Poker Club Manager Convicted Under U.K. Gambling Laws

Bloomberg — 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 USD 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 USD 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.