d Cir. 1996). While game play on these
mechanical devices is somewhat similar to playing live poker, video poker machine gambling
entails less skill and hence more chance. United States v. Conley, 859 F. Supp. 864, 869 (W.D.
Pa. 1994) (referencing the affidavit of an FBI agent), affd, Conley, 92 F.3d 157; see also United
States v. 294 Various Gambling Devices, 718 F. Supp. 1236, 1243 (W.D. Pa. 1989) ([A]ll the
skill elements associated with the ordinary game of draw poker are conspicuously absent in the
53

video version. In video poker there is no raising, no bluffing, no money management skills. The
players only skill is to recognize possible combinations and basic statistical probabilities. . . .
Even a player with minimal experience can discard the least desirable cards and retain those
cards which provide the greatest likelihood for a winning combination, but the cards drawn are
produced at random and only chance determines whether a player wins or loses. Furthermore,
even this limited skill element is countered in the long run by what is called a retention ratio.
Over time the video poker machine is programmed to retain a set percentage of all credits
played, so that over the long haul even the astute player cannot defeat the retention ratio.).
Unlike live poker or internet poker, video poker is house-banked; players play against the
machine (the house) rather than other players.
C. Evidence at Trial
The essential facts of the case are largely undisputed. The defendant, in partnership with
two others, operated a poker club in the back room of a warehouse out of which he conducted a
legitimate business selling electric bicycles. Tr. of Trial 277:12 281:19 (Testimony of Jacek
Meckelberg), July 10, 2012. Games were generally held on Mondays and Thursdays, see, e.g.
Tr. of Trial 47:9-10 (Testimony of Joseph George Monteleone), July 9, 2012, although there was
some evidence to suggest that this schedule was not adhered to with full regularity. Tr. of Trial
305:8-23 (Testimony of Jonathan Seda), July 10, 2012 (indicating that sometimes there were not
enough players to get a poker game started). Games were advertised via word-of-mouth and text
messages sent to potential participants by the partnership. E.g. id. 63:7-12 (Testimony of Joseph
George Monteleone). The club contained two tables, at which No Limit Texas Holdem was
played. Id. 57:23 58:1 (Testimony of Joseph George Monteleone). A 1-2 game was played
at one of the tables; a 5-5 game was played at the other. Id. In a 5-5 game, one designated
54

player would have to bet $5 (the small blind), and another designated player would have to bet
$5 (the big blind), regardless of what cards they held in their hand. Id. 32:17 33:10. In the 1-2
game, the small blind was $1, and the big blind was $2. Id. 58:2-5. The average amount of
chips purchased by the players, or buy-in, ranged from $100 for the 1-2 game, Tr. of Trial
182:6-8 (Testimony of Deborah Berardi), July 10, 2012, to $300 for the 5-5 game, Id. 182:9-10
(Testimony of Deborah Berardi). See also Tr. of Trial 58:7-12 (Testimony of Joseph George
Monteleone), July 9, 2012 (stating that the average buy-in for the 1-2 game was $100-300); id.
303:15-19 (Testimony of Jonathan Seda) (A. If it was a one-two game, the minimum buy-in
would be 60 bucks. The max you can come into the game with is 300. Q. Was there a bigger
table, as well? A. Rarely. If it was, it was a five-five, and I think the max would be like 500.).
Games could last as long as eight hours. Tr. of Trial 47:7-8 (Testimony of Joseph George
Monteleone), July 9, 2012 (Q: And about how many times did you gamble [at the defendants
establishment]? A: From December of 2010 til February 2011 twice a week.); id. 59:12-21
(Q: When did you typically arrive when you played games at [the defendants establishment]?
A: Usually, give or take, 10:00 p.m. Q: How long did you typically play? A: Four to five hours.
Usually, I would leave around 2:00, between 2:00 and 3:00 a.m. Q: Was the game breaking up
when you left? A: No. Q: Do you know when it ended? A: Various nights, 6:00, 6:00 a.m.,
7:00 a.m.).
Players were plied with free food and drinks by a waitress to induce them to stay and play
longer. E.g. Tr. of Trial 96:12-17 (Testimony of UC4783), July 9, 2012. A five percent rake
for the house was collected by the dealers from each pot. Id. 105:15-20. Dealers were paid
twenty-five percent of the rake. Tr. of Trial 317:8-11 (Testimony of Jonathan Seda), July 10,
55

2012. The remaining funds from the rake were used for expenses relating to the operation of the
business and for profits. See id. 322:17 - 323:3; id. 284:24-25 (Testimony of Jacek Meckelberg).
Other than the operation of these games, no unlawful conduct by the defendantsuch as
money laundering or loan-sharkingwas shown. No connection to organized crime was
suggested.
III. Federal Rule of Criminal Procedure 29
Under Federal Rule of Criminal Procedure 29, [a]fter the government closes its evidence
or after the close of all the evidence, the court on the defendants motion must enter a judgment
of acquittal of any offense for which the evidence is insufficient to sustain a conviction. Fed. R.
Crim. P. Rule 29(a). Decision may be reserved until after the jury returns a verdict of guilty. Id.
29(b).
A defendant challenging his conviction on the basis of the insufficiency of evidence
bears a heavy burden. United States v. Henry, 325 F.3d 93, 103 (2d Cir. 2003). His conviction
must be affirmed if any rational trier of fact could have found the essential elements of the
crime beyond a reasonable doubt. United States v. Florez, 447 F.3d 145, 154 (2d Cir. 2006)
(emphasis in original). The evidence must be viewed in the light most favorable to the
government. United States v. Pizzonia, 577 F.3d 455, 462 (2d Cir. 2009).
Even though the rule speaks only of insufficiency of evidence, it obviously covers a case
where the alleged or proved conduct does not violate the statute charged. In a criminal case, a
failure of the indictment to charge an offense may be treated as a jurisdictional defect. United
States v. Foley, 73 F.3d 484, 488 (2d Cir.1996), overruled in part on other grounds, Salinas v.
United States, 522 U.S. 52 (1997). A court will grant a motion under Rule 29 where the conduct
does not constitute a crime.
56

IV. Rules of Statutory Construction
A. Generally
[S]tatutory construction must begin with the language employed by Congress and the
assumption that the ordinary meaning of that language accurately expresses the legislative
purpose. United States v. Albertini, 472 U.S. 675, 680 (1985); see also, e.g. United States v.
Piervinanzi, 23 F.3d 670, 677 (2d Cir. 1994). Where a term in a criminal statute is undefined,
courts resort to dictionaries to determine its ordinary meaning. See, e.g., United States v.
Santos, 553 U.S. 507, 511 (2008) (plurality op.) (relying on the Oxford English Dictionary, the
Random House Dictionary of the English Language, and Websters New International
Dictionary to define the term proceeds); see also United States v. Broxmeyer, 616 F.3d 120,
125 (2d Cir. 2010) (consulting the Random House Dictionary of the English Language to
determine the meaning of persuade, induce, and entice; although these terms were not
defined in the statute, they are words of common usage that have plain and ordinary
meanings). Should Congress use a common-law term in a statute, it is assumed that the term .
. . comes with a common law meaning, absent anything pointing another way. Safeco Ins. Co. of
America v. Burr, 551 U.S. 47, 58 (2007). The meaning of doubtful terms or phrases may [also]
be determined by reference to their relationship with other associated words or phrases. United
States v. Dauray, 215 F.3d 257, 260, 262 (2d Cir. 2000). Moreover, where general words are
accompanied by a specific enumeration of persons or things, the general words should be
limited to persons or things similar to those specifically enumerated. Id. When the plain
language and canons of statutory interpretation fail to resolve statutory ambiguity, reference will
be made to legislative history. See, e.g., Lee v. Bankers Trust Co., 166 F.3d 540, 544 (2d Cir.
1999).
57

B. Rule of Lenity
Interpretation of criminal statutes is guided by unique considerations. As the Supreme
Court has explained:
Although it is not likely that a criminal will carefully consider the text of the law
before he murders or steals, it is reasonable that a fair warning should be given to
the world in language that the common world will understand, of what the law
intends to do if a certain line is passed. To make the warning fair, so far as
possible the line should be clear.

McBoyle v. United States, 283 U.S. 25, 27 (1931). If a criminal statute remains unclear even
when viewed in context, [t]he rule of lenity requires ambiguous criminal laws to be interpreted
in favor of the defendants subjected to them. Santos, 553 U.S. at 514. The Supreme Court
declared:
This venerable rule not only vindicates the fundamental principle that no citizen
should be held accountable for a violation of a statute whose commands are
uncertain, or subjected to punishment that is not clearly prescribed. It also places
the weight of inertia upon the party that can best induce Congress to speak more
clearly and keeps courts from making criminal law in Congresss stead.

Id.
While questions of burdens of proof generally apply to factual matters, the rule of lenity,
in essence, places a burden of proof on the government with respect to statutory interpretation.
In order to prevail, the government must show that it is more probable than not that the meaning
that it relies upon is the appropriate interpretation of the statute. A state of equipoise on the
issues requires favoring the defendants view. See id. at 513-14 (stating that, where two
competing definitions of a critical statutory term are equally plausible, the tie must go to the
defendant). The government bears the burden of proving by a preponderance standard any
factual propositions that underlie its interpretation of the statute.
58

The rule of lenity is especially appropriate in construing . . . predicate offenses under the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961(1) (1994 ed., Supp. IV),
such as illegal gambling under the IGBA. Skilling v. United States, 130 S. Ct. 2896, 2932
(2010).
A statute in not ambiguous for purposes of lenity merely because it [i]s possible to
articulate a construction more narrow than that urged by the Government. Moskal v. United
States, 498 U.S. 103, 108 (1990). Lenity is reserved . . . for those situations in which a
reasonable doubt persists about a statutes intended scope even after resort to the language and
structure, legislative history, and motivating policies of the statute. Id. (quoting Bifulco v.
United States, 447 U.S. 381, 387 (1980)). It is a doctrine of last resort. United States v.
Hescorp, Heavy Equip. Sales Corp., 801 F.2d 70, 77 (2d Cir.1986); see also United States v.
Granderson, 511 U.S. 39, 54 (1994) (applying the rule of lenity where text, structure, and
history fail to establish that the Governments position is unambiguously correct).
V. Federal Gambling Laws
A. Illegal Gambling Business Act
1. Statutory Language
Close reading of the IGBA reveals that it requires both a violation of an applicable state
law and proof of additional federal elements. The IGBA provides, in pertinent part, that:
(a) Whoever conducts, finances, manages, supervises, directs, or owns all
or part of an illegal gambling business shall be fined under this title or imprisoned
not more than five years, or both.
(b) As used in this section--
(1) illegal gambling business means a gambling business which--
59

(i) is a violation of the law of a State or political subdivision in
which it is conducted;
(ii) involves five or more persons who conduct, finance, manage,
supervise, direct, or own all or part of such business; and
(iii) has been or remains in substantially continuous operation for a
period in excess of thirty days or has a gross revenue of $2,000 in any
single day.
(2) gambling includes but is not limited to pool-selling, bookmaking,
maintaining slot machines, roulette wheels or dice tables, and conducting
lotteries, policy, bolita or numbers games, or selling chances therein.
(3) State means any State of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, and any territory or possession of the United
States.
. . .
(e) This section shall not apply to any bingo game, lottery, or similar
game of chance conducted by an organization exempt from tax under paragraph
(3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as
amended, if no part of the gross receipts derived from such activity inures to the
benefit of any private shareholder, member, or employee of such organization
except as compensation for actual expenses incurred by him in the conduct of
such activity.

18 U.S.C. 1955 (emphasis added).
The structure of the IGBA is similar to that of RICO, which was passed as part of the
same act. See Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84 Stat. 922 (codified
in scattered sections of the U.S.C.). While the IGBA declar[es] that certain gambling activities
violate federal as well as state law, Iannelli v. United States, 420 U.S. 770, 788 (1975), it does
not merely federalize state gambling crimes. In order to run afoul of the IGBA, the defendant
must operate an illegal gambling business as defined by federal law. See Sanabria v. United
States, 437 U.S. 54, 70 (1978) (holding that, although a gambling business may violate
multiple provisions of state law, the allowable unit of prosecution under the statute for the
purposes of double jeopardy is participation in a particular gambling business). To show that
the defendant did so, the government must prove not only that the gambling activities conducted
by the business violated state law, 18 U.S.C. 1955(b)(1)(i), but also two additional, uniquely
60

federal elements. Id. 1955(b)(1)(ii)-(iii); see also Sanabria, 437 U.S. at 70 (Congress did not
assimilate state gambling laws per se into the federal penal code, nor did it define discrete acts of
gambling as independent federal offense.). These elementsthat the business must (1) include
five or more employees, 1955(b)(1)(ii), and (2) be in operation for thirty days or earn more
than $2,000 in one day, 1955(b)(1)(iii)limit the reach of the statute to enterprises of a
particular size. Thus, even if poker were to constitute gambling under the IGBA, most kitchen
table poker games would not satisfy either or both of these requirements.
The IGBA does not define the federal component of gambling precisely. Though games
of chance run by tax exempt organizations are excluded from prosecution under 1955(e),
1955(b)(2) makes no mention of chance, skill, or any other characteristic defining gambling.
While it enumerates a list of activities that constitute gambling, this list is not exclusive. See
Organized Crime Control: Hearings Before Subcomm. No. 5 of the H. Comm. on the Judiciary,
91
st
Cong. 325 n.66 (1970) (hereinafter House Judiciary Hrgs) (Committee on Federal
Legislation, The Association of the Bar of the City of New York, The Proposed Organized
Crime Control Act of 1969 (S. 30) (1970)) (The term gambling is said to include certain
specified activities . . . without indicating whether the list is supposed to be all-inclusive.). Nor
does the statute explicitly state how this list of gambling activities in subsection (b)(2) relates to
the crime of running an illegal business as defined by subsection (b)(1). Resort to techniques
other than plain meaning is necessary to determine the meaning of the term and its relation to the
rest of the statute.
2. Dictionary Definitions
Dictionary definitions of gambling vary widely. Some broadly include play[ing] a[ny]
game for money or property. Gamble, Merriam-Webster Online Dictionary,
61

http://www.merriam-webster.com/dictionary/gamble (last visited July 10, 2012); see also
Gambling, Blacks Law Dictionary 748 (9th ed. 2009) (The act of risking something of value,
esp. money, for a chance to win a prize.). Others define gambling as limited to playing games
of chance for money. Gamble, The Oxford English Dictionary (2d ed. 1989) (To play games of
chance for money, esp. for unduly high stakes; to stake money (esp. to an extravagant amount)
on some fortuitous event.), available at http://oed.com/view/Entry/76447; Gambling, Websters
Third New International Dictionary 932 (1971) (1: the act or practice of betting : the act of
playing a game and consciously risking money or stakes on its outcome; 2: the act of risking
something on an uncertain event); Gamble, Websters Third New International Dictionary 932
(1971) (1: a: to play a game of chance for money or other stakes; b: to wager money or stakes
on an uncertain outcome (as of a horse or an athletic game); 2: to stake something of value on an
uncertain event or contingency); Gamble, Merriam-Websters Collegiate Dictionary 478 (10th
ed. 1999) (1: a: to play a game for money or property b: to stake something on an uncertain
outcome; 2: to stake something on a contingency; to take a chance); Gamble, American
Heritage Dictionary of the English Language, http://ahdictionary.com/word/search.html?q
=gambling (last visited July 20, 2012) ([t]o bet on an uncertain outcome, as of a contest, or
[t]o play a game of chance for stakes).
Poker is sometimes treated as a synonym both for gambling generally and for the games
enumerated in the IGBA. See Rogets International Thesaurus 514.7 (3d ed. 1962) (listing, as
synonyms for gamble, (games of chance) . . . horse racing, keno, lotto, . . . roulette, . . . ;
poker, faro, etc. (card games)).
62

