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• Nelson Rose Gambling And The Law Group
• Gambling And The Law I Nelson Rose

By the end of 1910 virtually all gambling is outlawed in the United States. The 18th Amendment, prohibition, is submitted by the Congress to the states. Prohibition becomes law in 1919 when. The latest Tweets from I. Nelson Rose (@INelsonRose). To be added to my mailing list, sign up at Follow my Twitter at GamblingAndTheLaw. End notes: 1 A wealth of information can be found on his Gambling and the Law website, which says that “Professor I. Nelson Rose is recognized as one of the world’s leading authorities on gambling law. He is an internationally known scholar, with more than 500 published works, and public speaker, often the keynote speaker on gambling issues.

I. Nelson Rose (born May 23, 1950) is an internationally known author and public speaker, and is recognized as one of the world's leading experts on gambling and gaming law.^[1][2][3][4] He is currently a Professor Emeritus at Whittier College and a Visiting Professor at the University of Macau. Rose is best known for his internationally syndicated column and 1986 book, Gambling and the Law.^[5]

Impact on legal gambling[edit]

In 1979, while still a student at Harvard Law School, Rose developed the theory of the Third Wave of Legal Gambling.^[6] Examining the dates when laws had been enacted in the past, he concluded that legal gambling had twice before swept the nation. He correctly predicted that state lotteries, casinos and other forms of gambling would once again be made legal in the United States. According to the theory, legal gambling will continue to spread, until it is once again outlawed.

The Third Wave of Legal Gambling theory inspired both entrepreneurs and governments to expand legal gaming, in part because it showed how much money could be made by the initial operators. 'Suppose Prohibition of alcohol had just been repealed. The hypothetical owner of the first and only liquor store in a state would make a fantastic return on investment.' ^[7]

The Third Wave of Legal Gambling theory explains why the states differ so much in their approaches to gaming. Rose showed the legal problems created by prohibitions in state constitutions dating from the 19th century on lotteries. For example, in 1990, the Mississippi Supreme Court discussed Rose's Third Wave of Legal Gambling theory in oral argument, concluding that that state's ancient constitutional ban on 'lotteries' did not prevent the Mississippi Legislature from legalizing charity bingo.^[8] The next year the Legislature authorized casinos, making Mississippi the third leading casino state, after Nevada and New Jersey.

Rose has also been involved in other major developments involving legal gambling in the U.S. and abroad. He has worked with governments and industry in legalizing and regulating casinos, poker, bingo and lotteries. He also was instrumental in the introduction of contests of skill and subscription and other games with free alternative means of entry. He wrote the legal opinion for PurePlay.com, the world's largest no-purchase-necessary poker site.^[9]

Rose's testimony led to the introduction of Texas hold 'em and Pai Gow Poker into California cardrooms in the 1980s;^[10][11][12] His work with tribes and suppliers on the Indian Gaming Regulatory Act and in testifying on what is legal on Indian land^[13][14][15] helped lead to the creation of the modern tribal bingo hall and casino.

In 1999, the California Supreme Court cited Gambling and the Law in striking down Proposition 5, which had won the most expensive initiative campaign battle in the nation's history, and which would have legalized tribal casinos as 'lotteries.'^[16] In 2006, the first NAFTA tribunal involving gaming adopted Rose's testimony, on behalf of the federal government of Mexico, on what constituted a slot machine as opposed to a game of skill.^[17] The North Dakota Supreme Court also adopted his position on what is a slot machine.^[18] The California Supreme Court adopted his testimony on what constituted a banking game, closing down the State lottery's Keno.^[19]

In 'Compulsive Gambling and the Law', Rose described how the views of society, and thus of the law, toward problem gambling are changing. In his writings and public presentations, he explained how courts and lawmakers were struggling with the concept that a person might bet too much because they were ill, rather than because they were morally weak.^[20] He incorporated the California Counsel on Problem Gambling, wrote the bill providing funding for the Texas Counsel on Problem Gambling. In 1990, he argued the case of Erickson v. Desert Palace, Inc., before the Ninth Circuit, on behalf of a 19-year-old boy who was denied a million-dollar slot machine jackpot by Caesars Palace, and asked the U.S. Supreme Court to hear the appeal.^[21] Rose was instrumental in getting governments and operators to put in place protections for compulsive and underage gamblers.^{[citation needed]}

Rose is the co-author of 'Internet Gaming Law' (1st^[22] and 2nd^[23] editions), Blackjack and the Law,^[24] and the first casebook on the subject, 'Gaming Law: Cases and Materials'.^[25] His most recent book, co-authored in 2012, is Gaming Law in a Nutshell.^[26] Rose is co-editor-in-chief of the Gaming Law Review & Economics.^[27] He is a consultant to governments and industry and has testified as an expert witness on gaming in administrative, civil and criminal cases.

