Casinorip Affiliates Blog: IS SKILL GAMING A LEGAL REVENUE GENERATING ALTERNATIVE FOR THE US MARKETS?

Following the recent UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT 2006 that was passed, this seems to be the question on everyone’s lips and affiliates in particular – since the repercussions of this act being passed would mean that any US based affiliate promoting internet gambling would essentially be deemed as “aiding and abetting” in an unlawful act and could face up to 5 years in prison as well as receive a substantial fine.

So what does this mean for Affiliates that have built a successful business out of promoting Casino’s, Sportsbooks and Poker portals online? How are they to continue earning revenues and making a living once the act is enforced?

The answer is simple – Affiliates should look to promote Skill Games instead!

GameAccount (a skill game network including Backgammon, Gin Rummy (RedHotRummy.com) and other skill based games) has secured the legal opinion from a leading Professor of Gambling law – * Professor I . Nelson Rose, from the Whittier Law School based in California – who when contacted via E-mail on the 03 October had the following to say: (Relevant excerpts from the original transcript have been copied here)

Sent: Tuesday, October 03, 2006 8:52 AM

Subject: Skill-based gaming in the USA

Professor Rose,

As an undisputed expert analyst of the new eGaming legislation, are you of the opinion that online skill-based games for money prizes, currently permitted by 30+ US states, will be outlawed by these new federal laws? As a skill-based gaming company based here in the UK we are considering our position with respect of US-residents in the 30+ permitted states.

It seems arguable that any skill-based game is subject to some degree of chance, however small. The language used “game subject to chance” seems to catch not only poker companies but other companies such as WorldWinner.com and Skilljam.com. What is your view?

Thanks in advance - Dermot Smurfit, Director, GameAccount

From: I. Nelson Rose Sent: 05 October 2006 09:36 To: Dermot Smurfit Subject: Re: Skill-based gaming in the USA

“Thank you for writing. I don't think the Act will affect skill gaming. I've attached my analysis.”

To re-iterate further, Professor Rose stated in his analysis that **“The Act exempts activities that we all know are gambling, but are, by statute, declared not to be gambling” In essence this means the current Act doesn’t override any existing legislation already in force where skill games are included in this decision. i.e If it was considered legal before this bill was passed – then it will remain legal thereafter.

This is demonstrated in the legal opinions secured by GameAccount from both UK and US attorneys confirming that both Backgammon and Gin Rummy are skill-based games from the perspective of US regulators on the basis that skill is the dominating factor in determining the outcome of the game.

Backgammon: Hilary Stewart-Jones, Berwin Leighton Paisner, January 2006

“In California (California Business and Professions Code 17539.3 and 17539.35) there are rules for operations of a contest. A contest is defined as ‘any game puzzle device or plan which offers prospective participants the opportunity to receive or compete for gifts or prizes on the basis of skill or skill and chance and which is conducted wholly or partly on the payment of some value. ‘Contest’ does not include a sporting event, performance or tournament of skill, power or endurance between participants who are actually present’.

In addition the Californian courts in the case of Re Allen decided that bridge was a game of skill. In Re Allen (59Cal. 29-5) the court stated “the test is not whether the game contains an element of chance or an element of skill but which of them is the dominating factor in determination of the result of the game.””

Gin Rummy: Martin D. Owens, Attorney at Law, Nevada, August 2006

“1. Because the primary legal elements of consideration and prize are only present at the individual players’ mutual discretion in any game of Gin Rummy offered at the GameAccount Website, GameAccount cannot be legally regarded in this respect as “ engaged in the business of gambling” under U.S. law.

2. The current mix of American State and Federal gambling law does not, even yet, clearly and reliably delineate where jurisdiction lies regarding cross border gaming or gambling, and there is no real sign of this situation evolving in the near future.

3. Gin Rummy is not perceived in the American public mind as a game which poses any risk of massive financial loss, moral degeneration or association with criminal elements. To the contrary, it is perceived as an essentially harmless, wholesome pastime, notwithstanding that it possesses elements which may be technically labelled “ gambling” or “ game of chance”. For this reason the game and its operators make a very poor target for ambitious prosecutors, in the essentially political decision of whom to prosecute, and when, and why.

And therefore I conclude that since Gin Rummy is not under any significant risk of being classified as a gambling game, there is consequently little or no risk that advertising it would be subject to interdiction as “ promoting gambling” , “advancing gambling activity” or assuming the role of a “ professional gambler” under any applicable U.S. State law. And that , in turn, means that no perceptible grounds exist for invoking U.S. Federal anti-gambling laws against Game Account’s offering of Gin Rummy, or advertising it, for these Federal laws essentially turn on a predicate violation of U.S. State laws.”

GameAccount maintains a watchful brief over the US position in respect of US residents engaging in GameAccount’s skill-based games for real money prizes. The Directors of the Company believe the practice of the business meets and exceeds Industry best-practice in a responsible fashion.

* I. NELSON ROSE

Professor I. Nelson Rose is recognized as one of the world's leading experts on gambling law. A tenured full Professor at Whittier Law School in Costa Mesa, California, Prof. Rose is also an internationally known scholar, author and public speaker.

Professor Rose is best known for his internationally syndicated column, "Gambling and the Law®" and his landmark 1986 book with the same name. The author of more than 1,000 published works, including Gambling and the Law and Blackjack and the Law. He wrote the chapter on Internet gambling for the first casebook on gaming law, Gaming Law: Cases and Materials, and in 2005 co-authored Internet Gaming Law (available at www.liebertpub.com/igl).

Harvard Law School educated, Prof. Rose is a consultant to governments and industry. He has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, including the first NAFTA tribunal on gaming issues, and has acted as a consultant to major law firms, international corporations, racetracks, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas, the province of Ontario, and the federal governments of Canada, Mexico and the United States.

With the rising interest in gambling throughout the world, Prof. 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 taught classes on gaming law to the F.B.I., at the University of Ljubljana in Slovenia, Sun Yat-sen University in China and the Universidad de Cantabria in Spain, and as a Visiting Scholar for the University of Nevada-Reno's Institute for the Study of Gambling and Commercial Gaming. Prof. Rose has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.