3. Common Law
Most states find that an activity is . . . illegal gambling if a person risks something of
value on an activity predominately determined by chance for the opportunity to win something of
greater value than he or she risked. Cabot & Hannum, supra, at 445 (emphasis added); see
also, e.g., Morrow v. State, 511 P.2d 127, 129 (Alaska 1973). But see, e.g., Ariz. Rev. Stat. Ann.
13-3301(4) (Gambling or gamble means one act of risking or giving something of value
for the opportunity to obtain a benefit from a game or contest of chance or skill or a future
contingent event but does not include bona fide business transactions which are valid under the
law of contracts including contracts for the purchase or sale at a future date of securities or
commodities, contracts of indemnity or guarantee and life, health or accident insurance.); 720
Ill. Comp. Stat. 28-1 (A person commits gambling when he . . . [p]lays a game of chance or
skill for money or other thing of value . . . .); Charnes, 773 P.2d at 551 (While poker and
perhaps some of the wagering games might involve some skill, these games certainly are
contingent in part upon chance, and when, as here, the games involve risking a thing of value
for gain, they constitute a form of gambling in its commonly understood sense.); Barnett, 488
P.2d at 257-59 (Wash. 1971) (holding that a game which involves an element of chance, even if
skill is also involved, is sufficient to qualify it as gambling under state law).
4. Legislative History
a. Purpose of the Statute
Concerns about organized crime appear to have been the major driving force behind the
Organized Crime Control Act of 1970 generally, as well as the IGBA specifically. The goal of
18 U.S.C. 1955 was to give the Federal Government a new substantive weapon, a weapon
63

which will strike at organized crimes principal source of revenue: illegal gambling. S. Rep.
No. 91-617, at 71 (1969); see also Organized Crime Control Act of 1970, Pub. L. No. 91-452, 84
Stat. 922, 923 (codified in scattered sections of 18 U.S.C.) (stating that the purpose of the act was
to seek the eradication of organized crime in the United States by strengthening the legal tools
in the evidence-gathering process, by establishing new penal prohibitions, and by providing
enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in
organized crime). As President Nixon explained in his Message to Congress regarding the bill:
While gambling may seem to most Americans to be the least reprehensible of all
the activities of organized crime, it is gambling which provides the bulk of the
revenues that eventually go into usurious loans, bribes of police and local
officials, campaign contributions to politicians, the wholesale narcotics traffic,
the infiltration of legitimate businesses, and to pay for the large stables of lawyers
and accountants and assorted professional men who are in the hire of organized
crime.

115 Cong. Rec. 10,043 (Apr. 23, 1969) (Organized Crime Message from the President of the
United States).
Prior to its enactment, the existing interstate-nexus requirement permitted large intrastate
gambling rings to escape federal prosecution. See House Judiciary Hrgs at 156-57 (statement
of Atty Gen. John N. Mitchell) (Federal jurisdiction under existing law . . . depends upon the
establishment of a specific link to interstate commerce on a case-by-case basis. As a result,
many large-scale and lucrative illegal gambling operations, which we have reason to believe are
dominated by the Cosa Nostra, escape prosecution.). Through the IGBA, Congress sought to
close this loophole by obviating the need for proof of an interstate nexus in each case.
Measures Relating to Organized Crime: Hearings Before the Subcomm. on Crim. Laws &
Procedures of the S. Comm. on the Judiciary, 91st Cong. 382-83 (1969) (hereinafter Senate
Judiciary Hrgs) (statement of Assistant Atty Gen. Will Wilson); see also 116 Cong. Rec. 605
64

(Jan. 21, 1970) (statement of Sen. Allott). Federal enforcement was seen as particularly
necessary in light of what was perceived as a failure to prosecute gambling offenses due to the
widespread corruption of state officials by organized crime. S. Rep. No. 91-617, at 72 (The
effect of . . . police corruption is stultifying on Federal-State cooperation in the campaign against
organized gambling. This inability of Federal agencies properly to enforce the statutes within
their jurisdiction is an important basis for the Congress to take action in this area.); Senate
Judiciary Hrgs at 448 (Message from the President of the United States Relative to the Fight
Against Organized Crime) (For most large scale illegal gambling enterprises to continue
operations over any extended period of time, the cooperation of corrupt police or local officials is
necessary.); 115 Cong. Rec. 10,736 (Apr. 29, 1969) (statement of Sen. Hruska) (There are two
reasons for this continued growth of this gambling industry: first, the inability, and second, the
unwillingness of local authorities to take action against it.); 116 Cong. Rec. 591 (Jan. 21, 1970)
(statement of Sen. McClellan) ([S]omething must be done to stop this flow of money to
organized crime from gambling operations, and we must stop the corruption of local officials and
law enforcement by organized crime.); 116 Cong. Rec. 604 (Jan. 21, 1970) (statement of Sen.
Allott) (The IGBA will permit the Federal Government to intervene where local and State
governments have been rendered powerless because of the corruption of responsible officials.).
The IGBA was not designed to define discrete acts of gambling as independent federal
offenses. See Sanabria, 437 U.S. at 70. The debates focused not on prohibiting particular kinds
of gambling, but on targeting particular kinds of criminalsi.e., reaching those who are
engaged in an illicit gambling business of major proportions. S. Rep. 91-617, at 73; H.R. Rep.
91-1549, at 53 (1970), reprinted in 1970 U.S.C.C.A.N. 4007, 4029 (The intent of section 1511
and section 1955, below, is not to bring all illegal gambling activity within the control of the
65

federal government, but to deal only with illegal gambling activity of major proportions. It is
anticipated that cases in which their standards can be met will ordinarily involve business-type
gambling operations [of] considerably greater magnitude than simply meet the minimum
definitions. The provisions of this title do not apply to gambling that is sporadic or of
insignificant monetary proportions. It is intended to reach only those persons who prey
systematically upon our citizens and whose syndicated operations are so continuous and so
substantial as to be of national concern, and those corrupt state and local officials who make it
possible for them to function.); Senate Judiciary Hrgs at 449 (Message from the President of
the United States Relative to the Fight Against Organized Crime) (The purpose of this
legislation is to bring under federal jurisdiction all large-scale illegal gambling operations which
involve or affect interstate commerce.). See also United States v. Cook, 922 F.2d 1026, 1034
(2d Cir. 1991), cert. denied 500 U.S. 941 (1991) (noting that the federal interest underlying the
IGBA is the eradication of large-scale gaming); United States v. Farris, 624 F.2d 890, 895
(9th Cir. 1980), cert. denied, 449 U.S. 1111 (1981), superceded by statute, Indian Gaming
Regulatory Act of 1988, Pub. L. No. 100-497, 102 Stat. 2467, as recognized in United States v.
E.C. Investments, Inc., 77 F.3d 327 (9th Cir. 1996) (The policy underlying 1955 is that large-
scale gambling is dangerous to federal interests wherever it occurs [including on an Indian
reservation].). Congress found that, where a state had outlawed a particular form of gambling,
organized crime had developed complex channels to capitalize on the opportunity presented.
United States v. Sacco, 491 F.2d 995, 1000 & n.6 (9th Cir. 1974) (citing Presidents Commn on
Law Enforcement and Administration of Justice, Report: The Challenge of Crime in a Free
Society 189 (1967); Task Force Report: Crime and its Impact - an Assessment 52-53 (1967)).
66

Congress did not propose to supplant the traditional role of states in regulating gambling.
Iannelli, 420 U.S. at 788 (noting that Congress recognize[ed] that gambling activities normally
are matters of state concern in limiting the scope of the federal statute to large-scale gambling
operations); House Judiciary Hrgs at 194 (statement of Assistant Atty Gen. Will Wilson)
([W]e are not trying to bring the whole gambling enforcement problem into the Federal
jurisdiction, the Federal courts.). Rather, [t]he purpose of the statute is simply to make the
Federal Government a more effective member of the established State-Federal law enforcement
partnership which has long been waging a common war on organized crime and illegal
gambling. 116 Cong. Rec. 604 (Jan. 21, 1970) (statement of Sen. Allott); see also, e.g., House
Judiciary Hrgs at 170 (statement of Atty Gen. John Mitchell) (stressing that the IGBA does
not proscribe gambling which is legitimate under state law, nor does it prohibit lotteries and
bingo games conducted for charitable purposes. The federal proposal will not interfere with a
States right to regulate the conduct of citizens within its jurisdiction.); 116 Cong. Rec. 601
(Jan. 21, 1970) (statement of Sen. Hruska) (stating that the IGBA gives the Attorney General
broad latitude to assist local and state government in cracking down on illegal gambling, the
wellspring of organized crimes reservoir) (quoting Organized Crime Message from the
President of the United States, April 23, 1969); 116 Cong. Rec. 591 (Jan. 21, 1970) (statement of
Sen. McClellan) ([The IGBA] would give the Federal Government two new means to aid the
States in combating large-scale gambling.).
b. Definition of Gambling Generally
In its original form, the IGBA did not include a separate definition of gambling. The
statutes scope did not encompass all state gambling crimes, but only betting, lottery, or
numbers activity:
67

(a) Whoever conducts, finances, manages, supervises, directs, or owns all
or part of an illegal gambling business shall be fined under this title or imprisoned
not more than five years, or both.
(b) As used in this section, the term illegal gambling business means
betting, lottery, or numbers activity which
(1) is a violation of the law of a State or political subdivision thereof;
(2) involves five or more persons who operate, work in, participate in, or
derive revenue from said betting, lottery, or numbers activity; and
(3) has been or remains in operation for a period in excess of thirty days or
has a gross revenue of $2,000 in any single day.
. . .
(d) This section does not apply to any bingo game, lottery, or similar game
of chance conducted by an organization exempt from tax under section 501(c)(3)
of the Internal Revenue Code of 1954, as amended, if no part of the gross receipts
derived from such activity inures to the benefit of any private shareholder,
member, or employee of such organization except as compensation for actual
expenses incurred by him in the conduct of such activity.

Illegal Gambling Business Control Act of 1969, S. 2022, 91
st
Cong., 1
st
Sess. 201; see also
H.R. 10683, 91
st
Cong., 1
st
Sess. 201 ([T]he term illegal gambling business means betting,
lottery, or numbers activity . . . [and] involves five or more persons who operate, work in,
participate in, or derive revenue from said betting, lottery, or numbers activity . . . .); H.R.
10789, 91
st
Cong., 1
st
Sess. 201(b) (same); H.R. 10944, 91
st
Cong, 1
st
Sess. 201(b) (same);
H.R. 11026, 91
st
Cong, 1
st
Sess. 201(b) (same); H.R. 11345, 91
st
Cong, 1
st
Sess. 201(b)
(same); H.R. 13331, 91
st
Cong, 1
st
Sess. 201(b) (same). No discussion of why a separate
definition of gambling was included in the final version of the bill could be found. Nor could it
be determined why that definition was changed to specify the nine enumerated games.
Descriptions of the statutes definition of an illegal gambling business varied. One of the
bills sponsors declared that [a]n illegal gambling business is defined as, first, violating State
law, possibly implying that the IGBA did not include a separate federal definition of gambling.
116 Cong. Rec. 601 (Jan. 21, 1970) (statement of Sen. Hruska); see also Senate Judiciary Hrgs
at 381 (statement of Assistant Atty Gen. Will Wilson) ([W]e have defined, for purposes of this
68

title, an illegal gambling business as one which is in violation of state or local law . . . .); House
Judiciary Hrgs at 156 (statement of Atty Gen. John Mitchell) ([The IGBA] will make it a
Federal offense to engage in a gambling operation which is illegal under State law . . . .); 116
Cong. Rec. 35196 (Oct. 6, 1970) (statement of Sen. Poff) (same); 116 Cong. Rec. 35304 (Oct. 6,
1970) (statement of Sen. Railsback) ([The IGBA] enlarges Federal jurisdiction over illegal
gambling activities, which are defined as violating a law, involving 5 or more persons, operating
for more than 30 days or having a gross income of $2,000 in one day.). Similarly, another
senator stated that [t]he approach of the bill is to define an illegal gambling business in terms
of the number of people involved and in terms of gross receipts and length of operation, rather
than in relation to a federal gambling definition. 116 Cong. Rec. 602 (Jan. 21, 1970) (statement
of Sen. Yarborough). Yet other members of Congress highlighted the fact that the statute
targeted particular games. See 116 Cong. Rec. 603 (Jan. 21, 1970) (statement of Sen. Allott)
(The statute defines an illegal gambling business as one including such forms of betting as
bookmaking or numbers and which first, is a violation of state law . . . . (emphasis added));
House Judiciary Hrgs at 287 (statement of Rep. Halpern) ([The IGBA and 18 U.S.C. 1511]
define illegal gambling business so as to exclude bingo, lotteries, or games of chance
conducted by religious or charitable organizations but would include any other betting, lottery or
numbers activity in violation of State or local law . . . .).
In its report, the Senate Committee on the Judiciary indicated that the definition of
gambling was limited to particular games. S. Rep. No. 91-617, at 73 (It defines an illegal
gambling business as including pool selling, bookmaking, maintaining slot machines, numbers,
and other gambling activity which(1) is a violation of State law . . . .); id. (Sections
1955(b)(1)-(3) define an illegal gambling business, as above, as gambling or numbers activity .
69

