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Best of I. Nelson Rose

Gaming Guru

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But Is It Gambling?

14 November 1999

"I imply no criticism of the Court, which in those cases was faced with the task of trying to define what may be indefinable... I shall not today attempt further to define [hard-core pornography]... But I know it when I see it..."

Justice Potter Stewart,
Jacobellis v. Ohio (1964).

Unlike pornography, gambling is not necessarily something you can recognize on sight.

Determining whether an activity is gambling under the law is a two-step process. First, the game or scheme must meet the legal definition of gambling. This usually means that three elements must be present: Consideration, Prize and Chance.

The second step requires lawyer-like thinking: Even if it is gambling, is there another law that says that it is not?

Gambling is universal, found in all cultures and all times. It has also almost always been universally condemned. So, the law lays down broad general definitions in an attempt to cover every possibility, even games that have not yet been invented.

But, many forms of gambling are not prohibited. Legislatures will often legalize an activity by simply passing a law declaring that it is not gambling.

Every jurisdiction has the right to define the three elements of gambling, Consideration, Prize and Chance, any way is sees fit.

1) Consideration usually means players must pay something of value to be eligible to participate.

2) Prize includes not only money, but anything of value.

3) Chance means the outcome is not determined by skill.

I recently participated in an evening's entertainment, which may have been gambling -- or maybe not. The setting shows how difficult it can be to determine whether these three elements are present.

During the summer and the holiday season, UCLA turns its Lake Arrowhead conference center into Bruin Woods, a family resort for alumni and their families. Activities include everything you would expect in a modern vacation get-away: arts and crafts, hiking, lots of food, and, of course, bingo.

Was the bingo gambling? We first have to look for the three elements.

Was there consideration? A few states have held that having to go to a particular location to participate in a game or drawing constitutes consideration. Fortunately, the California Supreme Court has said that consideration requires paying money for the chance to win.

So, even though I and the others players had to be present to play, there was no consideration.

But wait. I had to spend money to be a registered guest at the camp. And the money did go to the operator, including to pay for the prizes.

If UCLA were ever challenged on this, it would have to say that the game was open to anyone -- "no purchase necessary."

The prizes ranged from a stuffed bear to a gift pack of wine and cheese. Not exactly Las Vegas. But, the law says a prize is anything of value, no matter how small. California has even said that free replays qualify as prizes for determining whether a game is gambling.

Chance would seem to be the easiest element to meet. There have been court cases fought over blackjack, backgammon and poker. But, chance clearly determines the outcome in bingo.

The courts determine whether a game is predominantly skill by looking at the average player under normal playing conditions. This particular bingo game was open to children.

A favorite variation that night was "Losers' Bingo." Everyone in the room stood up, holding a single bingo card. As the numbers were called, players having that number on their cards had to sit down. The last one standing won the prize.

Kids as young as two-years old not only had to understand the rules; they had to obey them. Have you ever tried to get an excited two-year-old to sit down and stay seated?

Some legislatures have tried to shortcut this type of analysis by declaring that charity bingo is not gambling. Of course, this then necessitates a new set of rules on what constitutes a charity -- and what exactly is bingo.

Congress took this approach in enacting the Indian Gaming Regulatory Act (IGRA). A new federal crime was created, "Gambling in Indian country." All state laws, including all regulations and licensing requirements, which apply to gambling in a state now apply to gambling on Indian land in that state. A violation of those state laws is now a federal crime.

However, IGRA contains the following provision. "The term 'gambling' does not include" Class I or II gaming regulated by IGRA or Class III gaming conducted under an approved compact.

Bingo is a form of Class II gaming under IGRA.

If the UCLA bingo game were played on a reservation, the game, by law, would simply not have been gambling -- proving that you cannot know gambling is gambling, even when you see it.

Recent Articles
Best of I. Nelson Rose
I. Nelson Rose

Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose

I. Nelson Rose
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose