Poker is a game of chance, but it’s also a game that requires a fair amount of skill. Players can use poker analyzer software to help them make better decisions at the table and improve their game. However, this technology raises questions about the legal implications of using it.
In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), a law that made it illegal for online poker sites to accept certain types of payments from their players. The Act was designed to prevent the knowing receipt of funds for the purposes of unlawful gambling, and it effectively shut down a burgeoning industry. The law uses three different tests to determine whether a mixed game like poker is legal: the predominant factor test, the material element test and the any-chance test.
The predominant factor test asks whether the dominant factor in a game is chance or skill. In the case of poker, this would mean that while the random cards that a player receives are a matter of chance, skill predominates because knowing how to play the cards, reading other players and making strategically placed bets are all skills. The material element test asks whether chance is a substantial component in a game. In the case of poker, this would be if there is enough chance to significantly affect a player’s overall profitability.
Finally, the any-chance test considers whether a game has any chance at all. In the case of poker, this would include things like a player’s yearly ranking in a tournament. Levitt and Miles have shown that, in fact, the yearly rankings of players tend to correlate over time.