. . . See proposed section 1511, above [discussed infra at Part V(B)(1)].). While the Senate
Committee went on to say that State and gambling are also defined comprehensively, it is
unclear whether it meant that the terms were defined broadly, or merely defined thoroughly.
Congress never discussed the meaning of gambling in the IGBA more generally. It did
not address whether it encompassed games of some skill, or merely games predominated by
chance. The New York City Bar Associations Committee on Federal Legislation, however,
assumed, in its report to Congress, that the statute define[d] gambling broadly to include
virtually all games of chance. House Judiciary Hrgs at 323 n. 61 (Committee on Federal
Legislation, The Association of the Bar of the City of New York, The Proposed Organized
Crime Control Act of 1969 (S. 30) (1970)).
Nor did Congress debate whether a game would have to be house-banked to constitute
gamblingalthough one senator expressed concern at the ability of organized crime to make
large amounts of money from non-house-banked games. See Senate Judiciary Hrgs at 495 ([In
a numbers game, b]ets are placed on any three-digit numbers from one to 1,000. The
mathematical odds are 1,000 to one. Yet seldom, however, is the payoff over 500 to one, and
then, on cut numbers . . . it is even less. The gambler thus seldom gambles. In addition, he
hedges his bet in a complicated layoff system. . . . The professional bookmaker . . . seldom
gambles either. He gives track odds or less without track expenses, pays no taxes, is invariably
better capitalized or lays off a certain percentage of his bets with other gamblers, takes credit
bets to stimulate the play, and may even fix the event by corrupting private and professional
sports.).
70

c. Discussion of Particular Games
In debating the IGBA, Congress stated that, at the time of the statutes enactment, the
Mafia played a significant role in organizing a wide array of gambling activities.
Law enforcement officials agree almost unanimously that gambling is the greatest
source of revenue for organized crime. It ranges from lotteries, such as numbers
. . . to off-track horse betting . . . . In large cities where organized criminal groups
exist, very few of the gambling operators are independent of a large organization.
. . .Most large-city gambling is established or controlled by organized crime
members through elaborate hierarchies. There is no accurate way of ascertaining
organized crimes gross revenue from gambling in the United States. Estimates of
the annual intake have varied from $7 to $50 billion. Legal betting at racetracks
reaches a gross annual figure of almost $5 billion, and most enforcement officials
believe that illegal wagering on horse races, lotteries, and sporting events totals at
least $20 billion each year. Analysis of organized criminal betting operations
indicates that the profit is as high as one-third of gross revenueor $6 to $7
billion each year. While the Commission cannot judge the accuracy of these
figures, even the most conservative estimates place substantial capital in the hands
of organized crime leaders.

Report of the Presidents Commission on Law Enforcement and Administration of Justice, The
Challenge of Crime in a Free Society 188-189 (1967) (cited in Iannelli, 420 U.S. at 788); see
also 115 Cong. Rec. 10,041 (Apr. 23, 1969) (Organized Crime Message from the President of
the United States) (Many decent Americans contribute regularly, voluntarily and unwittingly to
the coffers of organized crimethe suburban housewife and the city slum dweller who place a
twenty-five cent numbers bet; the bricklayer and college student who buy a football card; the
businessman and secretary who bet illegally on a horse.); 116 Cong. Rec. 590 (Jan. 21, 1970)
(Statement of Sen. McClellan) (Organized crime, of course, does not limit its illegal gambling
operations to horse racing and sporting events. It also includes gambling in the form of lotteries,
dice games, and illegal casinos.). According to the Attorney General, In an area which
organized crime has invaded, there are few independent gamblers. Even if competitors have the
capital required to make it on their own, the syndicate has methods of persuading them to join
71

up, or to go into business elsewhere. House Judiciary Hrgs at 153 (statement of Atty Gen.
John N. Mitchell).
Debates focused primarily on Mafia-run numbers racketsintrastate lotteries that offered
lopsided odds and thus leached significant sums from poor communities. See Senate Judiciary
Hrgs at 495 (statement of Sen. McClellan) (Most large slum areas, for example, have within
them some form of a lottery known as numbers. . . . Assuming an honest payoffoften not the
casethe ultimate effect of the racket is to drain the work income of slum residents away from
food, clothing, shelter, health, and education.); House Judiciary Hrgs at 87 (statement of Sen.
McClellan) (Cosa Nostra informant Joe Valachi . . . described well the impact of organized
gambling on its direct victims when he said: Its poor people that play the numbers; and if you
want the truth, most of them play because they are desperate for money and have no other way to
get it.).
In his message to Congress on Organized Crime, the President singled out the numbers
racket as a particularly significant and pernicious form of gambling. See Senate Judiciary Hrgs
at 444 (1969) (Message from the President of the United States Relative to the Fight Against
Organized Crime). Statements by other public officials echoed the sentiment. Id. at 158
(statement of Sen. Tydings) (The greatest single source of revenue for organized crime is its
gambling activities, which net an estimated seven (7) to fifty (50) billion dollars a year . . . . A
great portion of this is gained through numbers rackets, draining from the poorest inhabitants of
our ghettos and slums and their families precious dollars which should be spent for food, shelter
and clothing.); id. at 425 (statement of William Hundley, former head of the Organized Crime
and Racketeering Section at the Department of Justice) ([P]robably the only area where [the
IGBA] would be helpful would be in getting at big numbers rackets, because in my experience in
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the Justice Department any gambling operation that was worth Federal concern had an interstate
aspect, and that you could proceed under [the Paraphernalia Act] and the other bills. But some of
the really big numbers operations, particularly in a place like New York, can be, by the nature of
the operation, self-contained . . . and you could use this new [statute] against those. I dont see
that it would be really of much use otherwise in the gambling area. (emphasis added)); id. at
382-83 (statement of Assistant Attorney Gen. Will Wilson) (stating that [v]ery few numbers
operations have been prosecuted at a Federal level because seldom are state lines crossed and
that the IGBA is designed to close this loophole).
Also of particular concern was bookmaking, which often relied on national crime
syndicates. 116 Cong. Rec. 596 (Jan. 21, 1970) (statement of Sen. McClellan) (Bookmaking is
next up the ladder from the numbers, and the bookmaker, who usually employs several solicitors,
is a man of substance.); see also, e.g., The Federal Effort Against Organized Crime: Hearings
Before Subcomm. of the House of Representatives Comm. on Govt Operations, 90
th
Cong. 49
(1967) (Mr. EDWARDS: My friends tell me that [a local] pool hall operator [in a small town]
might make a phone call to a larger city in the general area, where he lays off his bets, or
whatever he doesperhaps a regional headquarters of sorts. Do you get into that phase of it?
[Assistant Atty Gen. Fred M.] VINSON: Yes, sir, we do. . . . He will get what is called the line,
from some expert who will tell him that the proper odds are three points, or what have you, or
that the proper odds on a horse are thus and so. And he pays for that service. And the people
furnishing him those services we are very interested in, because we believe they are closely tied
into organized crime.); id. at 64 (statement of William A. Kolar, Director of the Intelligence
Division, Internal Revenue Service) (It is generally agreed that the flow of money to
bookmakers taking bets on horseracing and sporting events and wagers placed in lottery
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operations total billions of dollars annually. From its huge gambling profits, organized crime is
able to finance other illicit activities.); Senate Judiciary Hearings at 495 (statement of Sen.
McClellan) (The professional bookmaker . . . seldom gambles either. He gives track odds or
less without track expenses, pays no taxes, is invariably better capitalized or lays off a certain
percentage of his bets with other gamblers, takes credit bets to stimulate play, and finally may
even fix the event by corrupting private and professional sports.); 116 Cong. Rec. 604 (Jan. 21,
1970) (statement of Sen. Allott) (discussing arrests of bookmakers).
Scant reference was made to poker. This may be because, at the time, Mafia involvement
in poker games was limited. United States v. Roselli, 432 F.2d 879, 886 n.8 (9th Cir. 1970)
(noting that poker is not traditionally associated with organized crime). One senator expressed
concern that the IGBA would reach poker:
Mr. MIKVA: I would like to yield further but I have more examples of overreach
that would even curl the hair of the gentleman from Virginia.
I do not know how many of my colleagues engage in a friendly game of
poker now and then, but under th[e IGBAs] definition [of gambling] if five or
more of them engage in such a game of poker and it lasts past midnightyou do
have that safeguardthus continuing for a period of 2 days, then you have been
running an organized gambling business and you can get 20 years, and the Federal
Government can grab the pot besides.
. . .
We have a whole series of new crimes involving gambling and some of
them, as I indicated, include even the poker game that goes beyond midnight.
Under the bill, it can be an organized gambling game and one can get up to 20
years for having participated in that poker game.

116 Cong. Rec. 35204-05 (Oct. 6, 1970). Another senator attempted to soothe these concerns not
on the basis that poker is not gambling, but because a friendly poker game would not meet the
other requirements of the statute:
Mr. POFF: I suggest that the gentleman is in error when he poses his hypothetical
statement. I direct his attention to page 11, line 15 and 16 of the bill. There you
will find that illegal gambling means a business and has been and remains in
substantially continuous operation for a period in excess of 30 days or has a gross
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revenue in excess of $2,000 in any single day. The poker game which the
gentleman has described does not meet that criterion.

Mr. MIKVA: But that is not true because later on there is a presumption that it is
an illegal gambling business. That language appears on page 114 and is as
follows:
If five or more persons conduct, finance, manage, supervise,
direct, or own all or part of a gambling business and such business
operates for 2 or more successive days, then, for the purpose of
obtaining warrants for arrests, interceptions, and other searches
and seizures, probable cause that the business received gross
revenue in excess of $2,000 in any single day shall be deemed to
have been established.

Mr. POFF: If they are in a gambling business.

Mr. MIKVA: I suppose it depends on whether you are gambling for profit or
pleasure, but I happen to know a lot of people who do enjoy the profit as well as
the pleasure, and I would hate to rely on the nondefinition or business to protect
somebody from a zealous U.S. attorney.

Id. at 35205.
Another senator complained that Title VIII, in which both the IGBA and 18 U.S.C.
1511 were contained, was overly broad.
The breadth and vagueness of the scheme to obstruct provision [in 1511] are
matched by the lack of precision in defining illegal gambling business.
Although the report states that the law is not intended to cover sporadic or small-
scale gambling or to apply to players in illegal games (pp. 73, 115), the statute
itself easily encompasses such petty crimes and criminals and by its terms could
apply to two men who park illegally on their way to an all-night poker game.

116 Cong. Rec. 854 (Jan. 22, 1970) (statement of Sen. Young).
Other senators did not mention poker or other card games in their discussions of
gambling. Senate Judiciary Hrgs at 495 (statement of Sen. McClellan) (Professional gambling
ranges from simple lotteries to bookmaking on horse or sports events.).
A comprehensive collection of the relevant history is on file in this court. See Doc. Entry
106, Aug. 17, 2012.
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5. Commission on the Review of the National Policy Towards Gambling
In the section immediately following the IGBA, the Organized Crime Control Act of
1970 created a Commission on the Review of the National Policy Towards Gambling and
charged it to conduct a comprehensive legal and factual study of gambling in the United States
and existing Federal, State, and local policy and practices with respect to legal prohibition and
taxation of gambling activities and to formulate and propose such changes in those policies and
practices as the Commission may deem appropriate. Pub. L. No. 91-452, 805, 84 Stat. 922,
939. Although not part of the legislative history of the statute itself, the Commissions final
report, completed in 1976, provides some insight into what a contemporary body, charged with
its responsibilities by the same legislation, considered gambling. See generally Gambling in
America: Final Report of the Commission on the Review of the National Policy Towards
Gambling (1976).
The report does not define gambling under either federal or state law, but acknowledges
the diversity of practices covered by state laws prohibiting gambling. See id. at 35 (Central to
any discussion of illegal gambling is the fact that gambling refers not to a single entity, but to a
number of diverse activities that have differing implications for law enforcement. Illegal games
vary in their structure from highly organized operationsfor instance, the intricate network of
locations and employees involved in a large numbers operationto the spontaneity of street-
corner cardplaying among friends. A numbers operator who pays protection to police and
channels profits into narcotics poses a substantially different threat to the community than does a
social club sponsoring bingo or card games for its members. Public social gambling and the
lower levels of numbers operations are subject to enforcement without use of the sophisticated
tools and procedures required to reach bookmakers, numbers bosses, and organized card or dice
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games.). Rather, the Reports focus is on legal and illegal numbers rackets, bookmaking,
parimutuel betting, off-track betting, lotteries, bingo, and casino games. See generally id.
Scant reference is made to poker in the report. Id. at 39 ([I]n a survey of Washington,
D.C., police officers, respondents evaluated numbers-running and running a poker game as
crimes for which it is difficult to make a case stick.); id. at 79 (stating that poker was among the
most popular games at the turn of the century); id. at 89 tbl 5.7 (listing poker as one of the games
played at legal casinos in Nevada); id. at 176 (Like pool and poker, backgammon has its share
of skillful hustlers who win great sums of money from their unsuspecting opponents.).
Poker was not explicitly included in the list of illegal gambling activities on which the
commission collected survey data, although it was likely included in the survey term casino
games. See id. at 57-77 (discussing data collected in a survey of public participation in and
attitude towards legal gambling (horse track betting, off-track betting, slot machines, keno, legal
casinos, bingo, lotteries, and sports betting parlors) and illegal gambling (sports books, horse
books, numbers, sports cards, and casino games). Although poker is mentioned in the section on
illegal casinos, the report highlighted black jack and roulette as the primary games played in such
establishments. Id. at 176.
6. Subsequent Mafia Involvement in Poker Games
The Mafia appears to have become involved in running poker games as early as 1974
after the passage of the IGBA. See Las Vegas Nites Face Study on Mob Influence, N.Y. Times,
Aug. 14, 1974 (discussing an investigation of organized crime infiltration into Las Vegas Nite
poker and blackjack games at Brooklyn synagogues and churches). It apparently continues to
operate such games. See, e.g., Bruce Golding, Gambler hit with 21 mos., N.Y. Post, Dec. 20,
2011, at 9 (Reputed Mafia associate Michael Mush Russo was slapped with 21 months in the
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slammer yesterday for running poker games and bookmaking operations for the Gambino
family.); Howard Pankratz, 16-year term for gambling figure Jeffrey Castardis Gin Rummy
Club was used as a front, Denver Post, Dec. 15, 2009, at B05 (discussing the conviction of a
defendant with alleged Gambino crime family connections for running an illegal gambling and
loan-sharking operation that included high-stakes poker, as well as sports betting); Lee Hammell,
Card Dealer Testifies Ciampi Wanted Rivals Dead, Worcester (MA) Telegram & Gazette, Oct.
29, 1998, at A17 (describing the testimony of an informant who dealt poker at several Mafia-run
gambling clubs); David Webber, Reputed mobster dealt 7 1/2-year prison sentence, Boston
Herald, Sept. 19, 1995, at 20 (Reputed Mafia soldier Ralph Lamattina began a 7 1/2-year prison
sentence yesterday for running a high stakes poker game . . . .); Richard J. Connolly, Anguilos
Son Found Guilty of Gaming Innocent Finding on Racketeering, Boston Globe, Aug. 14, 1986,
at 25 (Mafia soldier John C. Cincotti, 46, of Wayland, formerly of Bostons North End, was
convicted of racketeering and conducting a high-stakes poker game for his leaders. He could be
sentenced to 40 years in prison and fines of $70,000.); see generally United States v. Angiulo,
847 F.2d 956 (1st Cir. 1988) (discussing an alleged high-stakes poker game run by the Mafia
which led to convictions under, inter alia, 18 U.S.C. 1955); United States v. Dono, No. 07-CR-
725, 2009 WL 2405886 (E.D.N.Y. Aug. 3, 2009) (Weinstein, J.) (providing a statement of
reasons for sentence imposed on a Colombo crime family associate for a violation 1955 by
operating an illegal gambling business of poker games in violation of New York Penal Laws
225.05 and 20, among other offenses, and noting that defendants illegal gambling operations . .
. sustained the mob enterprise); United States v. Uvino, No. 07CR725, 2009 WL 2366562
(E.D.N.Y. July 30, 2009) (Weinstein, J.) (same, noting that defendants gambling activities
sustained the mobs extensive criminal power and that gambling profits . . . constitute the
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lifeblood of a dangerous and destructive criminal enterprise); United States v. Digiacomo, 746
F. Supp. 1176 (D. Mass. 1990) (discussing charges against several alleged Mafiosos for, inter
alia, running illegal poker games); see also Govt Mem. of L. in Opp. to Def.s Rule 29 Mot. Ex.
A-G, Doc. Entry 96, July 27, 2012 (describing recent prosecutions of alleged organized crime
members for, inter alia, running illegal poker games).
B. Other Gambling Statutes
Because context gives meaning, Santos, 553 U.S. at 512, consideration should be given
to how gambling is defined in other portions of the Organized Crime Control Act of 1970, of
which the IGBA was a part. Congressional definitions of gambling in prior and subsequent acts,
while not determinative, may also be persuasive in discerning the definition in the statute before
the court. See McBoyle, 283 U.S. at 26-27 (examining how vehicle is defined in later acts in
interpreting the term as used in the National Motor Vehicle Theft Act); Thielebeule v. M/S
Nordsee Pilot, 452 F.2d 1230, 1232 (2d Cir. 1971) (stating that two statutes that deal with the
matters relating to the same subject matter . . . should therefore be construed in pari materia).
While subsequent statutes can provide further background on Congressional conceptions of
gambling, they can neither broaden nor narrow the definition of gambling under the IGBA.
1. Contemporary with the IGBA
In addition to criminalizing the substantive offense of operating an illegal gambling
business, the Organized Crime Control Act of 1970 separately outlawed a conspiracy to obstruct
the enforcement of state criminal laws with intent to facilitate an illegal gambling business. 18
U.S.C. 1511. Since 1511 and 1955 were enacted together as Parts B and C ( 802-803)
of Title VIII of the Organized Crime Control Act of 1970, P.L. 91-452, 84 Stat. 936-37 (1970),
79

