poker

  • 06 Aug 2013 at 11:40 AM

Poker Is Gambling Again, FYI

A while back a federal judge in New York decided that poker wasn’t illegal gambling under federal law, and we discussed it here, and so I feel a certain sense of responsibility to all of the Dealbreaker readers who quit their jobs to start poker rooms. So I should tell you that that decision was reversed today on appeal, and poker is illegal again, so you’d better shut down your poker room and go back to trading derivatives ha ha ha.

Other than that I don’t have much to say about the decision. The lower court’s decision declaring poker legal was very scholarly about how poker is predominately a game of skill, not of chance, and so is not “gambling.” But it was pretty loony on the law: poker is undisputedly illegal gambling under New York law, so the question of whether it was illegal under federal law turned on whether it’s a “gambling business which is a violation of the law of” New York. The district court said, well, it’s a violation of New York’s gambling law, but it’s not a “gambling business” under my reading of the word “gambling,” because it’s a game of skill, so you’re free to go. The appeals court ignores all the chance vs. skill stuff and just says “it’s gambling under New York law, so it’s gambling under the statute, so you’re hosed.” That’s sad but also probably right.

Here you can read Floyd Norris complaining that synthetic CDOs, and by extension most derivatives trades, are just gambling, the equivalent of a bank’s “put[ting] together a betting book and taking out the bookie’s cut.” Read more »

  • 15 May 2013 at 3:40 PM

Hedge Fund Manager Loses 85% On Actual Bet

Some hedge fund managers—Marc Lasry, for instance—are known to be aficionados of poker. Some—David Einhorn comes to mind—are known to be quite good at it.

Talal Shakerchi, unbowed though he might be, may no longer qualify for the latter accolade, having blown nearly an entire lifetime’s winnings in one night. Read more »

Disruption on Wall Street, resulting in image problems for the industry, smaller bonuses and less lavish perks, are spurring other midcareer bankers to similarly reassess their careers. After a lifetime of targeted choices—attending top-tier schools and pursuing competitive internships in hopes of winning high-paying finance jobs—some bankers are bailing out with no Plan B. Their only certainty, according to interviews The Wall Street Journal conducted with a dozen midcareer bankers, is that they no longer want to stay in banking…Andy Frankenberger left the industry in 2009 after 14 years as an equity-derivatives trader. “I wanted to grow more as a person,” he says. A recreational poker player, the 39-year-old began playing tournaments in 2010 and has since raked in $2.5 million in winnings. Still, Mr. Frankenberger says he wouldn’t rule out someday returning to banking or even starting his own hedge fund. “A lifetime is a long time, right?” he says. [WSJ]

  • 21 Aug 2012 at 2:25 PM

Poker Is Not Gambling, Jury Still Out On Investing

Because this is Dealbreaker: A Place For Finance And Sometimes Poker™, I figured some of you would be interested to know: poker is now legal!

Sort of. Basically a fellow named Lawrence Dicristina was running a poker room in Staten Island. He was arrested by the Feds and charged under the federal Illegal Gambling Business Act. He was convicted by a jury and asked a federal judge, Jack Weinstein, to throw out the jury verdict because he ran a poker room and poker isn’t gambling. Today Judge Weinstein agreed: under federal law, poker isn’t gambling. So Dicristina is free to go.

The opinion is here and it is 120 pages; the important don’t-try-this-at-home headline is that this opinion “does not undermine the holding that poker is gambling as defined by New York law” and therefore probably illegal in New York. It’s just not federally illegal, which I suspect means that Lawrence Dicristina may follow in Sergey Aleynikov’s footsteps to state court. And this is just the opinion of one judge in one district, so consult your lawyer before you restart your online poker business/Ponzi scheme/other scheme that is not technically a Ponzi scheme: the online poker crackdown is unlikely to stop just because of this.

Nonetheless it’s a nice win for the forces of poker. The decision basically turns on whether poker is mostly a game of chance (gambling, bad) or skill (not gambling, okay). For this the court looked at the testimony of two experts, defense expert Dr. Heeb, “a respected economist, statistician, and player in national poker tournaments,” who argued that skill predominates, and prosecution expert Dr. DeRosa, an econometrician who “neither has any personal experience with poker, nor has he independently analyzed the game,” and therefore felt comfortable saying that it’s mostly a game of chance, which, okay, nice intellectual honesty prosecutors.* Given that – and, the fact that, y’know, poker is a game of skill – it’s not surprising that the judge came out for the defense.

Even if you’re not one of our readers who comes here for the gambling tips, you still may enjoy this opinion just for its recapitulation in miniature of the efficient markets hypothesis. Here is the defense expert’s money chart: Read more »

If you were worried that Social Security is a Ponzi scheme and planned to fund your retirement with poker winnings, today turned out to be a bad day for you. While we here at Dealbreaker generally endorse keeping all of your money in poker, keeping all of your money in Full Tilt Poker was not the correct way to do so. Insofar as it now looks like you’ll only get back at best fifteen cents on the dollar. From the US Attorney’s complaint today:
Read more »

Someone must be wearing his lucky sweatshirt. Read more »

You’re a hedge fund manager running a Ponzi scheme in Los Angeles. You’re pretty into poker and attend bi-weekly games with various actors who, as it unfortunately turns out, aren’t half bad at cards. The buy-in’s $100,000 but you don’t have the cash. What do you do? If you’re Brad Ruderman you use some client funds to cover it, as well as the money you lose to Spiderman and Co. Read more »

  • 30 Mar 2011 at 10:15 AM

Great News For Morgan Stanley Shareholders

James Gorman’s poker performance indicates he’s unlikely to run the firm into the ground. Read more »