Topic:
INDIANS; GAMBLING; NON-PROFIT ORGANIZATIONS; LEGISLATION;
Location:
GAMBLING;

OLR Research Report


August 16, 2007

 

2007-R-0495

LEGALITY OF POKER IN CONNECTICUT

By: Veronica Rose, Principal Analyst

You asked about the legality of private organizations hosting poker games and whether the law defines “bona fide social relationship” for purposes of determining what gambling falls under this social exemption.

This office is not authorized to issue legal opinions and this report should not be construed as such.

SUMMARY

With some exceptions, gambling (including poker) is illegal in Connecticut, unless such gambling is (1) “incidental to a bona fide social relationship,” which the law does not define, or (2) being conducted at the state's two Indian casinos under the Indian Gaming Regulatory Act (IGRA) and state-tribal agreements.

The Division of Special Revenue (DSR), which regulates gambling in Connecticut, has indicated that (1) it is illegal for private clubs and organizations to host poker games; and (2) poker playing under these circumstances violates state-tribal agreements that give the Mashantucket Pequots and Mohegans exclusive rights to conduct casino gambling, including poker, in return for a percentage of their slot revenue.

In July 2004, the Attorney General's Office informed several Connecticut bars that the state's gambling laws expressly prohibit them from promoting or hosting public poker nights at their establishments. In a press release on the issue, the office said “gambling is permitted sparingly—only in social situations,” but it did not define social situations. In a December 2004 formal opinion to the Liquor Control Commission on the legality of a liquor premises hosting poker for non cash prizes, the attorney general concluded that the activity (1) violates several liquor control laws and (2) does not fall under the social gambling exception. But the office said the question of whether the activity constitutes gambling, and is thus illegal under the gambling statutes, should be referred to the chief state's attorney for resolution.

Neither DSR nor the Attorney General's Office has defined “incidental to a bona fide social relationship,” and the legislative history of the law that added the exemption (PA 73-455) is silent on the issue. Connecticut courts have not ruled on the issue either.

Our review of three Supreme Court cases from Colorado, which has a similar law to Connecticut's, shows that the courts consider gambling “incidental to a bona fide social relationship” when the participants have an established, legitimate social relationship based upon some common interest other than gambling. The Colorado courts' decisions are not binding on Connecticut courts.

GAMBLING

By law, it is illegal to gamble in Connecticut unless the gambling (1) is specifically authorized by state law or other legally binding state agreements (charitable gaming and Indian casino gaming) or (2) fits an exemption in the criminal laws. It is also illegal to solicit or induce others to gamble, or be present when others are gambling. A violation of the gambling laws is a class B misdemeanor, punishable by imprisonment of up to six months, a fine of up to $1,000, or both (CGS 53-278b).

Definition

Gambling means. . . :

risking any money, credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance or the operation of a gambling device, including the playing of a casino gambling game such as blackjack, poker, craps, roulette or a slot machine, but does not include: Legal contests of skill, speed, strength or endurance in which awards are made only to entrants or the owners of entries; legal business transactions which are valid under the law of contracts; activity legal under the provisions of sections 7-169 to 7-186, inclusive; any lottery or contest conducted by or under the authority of any state of the United States, Commonwealth of Puerto Rico or any possession or territory of the United States; and other acts or transactions expressly authorized by law on or after October 1, 1973 (CGS 53-278a).

Social Gambling Exception

The law exempts people from prosecution and punishment for gambling (including poker), when such gambling is “incidental to a bona fide social relationship, is participated in by natural persons only and. . . no person is participating, directly or indirectly, in professional gambling” (CGS 53-278b). In practice, this means that an activity that meets the legal definition of gambling is legally permissible if it meets the social gambling exemption.

The law does not define “incidental to a bona fide social relationship”; the legislative history of the law does not indicate the legislature's intent in enacting the exemption (see House and Senate debate attached); and we found no controlling Connecticut court ruling on the meaning of the term as it pertains to gambling.

State-Tribal Agreements

The Mashantucket Pequots and Mohegans have separate binding agreements with the state that allows them to legally conduct, and people to legally play, poker (and other gambling not at issue here) at the casinos. The agreement, called a memorandum of understanding, gives the tribes the exclusive right to conduct commercial casino games in exchange for a monetary payment to the state. Part of the agreement reads as follows:

The Tribe agrees that, so long as no change in state law is enacted to permit the operation of video facsimiles or other commercial casino games by any other person and no other person within the State lawfully operates video facsimiles or other commercial casino games, the Tribe will contribute to the state a sum (the “contribution”) equal to twenty-five percent (25%) of gross operating revenues of video facsimile games operated by the Tribe.