they should be construed in pari materia. United States v. Becker, 461 F.2d 230, 232 (2d Cir.
1972).
The structure of 1511, as well as its definition of an illegal gambling business, is similar
to that of the IGBA. It provides that:
(a) It shall be unlawful for two or more persons to conspire to obstruct the
enforcement of the criminal laws of a State or political subdivision thereof, with
the intent to facilitate an illegal gambling business if--

(1) one or more of such persons does any act to effect the object of such a
conspiracy;

(2) one or more of such persons is an official or employee, elected,
appointed, or otherwise, of such State or political subdivision; and

(3) one or more of such persons conducts, finances, manages, supervises,
directs, or owns all or part of an illegal gambling business.

(b) As used in this section--

(1) illegal gambling business means a gambling business which--

(i) is a violation of the law of a State or political subdivision in
which it is conducted;

(ii) involves five or more persons who conduct, finance, manage,
supervise, direct, or own all or part of such business; and

(iii) has been or remains in substantially continuous operation for a
period in excess of thirty days or has a gross revenue of $2,000 in
any single day.

(2) gambling includes but is not limited to pool-selling, bookmaking,
maintaining slot machines, roulette wheels, or dice tables, and conducting
lotteries, policy, bolita or numbers games, or selling chances therein.

(3) State means any State of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, and any territory or possession of the
United States.

(c) This section shall not apply to any bingo game, lottery, or similar game of
chance conducted by an organization exempt from tax under paragraph (3) of
subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended,
80

if no part of the gross receipts derived from such activity inures to the benefit of
any private shareholder, member, or employee of such organization, except as
compensation for actual expenses incurred by him in the conduct of such activity.

18 U.S.C. 1511 (emphasis added).
In its report, the House of Representatives described this section as making it
unlawful to engage in a conspiracy to obstruct the enforcement of state law to facilitate
an illegal gambling business, defined as (1) violating state law; (2) involving five or
more persons who conduct, finance, manage, supervise, direct, or own all or part of such
a business, and (3) operating in excess of 30 days or having a gross revenue of $2,000 in
any single day. H.R. Rep. No. 91-1549, at 4010. It did not state that a violation of a
federal definition of gambling was an element of the offense.
The Senate Committee on the Judiciary, by contrast, intimated that gambling was
limited to the enumerated games. S. Rep. No. 91-617, at 155 (Section 1511(b)(1)-(3)
define an illegal gambling business to include poolselling, bookmaking, maintaining slot
machines, roulette wheels, or dice tables and conducting lotteries, policy, bolita, or
numbers activity which (i) is in violation of the law of a State or political subdivision
thereof, (ii) involves five or more persons who participate in betting activity; (iii) has
been or remains in operation for a period in excess of 30 days or has a gross revenue of
$2,000 in any single day. See proposed section 1955(b) below. State and gambling
are defined comprehensively.).
No case was found arguing that the definition of gambling provided by
1511(b)(2) limited the kinds of state gambling crimes prosecutable under the statute.
Courts have upheld convictions under 1511 for running an illegal poker game following
unrelated challenges. See generally United States v. Zemek, 634 F.2d 1159 (9th Cir.
81

1980) (holding that there was sufficient evidence to support defendants convictions
under 1511 and 1955 for running a gambling business involving black jack and pot
limit poker); but cf. generally United States v. Nettles, 570 F.2d 547 (5th Cir. 1978)
(vacating defendants conviction under 1511 and 1955 for running a gambling
business involving poker games because his trial was improperly joined with that of his
co-conspirators).
2. Pre-IGBA
a. Transporting Gambling Materials
Several federal statutesnone of which is contemporaneous with the IGBA
criminalizes the transportation of various gambling-related materials. None of these statutes
makes explicit mention of poker or other card games.
The earliest of these laws, dating back to the 1890s, prohibits the foreign importation and
interstate transportation of lottery tickets, 18 U.S.C. 1302, or the use of the mails for
distribution or sale of any lottery or similar scheme, 18 U.S.C. 1301. See Federal Regulation
of Gambling, 60 Yale L.J. 1396, 1401-02 (1951). Lotteries were defined as contests in which the
outcome was dependent in whole or in part upon lot or chance. 18 U.S.C. 1301-02.
As other forms of gambling rose to prominence, Congress moved to restrict those games.
In 1951, Congress forbade the transportation of slot machines and other gambling devices to
states where such devices are illegal, and to regulate the manufacture and repair of those devices.
An Act to prohibit transportation of gambling devices in interstate and foreign commerce, Pub.
L. No. 81-906, 64 Stat. 1134 2 (1951) (codified as amended at 15 U.S.C. 1171-78). The
statutes definition of gambling device focuses on devices permitting players to win prizes by
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operation of chance. 15 U.S.C. 1171 (The term gambling device means--(1) any so-called
slot machine or any other machine or mechanical device an essential part of which is a drum or
reel with insignia thereon, and (A) which when operated may deliver, as the result of the
application of an element of chance, any money or property, or (B) by the operation of which a
person may become entitled to receive, as the result of the application of an element of chance,
any money or property; or (2) any other machine or mechanical device (including, but not
limited to, roulette wheels and similar devices) designed and manufactured primarily for use in
connection with gambling, and (A) which when operated may deliver, as the result of the
application of an element of chance, any money or property, or (B) by the operation of which a
person may become entitled to receive, as the result of the application of an element of chance,
any money or property; or (3) any subassembly or essential part intended to be used in
connection with any such machine or mechanical device, but which is not attached to any such
machine or mechanical device as a constituent part. (emphasis added)). It specifically excludes
particular types of machines, including machines which do not depend on an element of chance.
15 U.S.C. 1178(2) (None of the provisions of this chapter shall be construed to apply . . . to
any machine or mechanical device, such as a coin-operated bowling alley, shuffleboard, marble
machine (a so-called pinball machine), or mechanical gun, which is not designed and
manufactured primarily for use in connection with gambling, and (A) which when operated does
not deliver, as a result of the application of an element of chance, any money or property, or (B)
by the operation of which a person may not become entitled to receive, as the result of the
application of an element of chance, any money or property, or . . . to any so-called claw, crane,
or digger machine and similar devices which are not operated by coin, are actuated by a crank,
and are designed and manufactured primarily for use at carnivals or county or State fairs.
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(emphasis added)). This definition of gambling devices might include video or Joker Poker
machines, see United States v. One Hundred Thirty-Seven (137) Draw Poker-Type Machines and
Six (6) Slot Machines, 765 F.2d 147 (6th Cir. 1985) (table), available at 1985 WL 13304, at *2,
but apparently not paraphernalia used in live poker games.
The Paraphernalia Act, 18 U.S.C. 1953, passed in 1961, Pub. L. No. 87-218, 1, 75
Stat. 492, more broadly forbids carrying or sending in interstate or foreign commerce any
record, paraphernalia, ticket, certificate, bills, slip, token, paper, writing, or other device used, or
to be used, or adapted, devised, or designed for use in (a) bookmaking; or (b) wagering pools
with respect to a sporting event; or (c) in a numbers, policy, bolita, or similar game, 1953(a),
unless such games were authorized by state law, see 1953(b) (This section shall not apply to
(1) parimutuel betting equipment, parimutuel tickets where legally acquired, or parimutuel
materials used or designed for use at racetracks or other sporting events in connection with
which betting is legal under applicable State law, or (2) the transportation of betting materials to
be used in the placing of bets or wagers on a sporting event into a State in which such betting is
legal under the statutes of that State, or (3) the carriage or transportation in interstate or foreign
commerce of any newspaper or similar publication, or (4) equipment, tickets, or materials used
or designed for use within a State in a lottery conducted by that State acting under authority of
State law, or (5) the transportation in foreign commerce to a destination in a foreign country of
equipment, tickets, or materials designed to be used within that foreign country in a lottery which
is authorized by the laws of that foreign country.). As amended in 1979, 1953, like 1301,
defines lottery as involving an element of chance. Pub. L. No. 96-90, 2(e), 93 Stat. 698 (1979)
(codified at 18 U.S.C. 1953(e)) (For the purposes of this section lottery means the pooling of
proceeds derived from the sale of tickets or chances and allotting those proceeds or parts thereof
84

by chance to one or more chance takers or ticket purchasers. Lottery does not include the
placing or accepting of bets or wagers on sporting events or contests. (emphasis added)).
The Paraphernalia Act has been interpreted as covering video poker machines. See
United States v. Wall, 92 F.3d 1444, 1458 & n.11 (6th Cir. 1996). No case was found in which
the Act was used to prosecute transportation of forms of paraphernalia used in live poker games,
such as cards or chips.
b. Gambling Ships
In 1949, Congress forbade the operation of gambling ships flying under the American
flag or otherwise within United States jurisdiction. The Gambling Ship Act, Pub. L. No. 81-72,
ch. 139, 23, 63 Stat. 92, 93 (1949) (codified as amended at 18 U.S.C. 1081-83). Like other
early gambling laws, for purposes of this section, Congress implicitly defined gambling, in part,
as playing a lottery or other game of chance. 18 U.S.C. 1081 ([G]ambling establishment
means any common gaming or gambling establishment operated for the purpose of gaming or
gambling, including accepting, recording, or registering bets, or carrying on a policy game or
any other lottery, or playing any game of chance, for money or other thing of value. (emphasis
added)). It does not proscribe poker.
c. Wire Act
The Wire Act, Pub. L. No. 87-216, 2, 75 Stat. 491 (1961) (codified as amended at 18
U.S.C. 1084) forbids use of a wire communication facility for the transmission in interstate or
foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on
any sporting event or contest, or for the transmission of a wire communication which entitles the
recipient to receive money or credit as a result of bets or wagers, or for information assisting in
85

