Friday, January 19, 2007

The manager of a 23,000-member private card club in London was convicted
today of violating Britain's gambling laws after a jury decided poker is a
game of chance, not pure skill. Derek Kelly argued that he didn't need a
gambling license to take a share of profits from players at his club because
the U.K.'s Gaming Act 1968 covers games like roulette, not skill- based
games like poker or chess. The jury disagreed, and convicted Kelly of
illegally taking profits of as much as 10 percent from players on two
occasions at the Gutshot club. A not guilty verdict ``could have caused
enormous problems for the gaming industry because then you have the green
light in some people's eyes for unregulated poker,'' Justice Simon Wilkinson
said in court. Prosecutor Graham Trembath QC had argued that shuffling a
deck of cards was enough to make poker both a game of significant chance and
significant skill, which falls under the U.K. government's interpretation of
``chance.'' Kelly, who the judge said is unlikely to get a prison sentence,
faces a fine at a Feb. 16 hearing. He said he is considering an appeal. ``It
is important that we take time, take stock, and go down to Gutshot to
rearrange what we do, but we are not closing,'' Kelly said in an interview
after the decision. Worldwide Revenue The verdict issued after more than two
hours of deliberations has been watched by London's 26 poker clubs, tens of
thousands of players and online poker operators worldwide that generate
revenue ``in excess of $100 million a day,'' according to Kelly. PokerStars,
an Isle-of-Man based Internet site that has dealt 6 billion hands, said in
October it would keep taking bets from American players because a U.S.
federal law passed last year doesn't apply to skill-based games like poker.
For the last week, Kelly's competitors, reporters and men in pinstripe suits
who described themselves only as ``interested parties'' jockeyed for a seat
at Snaresbrook Crown Court in east London to hear expert players discuss the
skills needed to play poker games like ``Texas Holdem.''

Today's ruling helps clarify U.K. law as Britain gears up to license online
casinos for the first time Sept. 1.

The online gaming industry has been in turmoil since the U.S. passed
legislation last year that prevented credit-card companies from collecting
payments in online bets. The U.S. law wiped $7 billion off the market value
of companies such as Sportingbet Plc.

The Gutshot case is running parallel to the St. Louis case of David
Carruthers, founder of British Internet bookmaker BetonSports Plc, who
pleaded not guilty Jan. 11 in the U.S. to using telephone lines to place
bets from state to state.