Education and legal practice[edit]

Rose graduated from UCLA with a B.A. in 1973 and with a J.D. in 1979 from Harvard Law School. Immediately following graduation from Harvard, Rose moved to Hawaii to practice law. He passed the Hawaii and California bars and has also been admitted to practice in federal courts, including Ninth Circuit Court of Appeals and the United States Supreme Court.

While in Hawaii, Rose established the state's first eye bank, the Hawai'i Lions Eye Bank & Makana Foundation, in 1981. He helped get state law changed to allow donor stickers on drivers' licenses and permit trained nurses to harvest tissue. Rose served as legal counsel to the eye bank from 1981-1983.

Teaching[edit]

Rose joined what was then named Whittier College School of Law in 1973 as a Visiting Assistant Professor. Over the years, he was promoted to Full Professor with tenure. In Fall 1983, Rose developed and taught the first law school class on Gaming Law.^[28][29] Today there are at least 31 law schools with courses in Gaming Law, as well as graduate business schools and undergraduate colleges, many using the casebook Rose co-authored.

In 1993-1994, Rose became the first Visiting Scholar for the University of Nevada-Reno's Institute for the Study of Gambling and Commercial Gaming. His Gaming Law classes were open to undergraduates, graduate students, and practicing lawyers and regulators. At that time, Nevada had no law school, so Rose was the only person teaching Gaming Law in the nation's leading state for legal gaming.

In 2004, Rose taught a seminar on International Gaming Law for Whittier Law School's Summer Abroad program in China. He taught the same class the following years in Spain and France. He also taught classes on gaming law to the FBI; at colleges in Slovenia; and, at UNR's professional training courses in Reno, Tahoe and Macau.

Rose began co-teaching, with Professor Jorge Godinho, a graduate level class in Gaming Law at the Masters and Postgraduate Programs in International Business Law at the University of Macau in 2007. Most of the students have law degrees from China, Macau or countries in the Portuguese-speaking world, such as Angola and East Timor. Rose has taught the course every summer, in May or June, since 2007. He has also participated as the lead judge for students defending their Masters' theses on issues related to legal gambling.

Consultant and expert witness[edit]

Rose has testified as an expert witness in administrative, civil and criminal cases throughout the United States, in Australia and New Zealand, including the first NAFTA tribunal on gaming issues. He has acted as a consultant to major law firms, international corporations, licensed casinos, Indian tribes, and local, state and national governments, including the states of Arizona, California, Delaware, Florida, Illinois, Michigan, New Jersey, Texas; the District of Columbia; the provinces of Ontario and Québec; and the federal governments of Canada, Mexico and the United States.

Rose's clients include regulators, such as the Arizona Department of Gaming, the Delaware State Lottery (regulates sports books and racinos), the Illinois Gaming Board, the Texas Comptroller (regulated bingo) and the New Jersey Division of Gaming Enforcement. He has also worked with the largest operators, including Nevada and Atlantic City casinos, California cardrooms, state and national lotteries, race tracks, Indian tribes and online gambling operators.

Rose has testified as an expert on legal gambling before the California Legislature, Hawaii House of Representative's Finance Committee, New Mexico Legislature and Oregon Governor's Task Force on Gaming. He has worked with the Florida State Senate on Indian gaming, the Florida Department of Business & Professional Regulation's Division of Pari-Mutuel Wagering on poker rooms, and the Washington State Gambling Commission on casinos.

Rose has testified as an expert in cases involving casino gaming; lotteries, including keno and the New York and California State Lotteries; bingo, including mechanical devices in Texas and California; Indian gaming; skill versus chance; the meaning of gambling terms and the legality of proposed games. He has been cited in numerous published court decisions, including quoted by the Supreme Courts of North Dakota and California.^[30][31]

Public speaking[edit]

With the rising interest in gambling throughout the world, Rose has addressed such diverse groups as the National Conference of State Legislatures, Congress of State Lotteries of Europe and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, Canada, England, Australia, Antigua, Portugal, Italy, Argentina, Norway, and the Czech Republic.

