Offline Poker Tournaments vs. Online Poker Tournaments
The future of offline poker torunaments in the wake of the legalisation of remote skillgaming in Italy and subsequent launch of the first online poker tournaments
A few nights ago, while taking an after-dinner stroll with a few friends in a little seaport town not too far from Rome, a car full of young students pulled by us asking if we could by any chance direct them to an apparently unnamed and unmarked “private club” where a big texas hold’em tournament was due to take place that very night. Regrettably none of us was able to assist the poker-lovers bunch yet two or three thoughts immediately crossed my mind: (i) poker is ever more popular even amongst the youngest generations of Italians, (ii) if the whereabouts of the venue where a big poker tournament was to be held were not easily nor openly available and instead seemed surrounded by a good deal of clandestineness, probably the tournament itself was not authorised or perhaps the type of poker game being offered in the private club was not fully legal, in any event (iii) the law enforcement authorities are unable to effectively cope with the poker-mania phenomenon which is causing an increasing number of poker clubs to spring up all over the Peninsula.
The fact of the matter is, that offline poker tournaments indirectly benefited from the big push the legalisation (July 2006) and subsequent two-phase regulation (September 2007-May 2008) of remote skill gaming gave to real money card tournaments leading many to wrongly believe that the rules explicitly applying to online poker tournaments implicitly covered land-based poker tournaments too, better known in Italy as “poker sportivo” or sporting poker with a good dose of terminological hypocrisy. Such a regulatory misunderstanding was spurred by a provision carried by article 1, paragraph 93 of Law 27 December 2006 (also known as the Finance Act 2007 or simply “FA07”) which stated that any card games organised in the form of a tournament and where the pool prize is based solely on the buy-in fee, are to be considered skill games.
The FA07 provision in comment was aimed at ensuring that once the Italian gaming regulator (AAMS) would eventually implement the remote skill gaming rules, online poker tournaments would be automatically classified as a skill-based game and as such they could be legally and legitimately offered to Italian players subject always to specific regulatory restrictions established by AAMS for game purposes being fully complied with. This is what in fact happened thereby paving the way to the launch of the first AAMS-licensed real money online poker tournament in September 2008 by an Italian operator (Gioco Digitale), followed shortly thereafter by a few others including BWin, Lottomatica, Snai, Sisal, Eurobet, etc.
However, the mere inclusion in the remote skill gaming category of any kind of card-based tournament complying with the FA07 requirements was not meant to legalise poker outright nor to apply to offline poker tournaments which therefore continue to be covered by a different legal and regulatory regime. Indeed the legalisation and regulation of remote skill gaming in Italy did not abolish nor otherwise affect the general gambling ban contemplated by articles 718 and following of the Criminal Code which still apply to all games of chance (including poker and other cash games) carried out in terrestrial premises other than the four fully-licensed Italian casinos, namely Venice, Campione, St. Vincent and Sanremo. This explains why at the moment a texas hold’em tournament legally hosted on any AAMS-licensed online gaming platform could instead well possibly take place in terrestrial premises if the local police authorities competent to authorise such an event had in fact included poker in the official list of games covered by the general gambling ban.
Notably the lack of any thorough and uniform guidelines from the central police department at the Ministry of Interiors as to which games should actually be listed nationwide as illegal gambling has over the years led to a disharmonised and at times also conflicting interpretation, application and enforcement at local police level of the Criminal Code gambling restrictions particularly with regard to live poker tournaments.
The quite unclear status for regulatory purposes of live poker tournaments triggered a number of court cases involving their actual legality under the current rules and resulted in November 2008 in a landmark ruling by the Council of State (the Italian supreme administrative court) which appropriately and timely cast some light over the grey area of offline poker tournaments.
The ruling issued by the Council of State is largely based on a well-articulated opinion submitted by the legislative office of the Ministry of Interiors (“MoI”) whose main points can be summarised as follows:
1. The MoI authorities confirm that the law provisions and subsequent regulations whereby remote skill games were introduced in Italy are not aimed at repealing the criminal code provisions in matters of gambling but only at legalising and strictly regulating real money remote skill games carried out pursuant to a state-granted licence. Hence offline poker does not fall under the scope of the remote skill gaming rules
2. Pursuant to the FA07 law provisions, card-based tournaments qualify for skill game classification provided (i) they are offered remotely (not live) and the pool prize is solely based on the buy-in fee. By contrast no mention whatsoever is made therein to offline poker tournaments which accordingly should be considered in principle as a game of chance thereby falling under the general gambling ban laid down in the Criminal Code
3. Section 721 of the Criminal Code is still fully in place and requires that illegal gambling has two features: (i) the service is offered for a profit and (ii) it entails a game of chance
4. Whenever a live poker tournament is conducted for a profit of its organisers or however the pool prize is not just token, the game cannot be considered a play-for-fun event and becomes a play-for-money instead
5. There is no standard criterion to establish whether the amount of the pool prize is such as to give rise to a profit for the organisers hence the actual nature and purpose of a live tournament has to be assessed from case to case having regard to: (i) whether it is to be carried out at local, regional or nationwide level, (ii) a buy-in fee is charged only in the final stage of the tournament as opposed to it being required also in the qualification and/or pre-final rounds (in which case it ought not to exceed €30 anyway). Even in those cases where the entry fee was very modest a live tournament could equally devise a play-for-money event if the aggregate amount of all buy-ins resulted in a not economically irrelevant amount
6. When multiple games are simultaneously played within the same live tournament, a player who entirely used up his fiches plafond must be ruled out of the context hence no re-buys are allowed
7. The promoter of a live tournament cannot be authorised by the police authorities to run more than one event on the same day and in the same venue
The MoI report is an important term of reference and going forward it should hopefully enable the police authorities to adopt also at local level a more consistent, uniform and well-coordinated policy when it comes to granting or denying an authorisation to the promoters of an offline poker tournament. In this regard there is very little doubt that clearer and more straightforward rules on poker will not just help the law enforcement authorities but also benefit the Italian market in terms of tournament promoters on the one hand, and players on the other by steering at long last poker sportivo out of the regulatory limbo it has featured so far.
Given the big success marked by the first online poker tournaments launched in Italy that at the end of 2008 and in only four months have already fetched nearly €240mln in total turnover, a bit more clarity regulation-wise in matters of online poker tournaments versus offline poker ones was not just appropriate but much needed too so as to enable the Italian authorities exploit and drive the poker-mania boom in a fair and balanced way.
Quirino Mancini, partner
Sinisi Ceschini Mancini
Qmancini@scm-partners.it
