Is online poker illegal?

Date 14 jan. 2009

Introduction

In a ruling of 17 November 2008, the Eastern High Court established that playing poker online is illegal. The ruling is a consequence of a ruling of 18 December 2007 (printed in the magazine Ugeskrift for Retsvæsen U2008.219Ø) which established that poker is gambling. 

 

The ruling of 17 November 2008 explicitly decided on whether a person playing poker on the Internet may be considered to be plying a trade. However, if the two rulings are considered together there is a risk of a significantly wider criminalisation of online poker.

 

The case in brief

The defendant was unemployed. At his arrest, he was in possession of approximately DKK 240,000 in a plastic bag. According to his own explanation, he had won DKK 194,000 playing poker on the Internet. He had been playing from computers in his own apartment and in his friends’ apartment in Denmark.

 

Based on the above, the High Court decided on whether the defendant, by playing poker online, could be considered to have been plying a trade by gambling contrary to Section 203 of Danish Criminal Code. 

 

The former legal basis

As a starting point, organising of and participation in gambling is legal without specific permission. However, this does not apply (i) to people who are considered plying a trade by unauthorised gambling, cf. Section 203 of the Danish Criminal Code or (ii) if unauthorised gambling takes place in a public place, cf. Section 204 of the Danish Criminal Code.

 

Gambling

Games about money, the outcome of which is not determined by the player’s abilities or experiences but fully or almost fully on coincidence, are considered gambling. Furthermore, emphasis may be put on whether the game in question, to a particular degree, tempts inexperienced players to play in the hope of fortuitous winnings.

 

Certain other kinds of games, including lottery, the pools and bingo, fall outside the scope of the definitions of gambling in Section 203 and 204 of the Danish Criminal Code and the legal position regarding these games is regulated in special legislation.

 

As regards poker, it has been determined that both tournament poker and ordinary poker must be considered gambling, cf. The Supreme Court’s ruling printed in Ugeskrift for Retsvæsen (Weekly Journal of Law) (U1950.1016H) in which poker in general was considered gambling. More specifically, the poker game Tennessee-Hold-em was considered gambling in U1975.484 and most recently, in U2008.809Ø, the Eastern High Court found that the poker game Texas Hold-em was gambling, cf. U2008.809Ø. Thus, poker must be considered gambling, even though the latter ruling is presently under appeal in the Supreme Court.

 

“Plying a trade”

A player must be considered to be plying a trade by gambling, when he/she participates in the game for the winnings and with regular activity. The size of the winnings and whether the player has another job on the side is of no importance. Therefore, it has not been a decisive factor whether the earnings from the game in question has constituted a substantial part of the person’s income, cf. U1962.593Ø, where Section 203 was violated regardless of the fact that the income only constituted 2% of the defendants overall income.

 

The provision in Section 203, according to which a person may not ply a trade by gambling, has only been used towards organisers, bankers and the like until the ruling of the Eastern High Court on 17 November 2008. However, in principle, there is nothing to prevent that the provision is used on gamblers.

 

Public place

The provision states that illegal gambling in a public place is unlawful. Club premises are also considered a public place according to Section 204(2), if anyone or anyone of a certain class may normally be admitted in the club or illegal gambling is part of the club’s purpose or special payment is made for participation in the game.

 

The field of application of the provision is broad and is not limited to the facilities which are normally considered a public place. Playing poker in a private apartment has been found to be in contravention of Section 204, cf. U1950.911Ø. Approximately 60 people had access to the apartment twice a week for the purpose of gambling.

 

Case law has only decided on the provision’s application regarding gambling in physical environments, including club premises, according to Section 204(2). The question of whether it is possible for a third party to easily gain access to participation in the activities or the club is a closed assembly has been decisive. In U2008.219Ø participation was conditional upon membership of the club arranging the activity. However, the games were considered public (taking place in a public place) in that anyone could become members and the club only demanded for a short-term membership (24 hours) in order for the player to participate in the games.

 

The term public place must be considered in the light of the purpose of Sections 203 and 204 which is to prevent easily impressionable people from getting into contact with the games. Overall, it doesn’t take much, for a place to be considered public.

 

The ruling of the High Court

The High Court determined that poker had to be considered gambling and that the defendant should be considered to have been plying a trade by gambling, because he had earned an income playing during a period of time. In that the defendant had won the money through his actions on a computer in this country, Section 203 of the Criminal Code had been violated.

 

It was decisive that the gaming had taken place on a computer in this country and the fact that the defendant had been playing at websites of foreign countries in which such gambling may be allowed did not lead to a different result.

 

As a consequence hereof, the defendant was fined ten daily penalties of DKK 500, cf. Section 203(1), just as DKK 194,000 were confiscated in accordance with Section 203(2).

 

The importance of the ruling to online poker

For the first time, the Eastern High Court has applied the terms “plying a trade” and “gambling” to online poker. Where the ruling only decides on the term “plying a trade” in relation to Section 203, gambling is the same for both Section 203 and 204. To a certain degree, the ruling has clarified some of the uncertainties which prevailed after U2008.219Ø by determining that online poker must be considered gambling according to Section 203 and 204.

 

It is already a consequence of the ordinary local validity of the Criminal Code that the provisions apply to games played on computers in Denmark. According to Section 6(1) no. 1, actions performed in Denmark are covered by the Criminal Code and according to Section 9(1), 1 link, actions must be considered performed at the location at which the offender found himself when performing the action.