Publications[edit]

Rose began writing his internationally syndicated column, 'Gambling and the Law', in 1983 for Gambling Times magazine. He later self-syndicated the column to other publications, both on and off the Internet, directed at laymen and professionals interested in the legal gambling industries. In 1991, he was granted the federal trademark on 'Gambling and the Law'^[32] 'For: syndicated and featured articles appearing in a variety of magazines and newspapers; and books, on the topic of gambling.'

Gambling and the Law columns appear in approximately 100 magazines, newspapers and journals, including Inside Asian Gaming, Casino Enterprise Management, Poker Player, Harvard Medical School's The Brief Addiction Science Information Source (BASIS), iGaming Business, Casino City Times, Bingo Bugles, CasinoCompendium.com, The GameMaster Online, American Casino Guide and Gaming Law Review & Economics.

Rose also writes for scholarly journals and books, usually using his trademark Gambling and the Law®. Recent articles include: 'Game on for Internet Gambling,' with Rebecca Bolin in the Connecticut Law Review; 'The DOJ Gives States a Gift,' in the UNLV Gaming Law Journal; 'The Third Wave of Legal Gambling,' in the Villanova Sports & Entertainment Law Journal'; 'Leading Law Cases on Gambling,' in William N. Thompson, 'The International Encyclopedia of Gambling' (ABC-Clio 2010); 'Internet Gambling and the Law,' in the Richmond Journal of Global Law and Business; 'The International Law of Remote Wagering,' in the John Marshall Law Review; and 'The Explosive But Sporadic Growth of Gambling in Asia,' in the Harvard Asia Pacific Review.

Some of his writings include: 'Of Course It's a Depression', 'Casinos on Cruse Ships, Why Not on Airplanes?', 'The New UIGEA Regulations: Opportunities for Operators', 'Betting on Beanie Babies', 'The Rise and Fall of the Third Wave: Gambling Will Be Outlawed in Forty Years',^[33][34] 'Compulsive Gambling and the Law', and 'Prohibition 2.0: The Unlawful Internet Gambling Act of 2006 Analyzed'. His columns and articles are often discussed in the news media, even in non-English language outlets. For example, 'Cuba Will Have Casinos, Again', caused a stir in Latin America.^[35]

References[edit]