the placing of bets or wagers. 18 U.S.C. 1084(a). The Act applies only to wagering on
sporting events. See generally U.S. Dept of Justice, Office of the Legal Counsel, Whether
Proposals By Illinois and New York to Use the Internet and Out-of-State Transaction Processors
to Sell Lottery Tickets to In-State Adults Violate the Wire Act, 35 Op. O.L.C. 1 (2011),
available at http://www.justice.gov/olc/2011/state-lotteries-opinion.pdf.
d. Travel Act
Passed in 1961, the Travel Act, Pub. L. No. 87-228, 75 Stat. 498, punishes individuals
who travel[] in interstate or foreign commerce or use[] the mail or any facility in interstate or
foreign commerce, with intent to--(1) distribute the proceeds of any unlawful activity; or
(2) commit any crime of violence to further any unlawful activity; or (3) otherwise promote,
manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying
on, of any unlawful activity, and thereafter performs or attempts to perform any of those acts.
18 U.S.C. 1952(a). The statute specifies that unlawful activity includes any business
enterprise involving gambling . . . in violation of the laws of the State in which they are
committed or of the United States. 18 U.S.C. 1952(b)(1) (emphasis added). It does not
mention poker or otherwise enumerate any specific games that constitute gambling.
While individuals have been prosecuted under the Travel Act for poker-related activities,
the alleged unlawful activity has been a violation of state, rather than federal, gambling laws.
See generally, e.g., United States v. Izzi, 385 F.2d 412 (7th Cir. 1967); South v. United States,
368 F.2d 202 (5th Cir. 1966).
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3. Post-IGBA
a. Indian Gambling Regulatory Act
Unlike many other federal statutes dealing with gambling, which criminalize particular
games or gaming-related activity, the Indian Gaming Regulatory Act (IGRA), Pub. L. No. 100-
497, 102 Stat. 2467 (1988) (codified at 25 U.S.C. 2701 et seq.), was designed to provide a
statutory basis for the operation of gaming by Indian tribes while also permitting the regulation
of gaming by an Indian tribe adequate to shield it from organized crime and other corrupting
influences. 25 U.S.C. 2702(1)(2). Towards that end, it classifies games into three categories
subject to varying levels of regulation.
Class I games are social games solely for prizes of minimal value or traditional forms of
Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies or
celebrations. 25 U.S.C. 2703(6). These games are subject to the exclusive jurisdiction of the
tribes. 25 U.S.C. 2710(a)(1).
House-banked card games are Class III games. 25 U.S.C. 2703(7)(B)(i) (defining Class
II games as excluding any banking card games, including baccarat, chemin de fer, or blackjack
(21)); id. 2703(8) (The term class III gaming means all forms of gaming that are not class I
gaming or class II gaming.). These games are subject to the strictest regulation. Such games
are prohibited unless (1) authorized by a tribal ordinance or resolution; (2) located in a state that
permits the particular gaming for any purpose by any person, organization or entity; and (3)
conducted in accordance with a compact negotiated between the Indian tribe and the state. 25
U.S.C. 2710(d)(1).
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Class II games include other card games, such as poker, that are either authorized or not
specifically prohibited by state law, as well as games such as bingo, lotto, pull-tabs, tip jars, and
punch boards. See 25 U.S.C. 2703(7)(A)(ii)(The term class II gaming means-- . . . card
games that . . . are explicitly authorized by the laws of the State, or . . . are not explicitly
prohibited by the laws of the State and are played at any location in the State[,] but only if such
card games are played in conformity with those laws and regulations (if any) of the State
regarding hours or periods of operation of such card games or limitations on wagers or pot sizes
in such card games.). Class II gaming is only permitted (1) if carried on in a state that allows
such gaming for any purpose by any person, organization, or entity; (2) if not prohibited by
federal law; and (3) if a tribal ordinance or resolution has been adopted permitting such
gaming. 25 U.S.C. 2710(b)(1)(A)-(B).
Federal law criminalizes gambling in Indian country that violates state law and is not in
compliance with the Indian Gambling Regulatory Act. 18 U.S.C. 1166(b) (Whoever in Indian
country is guilty of any act or omission involving gambling, whether or not conducted or
sanctioned by an Indian tribe, which, although not made punishable by any enactment of
Congress, would be punishable if committed or omitted within the jurisdiction of the State in
which the act or omission occurred, under the laws governing the licensing, regulation, or
prohibition of gambling in force at the time of such act or omission, shall be guilty of a like
offense and subject to a like punishment.). Such gambling activity is punishable if it violates
state licensing, regulatory, or prohibitory law even though it may not violate federal law. 18
U.S.C. 1166(a)-(b). It incorporates the various gaming classifications into its definition of
gambling:
(c) For the purpose of this section, the term gambling does not include--
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(1) class I gaming or class II gaming regulated by the Indian Gaming Regulatory
Act, or
(2) class III gaming conducted under a Tribal-State compact approved by the
Secretary of the Interior under section 11(d)(8) of the Indian Gaming Regulatory
Act that is in effect.

18 U.S.C. 1166. To the extent that it is authorized by state law, poker would not be
prosecutable as gambling under this statute. If forbidden by state law, as it is in New
York, or if conducted in violation of state law, and in the absence of a tribal-state
compact, it would constitute gambling and would be punishable under this statute. See
Dalton v., 780 N.Y.S.2d at 64 n.5 (describing stud poker as a class III game under
IGRA).
In United States v. Cook, the Court of Appeals for the Second Circuit noted the
similarities between the IGBA and 18 U.S.C. 1166.
[G]ambling activity that violates state licensing, regulatory, or prohibitory law is
punishable even though it may not violate federal law. 18 U.S.C. 1166(a).
Similarly, 18 U.S.C. 1955 prohibits gambling businesses that violate the law of
the state in which they are conducted. Id. 1955(b)(1)(i). . . . [B]oth provisions
punish gambling operations that violate state law.

922 F.2d at 1034 (emphasis added). The court explained that the scope of section 1955 exceeds
that of section 1166 because it was designed to target illegal gambling businesses, rather than
gambling activity itself. Id.
Despite the superficial similarities in the statutes, neither the Cook case nor 18 U.S.C.
1166 resolve the questions at issue in this case. In 18 U.S.C. 1166, the statute is explicit that a
violation of state law is sufficient to violate that federal statute. Under the IGBA, while it is
clear that a violation of state law is necessary, it is insufficient.
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b. National Gambling Impact Study Commission Act
In 1996, Congress passed the National Gambling Impact Study Commission Act
(NGISC). Pub. L. No. 104-169, 110 Stat. 1482 (1996) (codified at 18 U.S.C. 1955 notes).
Although the act did not amend the text of the IGBA itself, Congress directed that the NGISC be
incorporated into the notes following that statute in the United States Code. Id.
The purpose of NGISC was different than that of the IGBA. The NGISC was designed to
uncover the social and economic impacts of gambling in light of the fact that the legalization
of gambling ha[d] increased substantially over the [prior] 20 years, and particularly the growth
of various forms of gambling, including electronic gambling and gambling over the Internet. Id.
2(2)-(4). At the same time, illegal gambling businesses remained a concern. As the United
States House of Representatives pointed out in its report on the bill:
Illegal gambling operations also exist on a remarkable scale. At its hearing, the
Committee listened to testimony from a former mob bookmaker from Chicago
now turned government informant. This informant testified about the vast size of
illegal gambling operations. He also testified that illegal gambling operations
welcome new forms of legalized gambling because they teach more and more
people to gamble thereby increasing the number of illegal gamblers. Given that
testimony, illegal gambling must be treated, along with legalized gambling, as
part of one large interrelated issue.

H.R. Rep. No. 440, reprinted in 1996 U.S.C.C.A.N. 1192, 1194; see also 142 Cong. Rec.
H8035-02, H8037-38 (daily ed. July 22, 1996) (statement of Sen. Hyde) (The traditional
linkage between gambling and crime also concerns me. To give just one example, a [U.S.
Government Accountability Office] report issued in January concluded that the proliferation of
casinos, together with the rapid growth of the amounts wagered, may make these operations
highly vulnerable to money laundering. As gambling continues to spread, these negative effects
and others spread with it.); cf. id. H8040 (statement of Sen. Wolf) (One of the most startling
and unfortunate consequences of gambling has been the amount of public corruption attendant to
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it. Industry spokesmen claim that the days of Bugsy Segal and Joseph Bonano are behind it. The
industry, they claim, is composed of law abiding companies which report to stockholders instead
of organized criminal enterprises. The industry, more than any other, however, has been
connected to unprecedented levels of political corruption in recent years. The confluence of
money, politics, and power has wreaked havoc in many States and local jurisdictions.).
Congress concluded that a Federal commission should be established to conduct a
comprehensive study of the social and economic impacts of gambling in the United States.
NGISC 2(5).
Rather than incorporating the definition of gambling already provided by the IGBA, the
NGISC laid out its own, stating:
The term gambling means any legalized form of wagering or betting conducted
in a casino, on a riverboat, on an Indian reservation, or at any other location under
the jurisdiction of the United States. Such term includes any casino game,
parimutuel betting, sports-related betting, lottery, pull-tab game, slot machine, any
type of video gaming, computerized wagering or betting activities (including any
such activity conducted over the Internet), and philanthropic or charitable gaming
activities.

Id. 8(1). Despite its incorporation into the notes of 1955, this subsequent, expanded
definition of gambling does not enlarge a meaning in the earlier IGBA. Williams v. United
States, 327 U.S. 711, 718 (1946) (Where offenses have been specifically defined by Congress
and the public has been guided by such definitions for many years, it is not natural for Congress
by general legislation to amend such definitions or the punishments prescribed for such offenses,
without making clear its intent to do so.).
In its final report, the Commission acknowledged that [g]ambling is an ephemeral
subject, the study of it is frustrated by the apparently solid repeatedly slipping away. Kay C.
James et al., National Gambling Impact Study Commission Final Report 1-2 (1999). For the
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purpose of its gambling behavior questionnaires, it defined gambling as placing a bet on the
outcome of a race or game of skill or chance, or playing a gameincluding for charityin
which one might win or lose money. Id. at 7. The questionnaire sought information on a variety
of gaming types and locations. Id. at 9-10 (describing the survey as covering casino gaming,
pari-mutuel wagering, lottery, bingo, charitable gaming, cardrooms, private games, small
businesses, unlicensed games, and internet gambling). Several of these survey modules
casinos, cardrooms, private games, and internet gamblingarguably covered poker.
Conspicuously, the Commission neglected poker in its research and report. The game is
mentioned only in passing. Id. at 6 (California has a pari-mutuel racetrack facility that has a
cardroom where patrons may wager on poker.); id. at 22 ([In Natale, a police sergeant
mentioned,] we just have neighborhood poker games, which are technically illegal by the letter
of the law, after acknowledging that he has not seen an increase in illegal gambling in the
community.).
c. Unlawful Internet Gambling Enforcement Act of 2006
Most recently, Congress passed the Unlawful Internet Gambling Enforcement Act of
2006, Pub. L. No. 109-347, 801-03, 120 Stat 1884 (codified at 31 U.S.C. 53615367).
The statute prohibits gambling businesses from knowingly accepting payments in connection
with the participation of another person in a bet or wager that involves the use of the Internet and
that is unlawful under any federal or state law. 31 U.S.C. 5363. It states that unlawful
Internet gambling is plac[ing], receiv[ing], or otherwise knowingly transmit[ing] a bet or
wager by any means which involves the use, at least in part, of the Internet where such bet or
wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which
the bet or wager is initiated, received, or otherwise made. 31 U.S.C. 5362(10)(A). It defines
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bet or wager, in relevant part, as the staking or risking by any person of something of value
upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an
agreement or understanding that the person or another person will receive something of value in
the event of a certain outcome. 31 U.S.C. 5362(1)(A) (emphasis added).
VI. Proof Needed That Business Engaged in Gambling Under the IGBA
A. Limited Case Law Interpreting 18 U.S.C. 1955(b)(2)
Only one court appears to have directly addressed the question of whether the
government must prove that the alleged business activity constituted gambling under the IGBA
in addition to violating state law. In United States v. Atiyeh, the defendant was accused of
running an unlicensed sports-betting operation. 402 F.3d 354, 358-59 (3d Cir. 2005). A jury
convicted him of illegal gambling under 18 U.S.C. 1955. In its special verdict, the jury found
that the defendants conduct did not constitute bookmaking; rather, the business was an illegal
gambling business based upon becoming a custodian of funds that were wagered or to be
wagered. Third-Step Cross-Appeal Br. for George Atiyeh at 31, United States v. Atiyeh, 402
F.3d 354 (3d Cir. 2005), Nos. 03-1746, 03-1472, 03-1757, 2004 WL 3759626, at *31.
Following the verdict, the trial judge granted the defendants post-verdict motion for a
judgment of acquittal conviction on the ground that the defendants conduct had not violated
Pennsylvania state law. Id. at 369. The Court of Appeals for the Third Circuit reversed, holding
that the district courts interpretation of Pennsylvania law was erroneous. 402 F.3d at 369-70.
On appeal, the defendant argued, in the alternative, that a conviction under 18 U.S.C.
1955 could not lie because the conduct for which he was convictedbeing a custodian of funds
that were wagered or to be wageredwhile illegal under Pennsylvania law, was not gambling
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as defined in 18 U.S.C. 1955(b)(2). Id. at 372; see also Third-Step Cross-Appeal Br. for
George Atiyeh, United States v. Atiyeh, 402 F.3d 354 (3d Cir. 2005), Nos. 03-1746, 03-1472,
03-1757, 2004 WL 3759626, at *31 (All ten kinds of conduct listed as included within the
definition of gambling are ways of taking bets or conducting games of chance. None are
business activities ancillary to the actual taking of bets or paying of winning bettors. It is not
enough, to constitute a violation of 1955 that Mr. Atiyeh may have become a custodian of
funds that were wagered. (emphasis in original)). In its reply brief, the government stated,
without further explanation or analysis, that Section 1955(b) defines illegal gambling business
as (i) a violation of the law of a State or political subdivision in which it is conducted. Fourth-
Step Br. for the United States of America, United States v. Atiyeh, 402 F.3d 354 (3d Cir. 2005),
Nos. 03-1746, 03-1472, 03-1757, 2004 WL 3759627, at *14. Neither party briefed the
legislative history of the statute.
The Court of Appeals for the Third Circuit found that a violation of state law was itself
sufficient to trigger IGBA liability, explaining:
The relevant definition for our purposes is that of an illegal gambling business,
provided for in 18 U.S.C. 1955(b)(1), not the definition of gambling provided
for in 1955(b)(2). The jury found that [the defendant] violated 18 Pa. Cons. Stat.
5514(4), and therefore operated an illegal gambling business as defined by 18
U.S.C. 1955(b)(1). We have held that the mere custodianship of gambling-
related funds is sufficient to constitute a violation of 18 U.S.C. 1955, because
such custodianship is considered to be gambling under state law even though it
may not appear to fit within gambling as defined in 1955(b)(2).