 

The consequences involved for online poker players staying in Denmark and players who have earned profits from playing outside Denmark, will be described below.

 

The importance to poker players in Denmark

The ruling has determined that also online poker must be considered gambling and that the provision also applies to private persons playing from computers in Denmark, regardless of whether the game takes place on foreign servers.

 

Based upon the ruling, the present legal position must be that players playing online poker for winnings from computers in Denmark are potentially breaking the law. As mentioned above, it is decisive that the gaming takes place regularly. Thus, it may not be assumed that the High Court only attached importance to the fact that the defendant was unemployed and therefore based his income on the games. As the application of the provision does not require the amount won to constitute a significant part of the person’s income, any poker player who is regularly active and plays for winnings will be acting against Section 203.

 

Even though the ruling has determined that online poker is gambling, it has not yet been decided if online poker must be considered held in a public place pursuant to Section 204. As mentioned earlier, this will be the case according to practice when it is possible for a third party to easily gain access to participation in the games. To the extent that the game is played on a website which is publicly available (that is, not encrypted with a password) and participation in the game only requires registration, this will undoubtedly be the case.

 

Thus, it will be in contravention of Section 204 to initiate or participate in online poker games from a computer placed in Denmark.  Since “the defendant [had] performed his actions by using a computer in this country” the result could be no different than “the defendant [had been] playing online poker in countries where such game could possibly be legal”.

 

If the game is protected by, for example, a password or another such arrangement, against third party participation and if only a small charmed circle is allowed access, the game will not be considered public. It is decisive whether or not participation in the game is reserved a small circle of people who know each other. Participation in such closed game will, however, only be legal to the extent that the activity does not occur regularly. Under such circumstances, it may be difficult to establish a website with a password and later satisfy the burden of proof for claiming that it is not for regular use.

 

In other words, the ruling entails that online poker in large internet game sites where you only need to register to be able to participate will be illegal for persons staying in Denmark. As it must be assumed, that most of the online poker played in Denmark takes place on such websites, the ruling entails a very broad criminalisation.

 

Consequences for Danes playing online poker in foreign countries

As a starting point, only actions performed in Danish territory may be penalised in Denmark, cf. Section 6 of the Criminal Code, unless the action is illegal in Denmark as well as the foreign territory on which it was performed, cf. Section 8(1), no. 6. As a rule, Danes staying abroad may not be punished in Denmark for having been playing online poker.

 

As a consequence of Section 9(2), an action of which the possibility of punishment depends on a result, may also be considered performed at the place where the result of the action occurs. If the very possession of winnings earned by playing online poker was illegal pursuant to Sections 203 and 204, poker players, under certain circumstances, would risk having their winnings confiscated as they return to Denmark. However, this is not the case, in that the crime content of Section 203 is plying a trade while Section 204 criminalises the person participating in the game. The possession of the winnings is not in itself illegal.

 

Therefore, Danish players who won money playing online poker abroad do not have to fear a punishment such as a fine or confiscation when returning to Denmark.

 

The importance of the ruling to online gambling in general

As mentioned above, the ruling has established that also gambling online may be illegal and that also private players may be considered to be plying a trade by playing poker online. Furthermore, it is clear that it is of no importance to the legality of the game whether the server on which the game is played is situated abroad.

 

As it has now been established that the ordinary rules applying to gambling also apply to online games, the legal position concerning online poker described above will in a way apply to all online gambling. Pursuant to Section 203, this entails that players staying in Denmark may not legally participate in gambling held at the Internet without special limitations as regards the circle of participants. Moreover, it will be illegal to earn a regular income from gambling online even if the game is played in a small private group.

 

Conclusion

As a consequence of the ruling, it may be said in conclusion that online gambling, including online poker, from a computer in Denmark is covered by Sections 203 and 204 of the Criminal Code. Furthermore, a consequence of the ruling is that private players may be considered plying a trade by gambling.

 

Presently, the legal position is such that persons staying in Denmark may not legally participate in online gambling unless the game is played in a way that restricts the circle of participants to a small private group. Danish players participating in online gambling held under such circumstances, however, will be acting contrary to the law if they earn a regular income from gambling.

 

As mentioned above, the present legal position is first and foremost a result of the ruling of 17 November 2008 and the Eastern High Court’s ruling of 18 December 2007 (U2008.809Ø), respectively. The latter verdict is presently under appeal to the High Court which has the possibility of finally determining the legal position of online poker. If the High Court determines that online poker should not be considered gambling it will be legal to hold and participate in online poker. Any reversal of U2008.809Ø will not change the rules applying to online gambling in general described above.

 

Danes staying in a country in which a game that is illegal in Denmark is legal, may not be punished for participating or winning herein, regardless of the result of the abovementioned appeal.

 

In conclusion, it may be mentioned that the government’s legal programme for 2009 within the Minister of Justice’s field contains suggestions for the establishment of a committee with a view to examining if certain types of gambling should be legalised. It may be assumed, that online poker is encompassed by such examination.

 

If you have questions for the ruling or require additional information on the rules on online poker and gambling on the Internet, please contact attorney Dan Moalem (dmo@mwblaw.dk).

 

The above does not constitute legal counselling, and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.