1. ^'I. Nelson Rose, the country's leading authority on gambling law...' Natasha Dow Schüll, Addiction by Design: Machine Gambling in Las Vegas at p.94 (Princeton University Press: 2012).
2. ^Pokernewsdaily.com: Gambling Law Expert Nelson Rose Comments on Online Poker Seizure
3. ^Live Casino Direct: Come on Down, Nelson Rose
4. ^New York Times: Who Pays Up If Online Gambling Is Illegal? (Aug. 21, 1998)
5. ^ISBN0-89746-066-9
6. ^'The Legalization and Control of Casino Gambling,' Fordham Urban Law Journal, vol.8, p.245 (Winter, 1980)
7. ^Gamblingandthelaw.com: The Third Wave of Legal Gambling
8. ^Knight v. State of Mississippi, 574 So.2d 662 (1990).
9. ^San Francisco's Pure Play gambles on legality of online poker site.
10. ^Huntington Park Club Corp. v. County of Los Angeles, 206 Cal.App.3d 241, 253 Cal.Rptr. 408 (1988)
11. ^Walker v. Meehan, 194 Cal.App.3d 1290, 240 Cal.Rptr. 171 (Cal.Ct.App. 1987)
12. ^Sullivan v. Fox, 189 Cal.App.3d 673, 235 Cal.Rptr. 5 (Cal.Ct.App. 1987).
13. ^United States v.162 MegaMania Gambling Devices, 231 F.3d 713 (10th Cir. 2000)
14. ^United States v.103 Electronic Gambling Devices, 223 F.3d 1091 (9th Cir. 2000)
15. ^Diamond Game Enterprises, Inc. v. Janet Reno, 230 F.3d 365 (U.S. Court of Appeals, District of Columbia Circuit 2000).
16. ^Hotel Employees and Restaurant Employees Int'l. Union v. Davis, 21 Cal.4th 585, 981 P.2d 990, 88 Cal.Rptr.2d 56 (1999).
17. ^International Thunderbird Gaming Corporation v. The United Mexican States
18. ^Midwestern Enterprises, Inc. v. Wayne K. Stenehjem, North Dakota Attorney General, 2001 ND 67, 625 N.W.2d 234 (2001).
19. ^Western Telcon, Inc. v. California State Lottery, 13 Cal.4th 375, 53 Cal.Rptr.2d 812, 917 P.2d. 651 (June 24, 1996).
20. ^'Compulsive Gambling and the Law: From Sin to Vice to Disease,' presented before the American Society of Criminology, November 8–9, 1989, Reno, Nevada.
21. ^942 F.2d 694 (9th Cir. 1991), cert. denied, 112 S.Ct. 1476 (1992). ISBN0-913113-36-0.
22. ^ISBN0-913113-36-0.
23. ^ISBN978-1-934854-00-6.
24. ^ISBN0-910575-08-8.
25. ^ISBN0-8205-4906-1.
26. ^ISBN978-0-314-27836-4.
27. ^Gaming Law Review
28. ^Robert M. Jarvis, 'A Survey of Law School Gaming Courses,' Gaming Law Review, vol. 11, Issue 3 (2007)
29. ^Liebertonline.com: A Survey of Law School Gaming Courses
30. ^Hotel Employees and Restaurant Employees Int'l. Union v. Davis, 21 Cal.4th 585, 981 P.2d 990, 88 Cal.Rptr.2d 56 (1999), the California Supreme Court quoted his book, GAMBLING AND THE LAW, at length
31. ^The North Dakota Supreme Court adopted his position on what is a slot machine in Midwestern Enterprises, Inc. v. Wayne K. Stenehjem, North Dakota Attorney General, 2001 ND 67, 625 N.W.2d 234 (2001).
32. ^Serial Number 76515895, most recent registration date: July 27, 2004.
33. ^In Eadington (ed.), GAMBLING AND PUBLIC POLICY: INTERNATIONAL PERSPECTIVES (Institute for the Study of Gambling and Commercial Gaming, University of Nevada: 1991)
34. ^reprinted in Hashimoto, Kline and Fenich, CASINO MANAGEMENT FOR THE 90'S, (Kendall/Hunt Publishing Co., Dubuque, Iowa: 1996).
35. ^Cronica.com.mx: Casinos, ¿quién primero: Cuba o México..? (Miércoles 13 de Enero, 2010)

External links[edit]

[NOTE: This article was written before a change in California law that now permits the so-called ‘no flop, no drop’ rule. See material in [RED] in text of article below. Therefore, the conclusion that playing online is technically illegal in California is no longer correct.]

Professor I. Nelson Rose [1] wrote a short article entitled “Is It A Crime to Play Online?” His article is intended to look at this question only from the standpoint of the player, not from the standpoint of the operator of an online gambling website [2]. He says: “All states make it a crime to conduct some forms of unauthorized gambling. But about half the states also make it a crime to make a bet under some circumstances, even though nobody is ever charged any more.” (Emphasis supplied.)

The author says: “California, for example, makes it a crime to play 11 named games, including ’21’ and any ‘banking or percentage game.’ The California Penal Code also makes it a misdemeanor to make sports bets. But other wagers are not forbidden. It is not a crime to buy a lottery ticket, even in an illegal numbers games.” Thus, his view is “So, at least in California, it seems it is not a crime to play poker online for money.” (Emphasis supplied.)

I think the better, more legally supportable, conclusion is: playing poker for money in California at the popular online poker websites is illegal, but in today’s tolerant atmosphere the risk of being charged with a criminal misdemeanor is far less than the chance of getting a speeding ticket, and the actual penalty to befall anyone who is charged will be not much more serious than the speeding ticket. Here is my analysis and reasoning to support that conclusion.

California Penal Code Sec. 330. provides: “Every person whoplays… any banking or percentage game played with cards… for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor…” (Emphasis supplied.)

The conclusion Professor Rose reaches is correct for the situation where the player bets in an online poker game that is NOT also a percentage game. This is because playing poker for money in California is legal so long as the particular game being played does not run afoul of the other provisions of the law. Social home games are an example. As long as no one makes money, other than as a mere player, it is OK to play in a real money home poker game. In addition, playing in duly licensed California cardrooms does not run afoul of the prohibition because those cardrooms charge players in a manner that is not considered to be a percentage rake.