402 F.3d at 372.
As developed in the instant decisions analysis, and as applied to poker, the Atiyeh
decision is not persuasive on the issue of whether a violation of a state anti-gambling law is
sufficient to permit a federal criminal conviction. That court did not have the benefit of the
extensive briefing on the text and history of the IGBA available to this court. Rather than
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grappling with the text of the statute itself, the Court of Appeals for the Third Circuit relied on
prior decisions which did not consider that issue of interpretation. It failed to resolve the
ambiguities in the text and history of the IGBA.
The overwhelming majority of cases have assumed, without analysis, that the
government need only prove that the business involved gambling as defined by state law, not that
the game operated constituted gambling as defined by the IGBA. See, e.g., Gotti, 459 F.3d at
340 (This statute provides that [w]hoever conducts, finances, manages, supervises, directs, or
owns all or part of an illegal gambling business shall be fined under this title or imprisoned not
more than five years, or both. 18 U.S.C. 1955(a) (emphasis added). An illegal gambling
business, in turn, is defined as one which (i) is a violation of the law of a State . . . in which it
is conducted; (ii) involves five or more persons who conduct, finance, manage, supervise, direct,
or own all or part of such business; and (iii) has been or remains in substantially continuous
operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single
day. 18 U.S.C. 1955(b)(1).); United States v. Truesdale, 152 F.3d 443, 446 (5th Cir. 1998)
(Under section 1955, an illegal gambling business is defined as a gambling business that: (1)
violates state or local law, (2) involves 5 or more people, and (3) is in continuous operation for
more than 30 days or has gross revenue of $2,000 in a single day.); United States v. Cyprian, 23
F.3d 1189, 1199 n.14 (7th Cir. 1994) (To establish a violation of 1955, the government must
show that the defendant conducted, financed, managed, supervised, directed, or owned a
gambling business that: (1) violated state law; [and] (2) involved five or more persons; and (3)
was either in substantial continuous operation for more than 30 days or had gross revenue of
$2,000 or more in a single day. (emphasis added)); United States v. Sacco, 491 F.2d 995, 998
(9th Cir. 1974) (en banc) (The statute requires that three elements be established to constitute an
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offense: there must be a gambling operation which (1) is a violation of the law of a State or
political subdivision in which it is conducted; (2) involves five or more persons who conduct,
finance, manage, supervise, direct or own all or part of such business; and (3) has been or
remains in substantially continuous operation for a period in excess of thirty days or has a gross
revenue of $2,000 in any single day.).
The statute has been used to prosecute games that are not enumerated in Section
1955(b)(2), see, e.g., United States v. Useni, 516 F.3d 634 (7th Cir. 2008) (bingo); United States
v. Reitano, 862 F.2d 982 (2d Cir. 1988) (rough-and-tumble blackjack); United States v. Tucker,
638 F.2d 1292 (5th Cir. 1981) (blackjack); United States v. Shursen, 649 F.2d 1250 (8th Cir.
1981) (blackjack), including poker, see Part VII(A), infra.
A minority of opinions have implied that the government must prove that the business ran
games that also constituted gambling as defined by the IGBA. See United States v. Hunter,
478 F.2d 1019, 1021 n.2 (7th Cir. 1973) (As defined in the statute, gambling includes but is
not limited to pool-selling, book-making, maintaining slot machines, roulette wheels or dice
tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein. In
this case appellants concede that their activities constituted gambling as so defined, and that
they were conducted in violation of the law of Indiana. (emphasis added)); United States v.
Kaczowski, 114 F. Supp. 2d 143, 152 (W.D.N.Y. 2000) (Section 1955 defines an illegal
gambling business as a gambling business which . . . is a violation of the law of State of political
subdivision in which it is conducted . . . . 18 U.S.C. 1955(b)(1). Further, gambling is
defined thereunder to include bookmaking. 18 U.S.C. 1955(b)(2).).
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B. Statutory Text and Legislative History are Ambiguous
1.Text
The import of 1955(b)(2) is unclear from the face of the statute. The IGBA
criminalizes illegal gambling businesses, not illegal gambling itself. 18 U.S.C. 1955(a). The
elements of an IGBA offense are commonly drawn from subsection (b)(1). See, e.g., Gotti, 459
F.3d at 340. In this subsection, an illegal gambling business is defined, in part, as a violation of
the law of a State or political subdivision in which it is conducted, 18 U.S.C. 1955(b)(1)(i),
without reference to the definition of gambling set forth in 1955(b)(2). Like the definition of
State, 18 U.S.C. 1955(b)(3), the definition of gambling is set forth in a separate subsection,
(b)(2), from the elements of the offense.
Unless Congress manifests an intent to incorporate diverse state laws into a federal
statute, the meaning of [a] federal statute should not be dependent on state law. United States v.
Turley, 352 U.S. 407, 411 (1957) (emphasis added); accord Dickerson v. New Banner Inst., Inc.,
460 U.S. 103, 119 (1983) (noting presumption that when Congress enacts a statute[,] . . . it does
not intend to make its application dependent on state law (internal citations and quotation marks
omitted)). Congress incorporated state law in 1955(b)(1). The question remains, however,
what it did in 1955(b)(2).
Subsection b(2) focuses on activities associated with running a gambling business rather
than with gambling itself. It states that gambling is poolselling and bookmaking, rather than
placing bets; maintaining slot machines, roulette wheels or dice tables, rather than playing
slots, roulette, or dice; and conducting lotteries, policy, bolita or numbers games, or selling
chances therein, rather than purchasing lottery tickets or chances. 18 U.S.C. 1955(b)(2)
(emphasis added). This focus bolsters the position that Congress was concerned with illustrating
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types of gambling businesses (presumably as defined by state law) rather than on creating a
limiting definition of gambling under federal law. Moreover, this list is non-exclusive; it
includes but is not limited to the enumerated games. See Connecticut Natl Bank v. Germain,
503 U.S. 249, 253-54 (1992) (We have stated time and again that courts must presume that a
legislature says in a statute what it means and means in a statute what it says there).
At the same time, if the statute was designed to federalize all state gambling offenses, it
need not have included any definition of gambling. Had Congress desired to make the statute
all-encompassing, it is hard to see why it would have needed the examples at all. Begay v.
United States, 553 U.S. 137, 142 (2008). In Begay, the Supreme Court confronted a similarly-
phrased statute, which defined violent felony for the purpose of sentencing as:
any crime punishable by imprisonment for a term exceeding one year, or any act
of juvenile delinquency involving the use or carrying of a firearm, knife, or
destructive device that would be punishable by imprisonment for such term if
committed by an adult, that

(i) has as an element the use, attempted use, or threatened use of physical force
against the person of another; or

(ii) is burglary, arson, or extortion, involves use of explosives, or otherwise
involves conduct that presents a serious potential risk of physical injury to
another.

18 U.S.C. 924(e)(2)(B)(ii). Like the list in the IGBA, the otherwise involves clause
plausibly implied that the list of crimes was non-exclusive. Justice Breyer, writing for the court,
held that not all crimes that posed a serious potential risk of physical injury, but only those
sufficiently similar to burglary, arson, or extortion or crimes involve[ing] use of explosives,
would violate 924(e)(2)(B)(ii). Begay, 553 U.S. at 142.
If Congress meant clause (ii) to include all risky crimes, why would it have
included clause (i)? A crime which has as an element the use, attempted use, or
threatened use of physical force against the person (as clause (i) specifies) is
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likely to create a serious potential risk of physical injury and would seem to fall
within the scope of clause (ii).
Of course, Congress might have included the examples solely for
quantitative purposes. Congress might have intended them to demonstrate no
more than the degree of risk sufficient to bring a crime within the statute's scope.
But were that the case, Congress would have likely chosen examples that better
illustrated the degree of risk it had in mind. . . .
These considerations taken together convince us that, to every clause
and word of this statute, we should read the examples as limiting the crimes that
clause (ii) covers to crimes that are roughly similar, in kind as well as in degree of
risk posed, to the examples themselves.

Id. (internal citations omitted). In the instant case, Congress could have explicitly defined
gambling under the IGBA to mean criminal gambling as defined by state law. It did not.
Based on the text of the IGBA, 1955(b)(2) could serve two distinct purposes. First, as
advocated by the defendant, it could limit what kinds of state gambling crimes would trigger
IGBA liability by providing an independent federal definition of gambling. Second, as
advocated by the government, it could simply indicate what categories of state laws are gambling
lawsi.e., laws that criminalize pool-selling, bookmaking, maintaining slot machines, roulette
wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling
chances therein or similar activities forbidden by state law, as opposed to laws criminalizing the
practice of medicine by unlicensed professionals. Under the governments interpretation, a
business that violates any state criminal prohibition on gambling, as gambling is defined by that
state, would be prosecutable under the IGBA. Further, it would ensure that a business that
violates other state criminal prohibitions unrelated to that states definition of gamblingsuch as
an unlawful medical corporationwould not be prosecutable.
Both readings are plausible. Neither would violate the cardinal principle of statutory
construction that a statute ought, upon the whole, to be so construed that, if it can be
prevented, no clause, sentence, or word shall be superfluous, void, or insignificant. Duncan v.
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Walker, 533 U.S. 167, 174 (2001) (citing Williams v. Taylor, 529 U.S. 362, 404 (2000) and
Market Co. v. Hoffman, 101 U.S. 112, 115 (1879)).
2. Legislative History
The legislative history does not settle the dispute. As is often the case [i]n any major
piece of legislation, the legislative history is extensive, and there is something for everybody.
Antonin Scalia, A Matter of Interpretation: Federal Courts and the Law 36 (Amy Gutmann, ed.
1997).
The purpose of the IGBA was to extend federal criminal jurisdiction over intrastate
gambling businesses of a significant size in order to attack organized crime. See Part
IV(A)(4)(a), supra. During the debates, the bills proponents were chiefly concerned about the
games enumerated in 1955(b)(2), since those were the games which were, at the time, most
frequently subject to Mafia control. See Part IV(A)(4)(c), supra. Yet members of Congress
were uninterested in prohibiting any particular kind of gambling, which it viewed as a matter
best left to the states. See Part IV(A)(4)(a), supra. Some members of Congress indicated that
the IGBA included a broad definition of gambling encompassing every violation of State law;
others implied that the definition was limited to the particular games enumerated in the statute.
See Part V(A)(4)(b), supra.
Neither the IGBA as first introduced in both houses, nor the final adopted version, makes
clear whether the statute federalizes all state gambling offenses. See, e.g., Illegal Gambling
Business Control Act of 1969, S. 2022, 91
st
Cong., 1
st
Sess. 201 (1969) ([T]he term illegal
gambling business means betting, lottery, or numbers activity . . . [and] involves five or more
persons who operate, work in, participate in, or derive revenue from said betting, lottery, or
numbers activity . . . .); 18 U.S.C. 1955(b)(2); see also House Judiciary Hrgs at 325 n.66
100

(Committee on Federal Legislation, The Association of the Bar of the City of New York, The
Proposed Organized Crime Control Act of 1969 (S. 30) (1970)) (The term gambling is said to
include certain specified activities . . . without indicating whether the list is supposed to be all-
inclusive.). The addition of a separate definition of gambling in a distinct section of the IGBA
in the final version of the statute suggests a design adopting a distinct federal definition of
gambling. No explanation for this change could be found in the legislative record.
3. Other Federal Statutes
Where other federal statutes are designed to incorporate all state law gaming offenses,
this intent is specified explicitly. See, e.g., 18 U.S.C. 1166; see also Part V(B), supra.
C. Rule of Lenity Weighs in Favor of the Defendant
The text, structure, and history of the IGBA fail to satisfactorily establish that the
government is correct in its interpretation of the statute. Because a reasonable doubt persists
about a statutes intended scope, the rule of lenity applies. Moskal, 498 U.S. at 108; see also
Part IV(B), supra. The defendants narrower, more persuasive construction is adopted.
Nothing in the prior decisions requires a contrary result. Most courts that have assumed
that a business that violates any state criminal gambling laws is subject to IGBA liability have
not squarely addressed the issue. See Part VI(A), supra. As noted above, the Court of Appeals
for the Third Circuits reasoning in Atiyeh is not binding in the Second Circuit. Id.
The government argues that the defendants interpretation would require an ad hoc
analysis of how similar or dissimilar the game was to those listed in IGBAs list of examples,
creating an extraordinarily complex and unpredictable approach to the statute. Govt
Response to Def.s Mot. to Dismiss the Indictment 7, Doc. Entry 76, July 5, 2012; see also id. 5
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(Under his theory, courts, whenever confronted with a game that is not in the illustrative list set
forth in 1955(b)(2), would be required to conduct an analysis in which certain features of the
unlisted game are compared with features of the various exemplars, even where the unlisted
game is indisputably a proscribed form of gambling under the referenced state law. This would
add a new factual element for the government to prove to obtain a conviction. It would also
result in widely divergent interpretations of the law as different courts would understandably
arrive at distinct conclusions as to what were the most significant features of the activities
listed in 1955(b)(2).); see generally Govt Mem. of L. in Opp. to Def.s Rule 29 Mot. 10-12,
Doc. Entry 96, July 27, 2012. This may be so. Nevertheless, given the ambiguities in the
statute, such case-by-case analysis in ambiguous cases is what the statute, interpreted in light of
the rule of lenity, demands.
VII. Poker is Not Gambling Under IGBA
Since games run by the defendants business must constitute gambling as defined by
the IGBA, it must be determined whether poker falls under that definition of gambling.
As noted above, the IGBA defines gambling as includ[ing] but . . . not limited to pool-
selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting
lotteries, policy, bolita or numbers games, or selling chances therein. 18 U.S.C. 1955(b)(2).
The list is non-exclusive. Although poker and other card games requiring skill were widely
played when the IGBA was passed, such games are not included in that provisions list of
gambling activities. See McBoyle, 283 U.S. at 26 (noting that [a]irplanes were well known in
1919 when this statute was passed, but it is admitted that they were not mentioned in the reports
or in the debates in Congress in holding that an airplane is not a vehicle).
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Yet, the fact that the statute does not explicitly mention poker, in itself, is not conclusive
evidence that that game should not be considered gambling under the IGBA. Cf., e.g., National
Organization for Women, Inc. v. Scheidler, 510 U.S. 249, 262 (1994) (The fact that [the
Racketeering Influenced Corrupt Organizations Act (RICO)] has been applied in situations not
expressly anticipated by Congress does not demonstrate ambiguity. It demonstrates breadth.);
Bridge v. Phoenix Bond & Indemnity Co., 553 U.S. 639, 550 (2008) (We have repeatedly
refused to adopt narrowing constructions of RICO in order to make it conform to a preconceived
notion of what Congress intended to proscribe.).
As one court has aptly put it, [n]ot every silence is pregnant. In some cases,
Congress intends silence to rule out a particular statutory application, while in
others Congress silence signifies merely an expectation that nothing more need
be said in order to effectuate the relevant legislative objective. In still other
instances, silence may reflect the fact that Congress has not considered an issue at
all. An inference drawn from congressional silence certainly cannot be credited
when it is contrary to all other textual and contextual evidence of congressional
intent.