* * *

In the event that any change in State law is enacted to permit the operation of video facsimiles or other commercial casino games by any other person or any other person within the State lawfully operates video facsimile games or other commercial casino games, the Tribe shall not be bound by the provisions of the Memorandum of Understanding so long as it does not claim any right to operate video facsimile games by virtue of this Memorandum of Understanding, but the Tribe may thereupon assert any rights which it may otherwise have under the Procedures; provided, however, that in such event neither party shall be bound by any of the provisions hereof nor shall either party be barred from taking any position inconsistent with the Memorandum of Understanding (p. 3, see OLR Report 2002-R-0999.HTM for a description of the slot agreements).

DSR DETERMINATION

DSR, in an August 25, 2004 press release, indicated that the hosting of poker tournaments by commercial bars is illegal.

The hosting of poker games or tournaments at commercial bars would be a clear violation of the State's criminal statutes and a violation of the Memorandums of Understanding (MOUs) between the Mashantucket Pequot and Mohegan Tribes and the State. . . .The General Assembly repealed the Games of Chance Act allowing Las Vegas night games during the January 6, 2003 Special Session. [It] “also specifically added poker amongst other games, as a form of gambling prohibited in Connecticut.” Additionally . . . 53-278b of the statutes provides that anyone who engages in gambling, or solicits or induces another to engage in gambling, or is present when another person or persons are engaged in gambling, shall be guilty of a Class B misdemeanor. Therefore, poker is a prohibited form of gambling and soliciting others to partake in a form of prohibited gambling is also a violation of the State's criminal statutes (DSR press release, August 25, 2004, attached).

In a July 20, 2007 press release, it is illegal for anyone to host poker games. According to the division:

The hosting of poker games by persons, firms or organizations would be a violation of the State's criminal statutes and a violation of the Memorandum of Understandings (MOUs) between the Mashantucket Pequot and Mohegan Tribes and the State. . . . Poker is clearly a prohibited form of gambling and soliciting others to partake in a form of prohibited gambling is a violation of the State's criminal statutes (see DSR press release, July 20, 2007, attached).

DSR does not cite the social exemption provision in either of the above cases. It cites the provision below in response to a question on the legality of playing poker for money or anything of value. But it does not discuss the relevance of the provision or its applicability.

Is it legal in Connecticut to play poker for money or anything else of value?

According to Section 53-278a of the General Statutes of Connecticut, poker is listed as one of the forms of gambling that are illegal in Connecticut. Section 53-278b exempts from prosecution and punishment people who gamble “incidental to a bona fide social relationship” as long as no one other than the participants receives anything from the game. Both the Division of Special Revenue and the Attorney General have determined that the hosting of poker games or tournaments at commercial bars or similar establishments would violate Connecticut law. Poker can be played legally at the two tribal casinos (www.ct.gov/dosr/site/default.asp).

CONNECTICUT ATTORNEY GENERAL'S DETERMINATION

The attorney general, in July 2004, informed several bars that were hosting poker tournaments that the activity is prohibited by law and may also constitute an unfair trade practice. According to the letters:

My office has learned that your establishment has been promoting and hosting public “Poker Nights” and similar activities on its premises. Soliciting the public to engage in gambling at your place of business is expressly prohibited by Connecticut General Statutes 53-278b and by 30-6-A24(a) of the Regulations of Connecticut State Agencies, and may be an unfair trade practice under the Connecticut Unfair Trade Practices (CUTPA). These statutes reflect the State's public policy that gambling should be closely regulated and restricted, indeed banned under many circumstances, to protect the public against abusive or improper activity (copies of letters, dated July 13, 2004, to SBC Restaurant Brewery, Eli's on Whitney, and Rack N Roll).

In a July 13, 2004 press release on the above issue, the office said “Gambling is permitted sparingly—only in social situations” and strongly urged the establishments to honor the state's gambling prohibitions. But the office did not elaborate on what constitutes “social situations.”

On December 17, 2004, the attorney general issued a formal opinion on the legality of a proposed entertainment program at liquor premises involving the playing of poker for prizes (e.g., food, merchandise, and trophies) but no cash prizes or entry fee. According to the opinion, the proposal violated “several provisions of the Liquor Control Act and Regulations of the Division of Liquor Control designed to prevent a tied-house and illegal inducements.”

Another concern is that this activity could constitute illegal gambling, which is prohibited by state criminal law. . . .Clearly the activity contemplated here involves the playing of a game of chance for gain under Conn. Gen. Stat. 53-278a(2), and the fact that random bar patrons from the general public will participate forecloses the social gambling exception in Conn. Gen. Stat. 53-278(a). . . .The inquiry then becomes whether the contestants are risking any money, credit, deposit or other thing of value” as required for [the] activity to constitute gambling under the definition of [gambling]. This question should be referred to the Chief State's attorney for resolution.