However, the conclusion is incorrect where the player bets in an online poker game if that game is a “percentage game.” All of the major online websites that offer real-money betting on poker games charge a fee of some kind for the opportunity to play. Usually the fee takes the form of the website operator being entitled to a rake that is a percentage of the money in a given pot, limited to a maximum amount. In tournament play there is an entry fee that may be viewed as a percentage of the buy-in amount each player pays, the sum of which buy-ins make up the prize pool to be split among the winners, since the amount increases as the buy-in amount increases. I am not aware of any online real-money poker games that do not have a rake or entry fee for most real-money poker games and tournaments.

I believe the existence of the rake or entry fee makes the poker game a percentage game, all of which are banned as a class by Section 330. In Sullivan v. Fox, 189 Cal.App.3d 673, 235 Cal.Rptr. 5 (Cal.App. 1 Dist., 1987) the interpretation of what constitutes a percentage game under California law was first stated. Three different methods of calculating the amounts to be paid to the house by players were considered: (1) a portion of each participants winnings, (2) a fixed portion of the amount of each bet, or (3) the time that each participant plays. The court held that if either of the first two methods is used, then the game will be a percentage game. Only the third method was determined to be a permissible form the house could use and still avoid having the game be declared a percentage game. I believe the rake in real-money online poker games and tournaments falls into either or both of the first two categories mentioned in Sullivan.

In response to several court decisions in California in 1998 and 1999, California Penal Code Section 337j was adopted. It provides:

“No fee may be calculated as a fraction or percentage of wagers made or winnings earned. Fees charged for all wagers shall be determined prior to the start of play of any hand or round. The actual collection of the fee may occur before or after the start of play. Ample notice shall be provided to the patrons of gambling establishments relating to the assessment of fees. Flat fees on each wager may be assessed at different collection rates, but no more than three collection rates may be established per table.”

The first version of this law was passed in 1998. In 2001 the statute was amended to its present text, which allows fees to be collected “before or after the start of play.” The statute has always required that fees for wagers must “be determined prior to the start of play.” Collection fees cannot be based on a percentage or fraction of the pot. So a fee calculated as $1 on the first $20 in the pot, another $1 on the next $10 in the pot and a third $1 if the pot is more than $30 would not appear to be allowed for two reasons: first, it would constitute a percentage of the pot and second the amount of the actual collection fee to be charged would not have been determined prior to the start of play. An informal telephone discussion with a member of the California Department of Justice Gaming Division on December 15, 2004, confirmed that view as well as the fact that the Division has not issued regulations interpreting how to calculate collection fees.

[Note: Sec. 337j has been amended to change the conclusions originally reached in this article. The following language has been added to the law: “However, the gambling establishment may waive collection of the fee or portion of the fee in any hand or round of play after the hand or round has begun pursuant to the published rules of the game and the notice provided to the public.” Thus, the ‘no flop, no drop’ rules discussed below is now permitted in California cardrooms.]

The initial problem with the online cardrooms is that they follow the Las Vegas Style “no flop, no drop” rule. That is, if everyone folds to the big blind (or the dealer button in stud) then no rake is taken in Las Vegas, or in the online cardrooms. This alone would violate the quoted statute, which requires that if a flat fee is involved, the amount must be known in advance, the charge being taken either before or after the hand is completed. Under the Las Vegas style of rake, which the online cardrooms follow, after the flop the rake is calculated as 10% of the pot, up a maximum stated amount, usually $3 or $4 per hand. This, too, violates the statute and technically makes the playing of online poker illegal under Penal Code Section 330 for those who are in California when they play.

Under the statute it is conceivable that different amounts of flat fees could be charged on different wagering rounds, but not on different amounts in the pot. In poker, as it is played in the bricks and mortar casinos in California, I am not aware of any that rake pots other than on the basis of $x per hand, regardless of the amount in the pot.

The cited provision of Section 337j was adopted in response to several California court decisions in 1998 and 1999 that construed what was meant by a percentage game. The provision of the statute that was adopted approved a fee collection scheme that the court in Sutter’s Place, Inc. v. Kennedy, 84 Cal.Rptr.2d 84, 71 Cal.App.4th 674 (Cal. App. 2 Dist., 1999) described as follows:

“There are two types of tables in the ‘California Games’ area. One type of table is what we will call the ‘low minimum’ table. At a ‘low minimum’ table, the minimum bet that can be placed in each square on the table is $10 and the maximum bet per square is $100. The other type of table is what we will call the ‘high minimum’ table. The ‘high minimum’ tables are located in what plaintiff calls the ‘Gold Room.’ The ‘high minimum’ tables have a $101 minimum bet and a $200 maximum bet per betting square.

