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    Is it time to ditch the “poker is a skill game” argument?

    Posted by Marco Valerio August 16, 2013

    Despite notable political progress in the last few years, online poker is still a misunderstood issue at best and a divisive and controversial one at worst. As with any cause that is constantly battling for wider acceptance and legitimization, online poker in America continues to rely in great part on the rhetorical ammunition supplied by its support base.

    For as long as I can remember – right up until 2011 – the main talking point that the pro-poker movement rested most of its case on was that “poker is a game of skill.” This used to be a particular favorite of the Poker Players Alliance, back when the likes of Howard Lederer and Chris Ferguson were still visible envoys of the organization which has historically been backed and funded by Full Tilt Poker and PokerStars.

    With donors like that, it’s hardly surprising that “skill game” became the online poker lobby’s favorite mantra back in those days. After all, to argue that poker was a game of skill was to simultaneously assert that poker isn’t gambling, and thus should be exempt from laws explicitly governing gambling. Honestly, if you were an offshore online poker operator trying madly to skirt U.S. law, how could you not warm up to such a single, benign point of view?

    But Black Friday came anyway and blew away U.S. online poker – and the skill-game argument went away with it. Some of the defendants continued to hang on to it during the course of their trials, but for the most part, it’s surprising how rarely you hear it being brought up nowadays. The pitifully short-lived “success” of the U.S. vs Lawrence DiCristina case, where a judge tried unsuccessfully to decree that poker wasn’t “gambling” under the Illegal Gambling Business Act, further demonstrates just how unfashionable – and alarmingly ineffective – the entire principle is becoming.

    But don’t just take my word for it. Check out this interview with Ultimate Gaming CEO Tom Breitling, who went on Bloomberg TV to discuss the developing U.S. online gaming industry.

    This interview is significant because Breitling efficiently lays out all of the new talking points of the online poker advancement movement, which include:

    • Online poker will create jobs and tax revenue.
    • Regulating it will protect the players.
    • America needs to be a leader in this space.

    At no point during the interview did Breitling ever bring up the argument that poker is a game of skill, or that it’s America’s game, or anything else you may be more used to hearing from Chris Ferguson than from Chris Danek.

    But it gets even better. You would think that the perfect opportunity to throw some “skill game” love in there would come up once the interviewers ask Breitling about the wider offering of online casino games in New Jersey and how that differs from Nevada’s poker-only regulations. I could totally see a Howard Lederer going out of his mind in a spot like that trying to make a distinction, but Breitling still doesn’t bother to spare one word about how special poker is supposed to be!

    Maybe it’s because nobody actually cares. Changing people’s minds about the intellectual purity of poker may have always been a far more quixotic undertaking than its proponents made it out to be. Ever since Black Friday, we’ve seen a lot more success at the state level by legislatures stressing points much closer to the ones that Breitling just finished enumerating. There are still some remnants of the skill-game argument at the federal level, but maybe that’s part of the reason why no federal bill has yet gone anywhere while more pragmatic state-by-state efforts are cruising along nationwide.

    Perhaps it’s like the 13th law in Robert Greene’s book The 48 Laws of Power: When asking for help, appeal to people’s self-interests, never to their mercy or gratitude. As catchy and benevolent as it appeared, the “skill game” argument was still designed and intended to advance the self-interests of a powerful business bloc that’s now been removed from the picture. Following that dethronement, we’re beginning to see the establishment of new rhetoric meant to advance new self-interests – but still conveniently posing as beneficial to the community as a whole. Is it legit this time, or are we going to fall for it all over again?

    QuadJacks – August 16, 2013

    About Marco Valerio

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    There are 4 Comments

    1. Pingback Hyperlocal Hyperloop

    2. - August 17, 2013
        -   Reply

      The “skill game” argument still has its uses. Certainly in regards to federal legislation, it is a key argument for a carve-out for online poker from any online gambling prohibition bill. We may yet see such a bill advanced in Congress in the face of state-authorized online gambling expansion.

      Perhaps more importantly, the argument can play an important role in preventing the slow death of online poker at the hands of the tax man. There seems to be an ongoing trend at the state level to disallow the federal itemized deduction for gambling losses for the purpose of state income tax assessments. The political justification for this trend is that gambling is a discretionary activity, and therefore losses should not be deductible. Of course, the motivation is simply another tax-revenue grab.

      For poker, this elimination of the gambling loss deduction will make the game unbeatable. As federal tax rules stand in regards to poker, each winning session is supposed to be counted as taxable gambling income and each losing session is a gambling loss gets added to your gambling loss deduction. A bit unwieldy but usually manageable. For online play, players in states which have eliminated the gambling loss deduction for state taxes will face large tax bills, often exceeding by far any net winnings.

      As an example, let’s say that you multi-tabled, did some table hopping and played several sit ‘n-go tournaments on a Saturday, for a total of $1000 in wins and $950 in losses, counting each table and each tournament as an individual session per tax rules. If your state income tax is 5% and no gambling loss deduction is allowed, you will pay your $50 net win as state income tax.

      It’s worse for losing players – the typical recreational player – who will find that they owe significant state income tax even though they lost money for the year on their play. How long until the recreational players stop playing online?

      The “skill game” argument may come into play to distinguish online poker as needing separate tax treatment from casino gambling. It really needs to happen at the federal level. Fortunately, the poker sites will have the most motivation to get it done as they eventually run up against dwindling numbers of participating players.

    3. Pingback The “Poker is a Skill Game” Argument Still Has a Role to Play – QuadJacks

    4. Pingback Some Online Poker Network Actions Interfere with Skill Debate |

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