886 F.Supp.2d 164 (E.D.N.Y. 2012), 11-CR-414, United States v. Dicristina

Docket Nº:11-CR-414.
Citation:886 F.Supp.2d 164
Opinion Judge:JACK B. WEINSTEIN, Senior District Judge.
Party Name:UNITED STATES of America v. Lawrence DICRISTINA, Defendant.
Attorney:Office of the United States Attorney, Brooklyn, NY, By: Marisa M. Seifan, Nathan Daniel Reilly, for the government. Kannan Sundaram, Federal Defenders, Brooklyn, NY, for Defendant. Kenneth M. Dreifach, ZwillGen, PLLC, New York, NY, By: Thomas C. Goldstein, Tejinder Singh, Goldstein & Russell, P.C...
Case Date:August 21, 2012
Court:United States District Courts, 2nd Circuit, Eastern District of New York
 
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Page 164

886 F.Supp.2d 164 (E.D.N.Y. 2012)

UNITED STATES of America

v.

Lawrence DICRISTINA, Defendant.

No. 11-CR-414.

United States District Court, E.D. New York.

August 21, 2012

Page 165

[Copyrighted Material Omitted]

Page 166

Office of the United States Attorney, Brooklyn, NY, By: Marisa M. Seifan, Nathan Daniel Reilly, for the government.

Kannan Sundaram, Federal Defenders, Brooklyn, NY, for Defendant.

Kenneth M. Dreifach, ZwillGen, PLLC, New York, NY, By: Thomas C. Goldstein, Tejinder Singh, Goldstein & Russell, P.C., for amicus curiae Poker Players Alliance.

MEMORANDUM, ORDER, & JUDGMENT

JACK B. WEINSTEIN, Senior District Judge.

Table of Contents
I. Introduction 168
II. Facts 170
A. Procedural History 170
B. Evidence on Poker 171
1. Poker in the United States 171
2. Game Play Generally 172
3. Expert Testimony 173
a. Defense Expert 173
b. Government Expert 185
c. Defense Expert's Supplemental Report 189
4. Other Evidence 193
5. Conclusions of Other Courts and the States 194
6. Compared to Video or " Joker" Poker 197
C. Evidence at Trial 198
III. Federal Rule of Criminal Procedure 198
IV. Rules of Statutory Construction 199
A. Generally 199
B. Rule of Lenity 199
V. Federal Gambling Laws 200
A. Illegal Gambling Business Act 200
1. Statutory Language 200
2. Dictionary Definitions 202
3. Common Law 202
4. Legislative History 203
a. Purpose of the Statute 203
b. Definition of Gambling Generally 205
c. Discussion of Particular Games 207
5. Commission on the Review of the National Policy Towards Gambling 210
6. Subsequent Mafia Involvement in Poker Games 211
B. Other Gambling Statutes 212
1. Contemporary with the IGBA 212
2. Pre-IGBA 213
a. Transporting Gambling Materials 213
b. Gambling Ships 215
c. Wire Act 215
d. Travel Act 215
3. Post-IGBA 216
a. Indian Gambling Regulatory Act 216
b. National Gambling Impact Study Commission Act 217
c. Unlawful Internet Gambling Enforcement Act of 2006 219
VI. Proof Needed That Business Engaged in " Gambling" Under the IGBA 219
A. Limited Case Law Interpreting 18 U.S.C. § 1955(b)(2) 219
B. Statutory Text and Legislative History are Ambiguous 221
1. Text 221
2. Legislative History 223
3. Other Federal Statutes 224
C. Rule of Lenity Weighs in Favor of the Defendant 224
VII. Poker is Not Gambling Under IGBA 224
A. No Controlling Federal Cases 225
B. Only " Games of Chance" Are Gambling Under IGBA 226
1. Statute is Ambiguous 227
a. Text 227
b. Dictionary and Common Law Definitions 227
c. Legislative History 227
d. Other Federal Statutes 228
2. Gambling Not Limited to House-Banked Games 229
3. Gambling is Limited to Games Predominated By Chance 229
C. Poker is Predominated By Skill Rather than Chance 231
D. Poker is Not Gambling Under IGBA 234
VIII. Conclusion 235
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 177
Fig. 2: Win rate comparison: Queen Jack suited (e.g.Q‹ ‹ spade› › J‹ ‹ spade› › ) 180
Fig. 3: Win rate comparison: King Nine offsuit (e.g.K‹ ‹ spade› › 9‹ ‹ club› › ) 181
Fig. 4: Average win rate for players of different predicted skill, for $5/$10 stakes players in the prediction group 183
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 184
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 187
Fig. 7: Simulated Cumulative Winnings of Top 10 Winners and Losers (1,000 players, 100,000 trialseach) 188
Fig. 8: Average win rates for players of different predicted skill, for $5/$10 stakes, adding rake backin player results 190
Fig. 9: Contribution of skill to poker 193

Page 168 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 defendant's establishment was " Texas Hold'em," a game described in Part II(B)(1), infra. When reference is made to " poker" in this memorandum, this is the variant of poker referred 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 Hr'g 89:1-5, July 6, 2012 (" Def. Expert Daubert Hr'g 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 Hr'g Tr. 85:5-86:1— the violation of which is an element of the federal offense, see 18 U.S.C. § 1955(b)(1)(i)— he has not renewed this Page 169 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 assumed that poker contains a sufficient element of chance to constitute gambling under that state's 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 Plato's Cave Corp. v. State Liquor Auth., 115 A.D.2d 426, 496 N.Y.S.2d 436, 438 (1st Dep't 1985), aff'd 68 N.Y.2d 791, 506 N.Y.S.2d 856, 498 N.E.2d 420 (1986) (holding that a Joker Poker video game fell under § 225.00's 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, 11 A.D.3d 62, 780 N.Y.S.2d 47, 64 n. 5 (3d Dep't 2004) (noting that " the term ‘ game of chance’ or ‘ contest of chance’ ... has been interpreted to include such games as ‘ stud’ poker" ), aff'd 68 N.Y.2d 791, 506 N.Y.S.2d 856, 498 N.E.2d 420 (1986); People v. Turner, 165 Misc.2d 222, 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 player's favor, but cannot determine the outcome regardless of the degree of skill employed." ); People v. Dubinsky, 31 N.Y.S.2d 234, 237 (Bronx 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. Katz's Delicatessen, Inc. v. O'Connell, 302 N.Y. 286, 97 N.E.2d 906, 907 (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 defendant's argument in favor of dismissal is two-fold. First, he claims that even if poker...

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