Burns v. United States, 501 U.S. 129, 136 (1991) (quoting Illinois Dept of Public Aid v.
Schweiker, 707 F.2d 273, 277 (7th Cir. 1983)), abrogated on other grounds as recognized by,
Irizarry v. United States, 553 U.S. 708 (2008).
The defendant points out that Congress does not, one might say, hide elephants in
mouseholes. Bilski v. Kappos, 130 S.Ct. 3218, 3250 (2010) (internal citations and quotations
omitted). The question remains whether poker is an elephant or a mouse under the statute.
Poker is, for the purposes of this case, an elephantor perhaps an eight hundred pound
gorillathat Congress would have been unlikely to ignore. The fact that card games like poker,
pinochle, gin rummy, and bridge were so widely played by law-abiding individuals in non-
criminal settings may explain its omission from the IGBA. As Sherlock Holmes would describe
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the clue, it is the dog that didnt bark. See generally Sir Arthur Conan Doyle, Silver Blaze, in
The Memoirs of Sherlock Holmes 1-38 (Random House 2012) (1894).
As a matter of statutory construction, poker must fall under the general definition of
gambling and be sufficiently similar to those games listed in the statute to fall within its
prohibition. See Dauray, 215 F.3d at 262. It does not.
A. No Controlling Federal Cases
No court has ruled directly on whether poker constitutes gambling as defined by
1955(b)(2). Federal courts have upheld convictions under 18 U.S.C. 1955 where the alleged
gambling business involved illegal poker games following challenges unrelated to the issue of
statutory interpretation now precisely presented. See generally United States v. Pack, No. 92-
3872, 1994 WL 19945 (6th Cir. Jan. 25, 1994) (table); United States v. Reiger, 942 F.2d 230 (3d
Cir. 1991); United States v. Zannino, 895 F.2d 1 (1st Cir. 1990); United States v. Dadanian, 818
F.2d 1443 (9th Cir. 1987), abrogated on other grounds by United States v. Wallace, 848 F.2d
1464 (9th Cir. 1988); Zemek, 634 F.2d 1159; United States v. Tarter, 522 F.2d 520 (6th Cir.
1975) (affirming conviction of several defendants while reversing conviction of a defendant
dealer due to insufficient evidence); cf. United States v. 5185 S. Westwood Drive, 2012 WL
1113197 (W.D. Mo. 2012) (discussing forfeiture of property at which defendant operated two
tables of Texas Holdem poker); Dono, 2009 WL 2405886 (providing a statement of reasons for
sentence imposed on defendant for a 1955 violation for operating an illegal gambling business
of poker games in violation of New York Penal Laws 225.05 and 20, among other offenses);
Uvino, No. 2009 WL 2366562 (same); United States v. Dey, 07-CR-725, 2009 WL 1730956
(E.D.N.Y. June 18, 2009) (Weinstein, J.) (same); Digiacomo, 746 F. Supp. 1176 (discussing
release pending trial of defendants accused of running illegal poker games, among other
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offenses); but cf. United States v. Vandetti, 623 F.2d 1144 (6th Cir. 1980) (finding that there was
sufficient evidence to convict defendant for running an illegal gambling business at which
blackjack and seven-card stud poker were played, but remanding on other, unrelated grounds);
United States v. Bridges, 493 F.2d 918 (5th Cir. 1974) (reversing defendants conviction under
1955 for running a gambling business involving poker and craps shooting because the
government failed to show that five persons were involved in the business for a period in excess
of thirty days). Questions which merely lurk in the record, neither brought to the attention of
the court nor ruled upon, are not to be considered as having been so decided as to constitute
precedents. Webster v. Fall, 266 U.S. 507, 511 (1924). These prior cases are not determinative.
The Court of Appeals for the Second Circuit has not passed on the issue. While it has
upheld a conviction for running an illegal gambling business involving Joker Poker on the basis
that that variant was a game of chance, see Gotti, 459 F.3d at 342, Joker Poker involves
significantly less skill than the live Texas Holdem games operated by the defendant in the
instant case.
B. Only Games of Chance Are Gambling Under IGBA
Unlike other provisions of the Unites States Code dealing with gambling, the IGBA does
not provide explicit criteria for what constitutes gambling. Compare 31 U.S.C. 5362(1)(A)
(defining a bet or wager, an essential characteristic of gambling under the Unlawful Internet
Gambling Enforcement Act of 2006, as the staking or risking by any person of something of
value upon the outcome of a contest of others, a sporting event, or a game subject to chance,
upon an agreement or understanding that the person or another person will receive something of
value in the event of a certain outcome). In light of the ambiguities in the federal definition of
gambling, governing criteria must be derived by determining what common characteristics
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unifies the games listed in 1955(b)(2) into a cohesive group. See United States v. Turkette, 452
U.S. 576, 581 (1981) (The rule of ejusdem generis . . . comes into play only when there is some
uncertainty as to the meaning of a particular clause in a statute).
The defendant contends with some force that all of the enumerated games are house-
banked and that chance predominates over the skill of the players in determining the outcome.
Def.s Mem. of L. in Supp. of Mot. for a Judgment of Acquittal Under Rule 29 of the Federal
Rules of Criminal Procedure 10-11, Doc. Entry 92, July 19, 2012.
In all nine listed activities, the players wager on fortuitous event[s]. In pool-
selling and bookmaking, the fortuitous event is typically the outcome of a
sporting event, over which the bettors exercise no control. In slot machines,
roulette, and dice tables, the fortuitous event is the whirring of the slot machine
mechanism, the turn of the wheel, or the roll of the dice. In lotteries, policy,
bolita, and numbers, the fortuitous event is the draw of a random number. These
activities are also game[s] of chance because the bettors exercise little or no
control over the events that determine whether they win or lose.

Id. at 10.
The government argues with equal force that any game in which something of value is
wagered on a future event constitutes gambling. Govt Mem. of L. in Opp. to Def.s Rule 29
Mot. 19, Doc. Entry 96, July 27, 2012 (citing Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 225-
26 (2008) (declining to adopt a narrower interpretation of enumerated items where broader
interpretation comported equally well with statute at large)). Moreover, it contends that 1) other
enumerated games also involve skill, eliminating chance as the relevant criterion; and 2)
although not house-banked, poker is equally profitable for the house. Id. at 29-33.
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1. Statute is Ambiguous
a. Text
The text of the statute does not provide sufficient guidance to decide the meaning of
gambling. The carve out provision exempts games of chance operated by tax-exempt
organizations from IGBA enforcement. 18 U.S.C. 1955(e) (This section shall not apply to any
bingo game, lottery, or similar game of chance conducted by [a tax-exempt organization].). An
element of chance thus has some relevance to the federal definition of gambling. Moreover, it
would be notably odd if games of skill were encompassed in the federal definition, but only
games of chance were exempted from prosecution under 1955(e). Yet there is no definitive
indication whether the statute would apply to a game of skill, or whether chance is the relevant
criterion unifying the games enumerated by 1955(b)(2).
b. Dictionary and Common Law Definitions
Dictionary definitions of gambling vary; some, but not all, require that the wager be
placed on a game of chance or an uncertain outcome. See Part(V)(A)(2), supra. At common
law, gambling consisted of wagering something of value on the outcome of a game in which
chance predominated over skill. See Part V(A)(3), supra.
[W]hen Congress uses language with a settled meaning at common law, Congress
presumably knows and adopts the cluster of ideas that were attached to each
borrowed word in the body of learning from which it was taken and the meaning
its use will convey to the judicial mind unless otherwise instructed. In such case,
absence of contrary direction may be taken as satisfaction with widely accepted
definitions, not as a departure from them.

Beck v. Prupis, 529 U.S. 494, 501 (2000) (internal citations and quotations omitted).
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c. Legislative History
The legislative history is inconclusive. Nowhere did Congress seriously debate how to
define gambling, or discuss what kinds of games beyond those enumerated should fall within the
IGBAs purview. Nor is it clear that Congress anticipated that the statute would reach poker
businesses. Although two senators expressed concern that the IGBA would encompass poker
games, see Part V(A)(4)(c), [p]assing references and isolated phrases are not controlling when
analyzing a legislative history. Dept of State v. Washington Post Co., 456 U.S. 595, 600
(1982); see also Board of Educ. of Hendrick Hudson Cent. Sch. Dist. v. Rowley, 458 U.S. 176,
204 n. 26 (1982) ([I]solated statements in the legislative history . . . are too thin a reed on which
to base an interpretation of the Act which disregards both its language and the balance of its
legislative history.).
Sought by Congress in 1970 was an additional tool to combat organized crime by
permitting federal prosecution of illegal intrastate gambling rings that funded and facilitated the
activities of such groups. See Part V(A)(4)(a). To the extent that particular games were
discussed, these appeared to be the games that were perceived to be most subject to organized
crime influence at the time the IGBA was debated. Id. The relevant debates focused on numbers
and bookmaking.
Yet a statute is not to be confined to the particular application[s] . . . contemplated by
the legislators. Diamond v. Chakrabarty, 447 U.S. 303, 315 (1980) (internal citations and
quotations omitted). It is difficult to imagine that the statute was designed to preclude
prosecution of games such as poker if, in the future, they became subject to Mafia control. See
United States v. Gooch, 297 U.S. 124, 128 (1936) (holding that ejusdem generis may not be
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used to defeat the obvious purpose of legislation). And such games have subsequently become
a source of revenue for organized crime. See Part V(A)(6), supra.
Although the final report of the Commission on the Review of the National Policy
Towards Gambling does occasionally mention poker, supporting the inference that it was
considered gambling at the time the statute was enacted, the scant references to it indicates that
poker was not considered a significant target of gambling laws. See Part V(A)(5), supra.
d. Other Federal Statutes
Neither poker nor any other game of skill is explicitly included under the purview of
other federal laws criminalizing gambling. Federal gambling laws historically targeted games of
chance. 15 U.S.C. 1171 (defining a gambling device as one which involves the application of
an element of chance); 15 U.S.C. 1178(2) (excluding from the statute devices that do not
involve an element of chance); 18 U.S.C. 1081 ([G]ambling establishment means any
common gaming or gambling establishment operated for the purpose of gaming or gambling,
including accepting, recording, or registering bets, or carrying on a policy game or any other
lottery, or playing any game of chance, for money or other thing of value. (emphasis added)).
Even modern laws limit their scope to such games. 31 U.S.C. 5362(1)(A) (defining unlawful
internet gambling, in relevant part, as the placing of a bet or wageri.e., the staking or risking
by any person of something of value upon the outcome of a contest of others, a sporting event, or
a game subject to chance, upon an agreement or understanding that the person or another person
will receive something of value in the event of a certain outcome).
Several statutes focus on the same games of chance listed in the IGBA. See 18 U.S.C.
1953 (criminalizing knowingly carr[ying] or send[ing] in interstate or foreign commerce any
record, paraphernalia, ticket, certificate, bills, slip, token, paper, writing, or other device used, or
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to be used, or adapted, devised, or designed for use in (a) bookmaking; or (b) wagering pools
with respect to a sporting event; or (c) in a numbers, policy, bolita, or similar game shall be fined
under this title or imprisoned for not more than five years or both); 18 U.S.C. 1084
(prohibiting the transmission of bets or wagers on sporting events).
While the IGRA would regulate poker in Indian lands, see 25 U.S.C. 2703(7)(A)(ii)
(defining non-house-banked card games as class II games), that game can be subjected to less
stringent regulation than the games enumerated by the IGBA, see 25 U.S.C. 2703(8); Northern
Arapaho Tribe v. Wyoming, 389 F.3d 1308, 1310 (10th Cir. 2004) (stating that class III games
include roulette, blackjack, and parimutuel wagering), indicating that Congress may have seen
a qualitative difference between these types of games. The IGRA was designed to deal with the
sensitive question of regulating Indian gaming establishmentsnot the illegal gambling
establishments funding organized crime outside Indian Territory, as was the IGBA.
Poker would also fall under the definition of gambling guiding the NGIS Commissions
study of that activity. Yet, although the NGISC Act is incorporated into the notes of 1955, its
definition is different and substantially broader than that provided by the IGBA and other federal
gambling laws. Since the NGISC Act did not alter the text of the IGBA itself, it cannot be said
to have amended that statutes definition of gambling.
2. Gambling Not Limited to House-Banked Games
There is no evidence in the record that Congress considered whether a game was house-
banked was a relevant characteristic in determining whether it constituted gambling under the
IGBA. Neither dictionary nor common law definitions of gambling distinguish between games
based on that factor. Nor does any federal gambling statute other than the IGRA rely on whether
a game is house-banked to define its scope.
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3. Gambling is Limited to Games Predominated By Chance
The government contends that chance is not the relevant criterion limiting the IGBAs
definition of gambling because other forms of gambling involve skill. For example, betting on
the outcome of professional sports eventswhich would fall under either bookmaking or
pool-sellinginvolves an element of skill in picking the winning team or predicting the
outcome of the game. Dalton, 835 N.E.2d at 1193 n. 9; Office of the Atty Gen. of the State of
New York, Formal Op. No. 84-F1, N.Y. Op. Atty. Gen 11 (1984) (stating that sports betting
requires substantial (not slight) skill, including the exercise of [a] bettors judgment in
trying to . . . figure [out] the point spreads). Sports bettors have every opportunity to employ
superior knowledge of the games, teams and players involved in order to exploit odds that do not
reflect the true likelihoods of the possible outcomes. Govt Mem. of L. in Opp. to Def.s Rule
29 Mot. 30, Doc. Entry 96, July 27, 2012. Similarly, other card games commonly considered
gambling, such as blackjack, demand talents similar to those employed in poker, requiring
skilled players to take advantage of known odds. Id. at 29-30; see generally, e.g., Ben Mezrich,
Bringing Down the House: The Inside Story of Six MIT Students Who Took Vegas for Millions
(2003) (describing a group of students and ex-students from the Massachusetts Institute of
Technology who used card-counting techniques and other sophisticated strategies to beat casinos
at blackjack); Blackjack, This American Life (NPR radio broadcast June 8, 2012),
http://www.thisamericanlife.org/radio-archives/episode/466/blackjack (discussing card-counting
in blackjack).
Contrary to the governments argument, chance (as compared to skill) has traditionally
been thought to be a defining element of gambling and is included in dictionary, common law,
and other federal statutory definitions of it. See Part V(A)(2)-(3), (B), supra. The influence of
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skill on the outcome of poker games is far greater than that on the outcomes of the games
enumerated in the IGBAs illustrations of gambling. While a gambler with an encyclopedic
knowledge of sports may perform better than others when wagering on the outcome of sporting
events, unlike in poker, his skill does not influence game play. A sports bettor is better able to
pick a winning team, but cannot make them win. In poker, by contrast, increased proficiency
boosts a players chance of winning and affects the outcome 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. Players
can use these skills to win even if chance has not dealt them the better hand. And as the
defendants evidence demonstrates, these abilities permit the best poker players to prevail over
the less-skilled players over a series of hands. See Al Alvarez, The Biggest Game in Town 45
(1983) (In poker, as in golf, . . . [poker players] are betting on their own skills. The cards go
round, but in the end the best players win. When the poker players bet on sports, however, they
are putting down gigantic sums on events wholly beyond their control. . . . Players who make
tremendous amounts of money through their talents at the poker table go out and destroy it
betting on things they have no control over, [A.J.] Myers[, a regular and successful tournament
poker player,] said.)
Congress could have specified that gambling was limited to games of chance, or included
poker in the carve out provision of the IGBA. See Turkette, 452 U.S. at 581 (declining to hold
that RICO was limited to legitimate enterprises under ejusdem generis, as proposed by the
defendant, where Congress could easily have specified that element by including additional
wording in the statutes text). Yet it also could have specified that it encompassed all state laws
prohibiting gaming, as it did in 18 U.S.C. 1166, either explicitly or by failing to include a
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federal definition of gambling at all. It did neither. While the statutes purpose, controlling
organized crime, might argue in favor of a broad definition of gambling, dictionary, common
law, and other federal definitions of gambling argue in favor of a definition limited to games of
chance.
Whether the ambiguities in the statute are the result of inadequate drafting or of a
conscious choice, born of political compromise, to leave issues for the courts to resolve, they
must be construed in favor of the defendant. Under either the definition of gambling as proposed
by the defendant or that proposed by the plaintiff:
[A]ll provisions of the federal . . . statute are coherent; no provisions are
redundant; and the statute is not rendered utterly absurd. From the face of the
statute, there is no more reason to think that [one definition is more correct than
the other]. Under a long line of our decisions, the tie must go to the defendant.