In any event, regardless of the criminal law issue, we believe, for the reasons discussed, that this tournament violates several provisions of the Liquor Control Act or Regulations of the Division and should not be permitted (Attorney General's Opinion, December 17, 2004).

COLORADO LAW AND GAMBLING

Colorado Legislation

As is the case with Connecticut, Colorado bans most forms of gambling. The law defines gambling as:

risking any money, credit, deposit, or other thing of value for gain contingent in whole or in part upon lot, chance, the operation of a gambling device, or the happening or outcome of an event, including a sporting event, over which the person taking the risk has no control. . . (Col. Rev. Stat. 18-10-102(2)).

Like the Connecticut law, the Colorado law contains a social gambling provision, which exempts from the gambling definition:

any game, or wager, or transaction which is incidental to a bona fide social relationship, which is participated in by natural persons only, and in which no person is participating, directly or indirectly, in professional gambling (Col. Rev. Stat. 18-10-102(2)(d)).

Legal and Illegal Poker

The Colorado attorney general has distinguished between legal and illegal poker tournaments. The main distinction, he pointed out, is whether the poker being played is considered gambling. According to the attorney general:

For “gambling” to occur, three elements must be present: consideration, chance, and reward. These elements are sometimes expressed as “payment, luck, and prize.” The first level of inquiry, then, is whether all three of these components are present, because by eliminating any one of them, the activity would not meet the definition of “gambling” as set forth in Colorado law.

For example, if the consideration component is eliminated and no fee, buy-in or other money is required or solicited from the participants in a poker tournament, then prizes may be awarded to the player(s) who perform well in the tournament. This is how several organized poker tournaments are able to operate legally outside the three gaming towns. On the other hand, if an organization charges a donation, fee or other buy-in for a poker tournament or other event, then it cannot legally distribute prizes based upon who wins or plays well in the tournament or event. Such organization could legally conduct a drawing, door prize or raffle as long as the prizes are randomly awarded and are not tied to success in the tournament or event. Likewise, the organization could legally conduct the tournament for the pure entertainment value alone. By disconnecting the prize from the risk element of the poker or other event, such activity would arguably not meet the definition of gambling.

If all three elements are present, the activity is considered “gambling” and can only be conducted in the context of “social gambling” . . . . (http://www.ago.state.co.us/FAQ/illegal_gambling_FAQ.cfm)

Social Gambling Exception

According to the Colorado attorney general, a “bona fide social relationship” means that participants:

have an established social relationship based upon some other common interest other than the gambling activity. Further, participants cannot directly or indirectly participate in “professional gambling,” which is defined as “aiding or inducing another to engage in gambling, with the intent to derive a profit there from.” These two criteria—a bona fide social relationship and no profit motive—must be present for a gambling activity to be considered legal “social gambling” (http://www.ago.state.co.us/FAQ/illegal_gambling_FAQ.cfm)

Court Cases

 

In Houston v. Younghans, the court determined that poker playing for money among friends at one of the player's home was incidental to a bona fide social relationship. It was therefore legal (196 Colo. 53, 580 P.2d 801 (1978)). 

In Charnes v. Central City Opera House Ass'n, the court held that a fundraising event featuring gambling was incidental to a bona fide social relationship because the event was limited to participants who, although not necessarily friends, were brought together for the common purpose of raising money and not solely for gambling. This was legal (773 P.2d 546 (Colo. 1989)).

In People v. Wheatridge Poker Club, the court held that playing poker for money in a social club that derived its profits solely from yearly membership dues, a set “per chair” fee, and in which members were solicited through advertisements and promotions for the sole purpose of gambling was not incidental to a bona fide social relationship. It was thus illegal (194 Colo. 15, 569 P.2d 324 (1977)).

Taken together, these decisions show that “incident to a bona fide social relationship” refers to instances in which participants in a game have some legitimate common relationship other than to engage in gambling.

Attachments:

1. Connecticut attorney general's opinion, December 17, 2004, to Liquor Control Commission

2. Connecticut attorney general's press release, July 13, 2004

3. Copies of the Connecticut attorney general's letters to bars hosting poker nights, July 13, 2004

4. DSR press release, August 25, 2004

5. Copy of DSR response on the legality of hosting poker tournaments

6. Houston v. Younghans (196 Colo. 53, 580 P.2d 801; Charnes v. Central City Opera House Ass'n. (773 P.2d 546); People v. Wheatridge Poker Club (194 Colo. 15, 569 P.2d 324)

VR:ts