“Plaintiff’s card room collects revenue by charging the participants in ‘California Games’ a ‘collection fee’ for utilization of each betting square. At the ‘low minimum” tables,’ the collection fee is $1 per betting square, while at the ‘high minimum’ tables the collection fee is $2 per betting square. The player-banker pays a collection fee of $2 or $3 at a ‘low minimum’ table and a collection fee of $5 at a ‘high minimum’ table.

Note that the collection, or rake, does not go up based on the amount bet, but on the fact that a bet of some amount is being made. Any variation in charges during the play of a hand must be made on the basis of the fact of a wager being made, not the amount of the wager. So, an escalation in the rake based on how much is in the pot would appear to be prohibited. Thus, if you are in California and are playing and betting money on poker games at one of the popular online websites, you are likely violating the law.

Professor Rose also said: “…about half the states also make it a crime to make a bet under some circumstances, even though nobody is ever charged any more.” If that observation is accurate, and given my analysis above, I think the proper question should focus on the legal consequences and risk to the player of getting involved in “illegal” online betting. The principal inquiry being the likelihood of any law enforcement authority doing anything about the player’s engaging in that activity.

Professor Rose says that “nobody is ever charged anymore.” Criminal charges against mere players are few and far between, especially because most such charges would be very low-level misdemeanors, sometimes only resulting in fines. However, since Professor Rose wrote the article there have been a few state criminal charges brought involving online betting under state laws making the bet a misdemeanor. The charges are only misdemeanors, but those charges can have adverse effects that go beyond the mere criminal charges.

In Florida a college quarterback, Adrian McPherson was tried on a misdemeanor charge brought against him for making sports bets through an offshore online bookie. The jury hung on the question of his guilt and he subsequently entered into a guilty plea agreement with the prosecutor on that and other pending matters. In North Dakota Jeffrey Trauman pleaded guilty to a misdemeanor charging him with making illegal online sports bets. Professor Rose has subsequently written a column about the Truaman matter appearing in Card Player Magazine (Vol 16, Mo. 21, Oct. 10, 2003.)

Thus, in my view, the better, more legally supportable, conclusion is: playing poker for money in California at the popular online poker websites is illegal, but in today’s tolerant atmosphere the risk of being charged with a criminal misdemeanor is far less than the chance of getting a speeding ticket, and the actual penalty to befall anyone who is charged will be not much more serious than the speeding ticket. Professor Rose concludes his Card Player article saying: “Does this mean regular players are in danger of being arrested? Half the states do have ancient laws on the book making it illegal to make a bet. But, probably 20 million Americans make technically forbidden wagers each year. With odds like that, you are more likely to be elected governor of California than charged with illegal gambling.”

End notes:

[1] A wealth of information can be found on his Gambling and the Law website, which says that “Professor I. Nelson Rose is recognized as one of the world’s leading authorities on gambling law. He is an internationally known scholar, with more than 500 published works, and public speaker, often the keynote speaker on gambling issues. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.”

Gambling Laws By State

[2] The question of the legality of offering a real-money poker game over the Internet to players in California is a still undecided question under California law. Trying to figure out how a court may rule is a different and quite complicated matter. It involves determining where the game is being offered and played as well as the ability to assert legal jurisdiction over the owner-operator of the website offering the game.

Nelson Rose Gambling And The Law Group

Under Section 337j of the California Penal Code it is a misdemeanor to “deal, operate, carry on, conduct, maintain, or expose for play in [California] any controlled game” unless all required federal, state and local licenses have been obtained. Many local jurisdictions in California require licenses to be obtained in order to operate a cardroom in that jurisdiction. No online real-money poker website has a license from any California gaming authority.

A “‘controlled game’ means any game of chance, including any gambling device, played for currency, check, credit, or any other thing of value that is not prohibited and made unlawful by statute or local ordinance…. [But] does not include any of the following: (A) The game of bingo conducted pursuant to Section 326.5. (B) Parimutuel racing on horse races regulated by the California Horse Racing Board. (C) Any lottery game conducted by the California State Lottery. [or] (D) Games played with cards in private homes or residences, in which no person makes money for operating the game, except as a player.”

Gambling And The Law I Nelson Rose

Poker games that are not “percentage games,” and assuming further that they are “games of chance,” are lawful under Section 330, so the offering of such games is subject to the requirement of Section 337j. Of course, if the online poker game is a percentage game, then the offering of it would be unlawful directly under Section 330.