Santos, 553 U.S. at 514 (plurality op.). In order to constitute an illegal gambling business under
the IGBA, as at common law, the business must operate a game that is predominately a game of
chance.
C. Poker is Predominated By Skill Rather than Chance
As pointed in Part IV(B), supra, the burden is on the government to show that its
interpretation of the IGBA is correct. Although many states, including New York, consider
poker to fall within the common law definition of gambling as a game of chance, see Part
II(B)(5), supra, this factor is not determinative in construing a federal statute. The government
must demonstrate that it is more probable than not that poker is predominated by chance rather
than skill. It has failed to do so.
The government acknowledges that skill plays a role in poker. Game play in poker is
influenced by both the cards dealt (determined by chance) and the decisions made by players
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(determined by skill). While players actions are influenced by chance events, their decisions are
based on skill. Players decisions, in turn, affect game play, both in the hand being played and in
subsequent hands. By bluffing, for example, players can overcome the power of chance and win
a hand despite holding inferior cards.
The majority of poker hands end when one player induces his opponents to fold. See
PPA Mot. for Leave to File an Amicus Br. Ex. A (Paco Hope & Sean McCulloch, Statistical
Analysis of Texas Holdem 14 (Mar. 4, 2009) (unpublished article)), Doc. Entry 74, July 3,
2012. Since the cards are never revealed or compared, the players decisions alone determine the
outcome. Id. The ability of players to influence game play distinguishes poker from the other
games, such as sports betting (bookmaking), enumerated in the IGBA.
That chance plays some role in the outcome of the game does not imply that poker is
predominately a game of chance rather than predominately a game of skill. Chess, a game in
which all possible moves are known in advance, can be characterized as a pure game of skill,
see, e.g., Govt Expert Daubert Hrg Tr. 40:7-12, 40:19-21. In poker, by contrast, players cannot
know what cards the luck of the draw will deal them. The same can be said of bridge, where
the luck of the draw is an element in overall wins and losses. Chance also influences many
sports, such as golf. See, e.g., PGA Tour, Inc. v. Martin, 532 U.S. 661, 687 (2001) ([G]olf is a
game in which it is impossible to guarantee that . . . an individuals ability will be the sole
determinant of the outcome. For example, changes in the weather may produce harder greens and
more head winds for the tournament leader than for his closest pursuers. A lucky bounce may
save a shot or two. . . . [C]hance may have a[n] . . . impact on the outcome of elite golf
tournaments.). Yet no one would dispute that bridge and golf are games of skill.
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The fundamental question is not whether some chance or skill is involved in poker, but
what element predominates. To predominate, skill must account for a greater percentage of the
outcome than chancei.e., more than fifty percent.
Two well-qualified and prepared experts have testified in this case. The defendants
expert, Dr. Heeb, has presented persuasive evidence proving that skill predominates over chance
in poker. His points are summarized as follows:
(1) [P]oker involves a large number of complex decisions, which allow players of
varying skill to differentiate themselves . . . ; (2) many people play poker for a
living and consistently win money over time . . .; (3) players who obtain superior
results with other starting hands tend to obtain superior results with any given
hand, indicating that the players abilities, not the cards, are responsible for the
results . . . ; (4) the published studies are all consistent with [these] conclusions.

Def. Letter Addressing Issues Raised at Aug. 10 Daubert Hearing 1, Doc. Entry 104, Aug. 13,
2012 (Def.s Post-Daubert Letter). Dr. Heeb demonstrated that skill could be shown
statistically to determine more than 50% of the outcome in poker in as few as 240 handsa
number of hands which would be played in a typical social game, or in a single session at
defendants shop. Def. Expert Supp. Report at 9-10. He concluded that poker is a game of skill
on every hand that is played, even if proving this statistically requires a sufficient number of
hands. See id. at 3.
The governments expert, Dr. DeRosa, has not submitted any contrary analysis, nor any
studies which support the conclusion that chance predominates over skill in poker. His questions
regarding Dr. Heebs data set were answered to the courts satisfaction at Dr. DeRosas Daubert
hearing, in which Dr. Heeb participated. Id. 71:15 74:8.
The crux of Dr. DeRosas remaining objections are four-fold.
First, Dr. DeRosa demonstratedas was conceded by Dr. Heeb, see Govt Expert
Daubert Hrg Tr. 84:1-8that what may appear to be persistent differentials in the outcomes of
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skilled and unskilled players, see Fig. 1, supra, can be duplicated by completely random,
unskilled play, like a coin toss, see Fig. 7, supra, and accompanying text. See Govt Reply
Letter at 3-4. Yet, as noted by Dr. Heeb:
Skill is observed to be persistent in several other analyses of the PokerStars data.
Skillful players are more successful than less skilled players with every possible
starting hand. Skillful players earn more profit than less skilled players with
every possible winning hand type. Finally, skillful players reliably outperform
less skillful players after a sufficiently long contest.

Def. Expert Supp. Report at 4. Dr. Heeb was also able to show that, unlike the unskilled coin
tossers relied upon by Dr. DeRosa, the most skilled poker players continue to perform well, and
the least skilled players continue to perform poorly, prospectively. See Part II(B)(3)(c), supra.
The same could not be said of players in a game of pure chance, indicating that the persistence of
success (or failure) in poker is the result of relative skill. Id. But see Govt Reply Letter at 4
(noting that, in Dr. Heebs experiment, one of the bottom ten players earned more money than
three of the top ten players, and the least successful top ten player lost more money than at least
four of the bottom ten players and arguing that this demonstrates that chance is material in the
game of poker).
Second, Dr. DeRosa implied that the relevant frame of reference for determining whether
poker is a game of skill or a game of chance is a single hand rather than the large number of
hands evaluated by the defendants expert. See Part II(B)(3)(b), supra; see also Govt Reply
Letter at 2-3 ([P]layers are not obligated to play more than one hand, and they are free to leave
after one hand. . . . Every game has a beginning and an end. In golf, one typically plays nine or
eighteen holes. In baseball, there are nine innings, and in sports such as basketball and soccer, a
game is complete after a specific period of time elapses. . . . A poker game does not consist of
thousands of hands of poker played over a persons lifetime.). Even in games of skill such as
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golf or bridge, however, chance may play a determinative role in the outcome of a single hole or
hand. An amateur may get a lucky shot, or benefit from the luck of the draw, and defeat an
expert player in a single or even a few instances. Nevertheless, across a series of gamesin
numbers that would be expected to be played in a local poker establishmentthe influence of
skill becomes obvious and overwhelming. See Part II(B)(3)(c), supra. Even if a single hand is
the relevant frame of reference, Dr. Heeb has shown that experts can outplay amateurs when
dealt the same starting hand. See Part II(B)(3)(a), supra.
Third, Dr. DeRosa claimed that it is likely that an average poker player would play only a
small number of hands, and the fewer the hands played, the more likely that chance rather than
skill would predominate. See Part II(B)(3)(b), supra. Yet Dr. Heebwho, unlike Dr. DeRosa,
has experience playing pokerconcluded that the the number of hands by which the higher
skilled players predominate with a high degree of certainty could be played in a few sessions of
poker. Def. Expert Report at 45; Def. Expert Supp. Report at 4 (stating that a serious poker
player, even an amateur, can easily play thousands of hands a month in live play); see Figs. 5, 6,
supra (showing that skill predominates when considerably less than 1,000 hands are played).
That number is easily reached by poker players in tournament play. See Govt Expert Daubert
Hrg Tr. 92:22 93:8.
No field research or testimony indicating that an average player plays fewer hands than
claimed by Dr. Heeb has been offered. And testimony at trial established to this courts
satisfaction by a preponderance of the evidence that players at the defendants establishment
were regular customers who played for many hours at a stretch and returned again and again,
buttressing Dr. Heebs opinions. E.g. Tr. of Trial 47:7-8 (Testimony of Joseph George
Monteleone), July 9, 2012 (Q: And about how many times did you gamble [at the defendants
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establishment]? A: From December of 2010 til February 2011 twice a week.); id. 59:12-21
(Q: When did you typically arrive when you played games at [the defendants establishment]?
A: Usually, give or take, 10:00 p.m. Q: How long did you typically play? A: Four to five hours.
Usually, I would leave around 2:00, between 2:00 and 3:00 a.m. Q: Was the game breaking up
when you left? A: No. Q: Do you know when it ended? A: Various nights, 6:00, 6:00 a.m.,
7:00 a.m.).
Finally, Dr. DeRosa correctly pointed out that all but the most skilled participants break
even or lose money at poker. See Fig. 4, supra. Since players play poker to win money, his
argument went, poker cannot be a game of skill. This argument is inapposite. The fact that
many players lose does not affect the quantity of skill demanded by a particular game. The
objective of chessor bridge, or golfis similarly to win. The fact that only one player or team
wins a game or tournament does not diminish the skill required to achieve that victory. See Def.
Post-Daubert Letter at 2 ([I]n many skill contests, most players lose (including losing money).
In chess tournaments, many skilled competitors pay entry fees, but only the top few receive
prizes, which means that the vast majority of chess players lose money by playing. . . . In
Olympic sports, all of the athletes are highly skilled, but only three competitors per event win a
prize. The fact that players lose thus does not prove that they are unskilled, and it does not shed
light on the key question, which is what causes some players to win and others to lose.); Def.
Expert Supp. Report at 1 (Consider golf, a game in which both skill and chance play a role, but
in which skill predominates. The majority of golfers (like the majority of poker players) are non-
professionals. These golfers nonetheless pay hundreds or thousands of dollars per year for
greens fees or club memberships to play golf. Only a fraction of a percent of golfers are
professional, and not all of those earn enough to cover all of their expenses. Only the top few
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players earn enormous profits. However, even among players who, on net, pay to play golf, a
relative examination of skill and performance would reveal that golf is a game of skill for all of
them.).
The average poker player is not so highly skilled as to take advantage of an advanced
players techniques and knowledge; yet skill, when sufficiently honed, makes the difference
between winning and losing in poker. See Fig. 2-3, supra, and accompanying text. As in bridge,
the champions who can consistently demonstrate that skill underlies success in the game are few.
Dr. Heeb has shown persuasively that skilled players will predominated over the less skilled in a
relatively short time. Were the rakethe amount of money removed from the pot by the
houseeliminated from the equation, less skill would be required to show a profit. See Fig. 8,
supra, and accompanying text.
Dr. DeRosa has provided no basis for the court to conclude that chance predominates
over skill in poker. The rule of lenity places the burden of proof on the government. It has failed
to show that it is more likely than not that chance predominates over skill in poker. Dr. Heebs
studies and conclusions are found to be accurate and persuasive by this court, which heard and
analyzed all the evidence. Even were the expert testimony to have left the court in a state of
equipoise, the rule of lenity requires that it find in favor of the defendant.
The conclusion that poker is predominately a game of skill does not undermine the
holding that poker is gambling as defined by New York law. While both New York State law
and the IGBA require that a game involves chance, each apply different standards in determining
whether a particular game is a game of chance or a game of skill. See N.Y. Penal Law
225.00(1) (defining a contest of chance as a game . . . in which the outcome depends in a
material degree upon an element of chance, notwithstanding that the skill of the contestants may
119

also be a factor therein (emphasis added)). The test under the federal statute is one of
preponderance, not material degree.
D. Poker is Not Gambling Under IGBA
Because the poker played on the defendants premises is not predominately a game of
chance, it is not gambling as defined by the IGBA. That the statute was targeted at limiting the
influence of organized crime, and organized crime groups have operated poker games beginning
in the years since its passage, does not retroactively change the statutes scope. The statute
should not be extended . . . simply because it may seem to us that a similar policy applies, or
upon the speculation that if the legislature had thought of it, very likely broader words would
have been used. McBoyle, 283 U.S. at 27.
As already noted, the IGBA is not the only tool available for the federal and state
governments to prosecute organized crime involvement in poker games. If the Mafia operates
such a game in an unlawful fashion (such as by also engaging in related loan sharking, extortion,
or money laundering), the organizers and operators can be prosecuted under RICO, 18 U.S.C.
1962. It is notable that no such evidence was present in this case. Illustrations in the
governments brief of federal poker prosecutions appear to be for racketeering under that statute.
See Govt Mem. of L. in Opp. to Def.s Rule 29 Mot. 23-25, Doc. Entry 96, July 27, 2012 (citing
Ex. A-G attached to the same memorandum).
Even without the organized crime connection, this defendants operations were
necessarily and properly found by the jury to violate New York state gambling laws. He could
have been prosecuted in state court by the Richmond County District Attorneys Office.
VIII. Conclusion
Neither the text of the IGBA nor its legislative history demonstrate that Congress
designed 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 rule oflenity compels a
narrow reading of the IGBA, and dismissal of defendant's conviction.
A reversal of this decision and reinstatement of the jury verdict by the Court of Appeals
for the Second Circuit would not violate the defendant's Double Jeopardy rights. See, e.g.,
United States v. Reyes, 302 F.3d 48,52 (2d CiT. 2002) ("[O]ur review of this appeal [by the
government of the trial court's decision to set aside jury verdict of guilty] does not violate Reyes'
constitutional protection against double jeopardy because in no event will he be subject to a
second trial."); United States v. Hundley, 858 F.2d 58, 66 n.7 (2d CiT. 1988) ("Double jeopardy
would bar the Government from appealing a judgment of acquittal entered before a verdict since
reversal of the acquittal would result in a retrial, ... but does not bar appeal of an acquittal
entered after a guilty verdict because reversal requires only reinstatement of the conviction .... "
(internal citations omitted)).
The indictment is dismissed. The jury verdict is set aside.
Dated: August 21, 2012
Brooklyn, New York
120
ORDERED.
h ! ( / ~ .
Jack B. Weinstein
Senior United States District Judge

U.S. vs. DiCristina Opinion (08/21/2012)

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