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12-3720
UNITED STATES OF AMERICA,

To Be Argued By: NATHAN D. REILLY

United States Court of Appeals

For the Second Circuit Appellant,

d
against LAWRENCE DICRISTINA,

Defendant-Appellee, STEFANO LOMBARDO, also known as MITZIE, Defendant.

On Appeal From The United States District Court For The Eastern District of New York

BRIEF AND SPECIAL APPENDIX FOR THE UNITED STATES

LORETTA E. LYNCH, United States Attorney, Eastern District of New York. DAVID C. JAMES, MARISA MEGUR SEIFAN, NATHAN D. REILLY, Assistant United States Attorneys, Of Counsel.

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i TABLE OF CONTENTS Page TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . iii PRELIMINARY STATEMENT.. . . . . . . . . . . . . . . . . . . . . 2 JURISDICTIONAL STATEMENT. . . . . . . . . . . . . . . . . . . . 2 QUESTION PRESENTED. . . . . . . . . . . . . . . . . . . . . . . 2 STATEMENT OF THE CASE.. . . . . . . . . . . . . . . . . . . . . 3 STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . 4 A. B. C. D. The Motion to Dismiss and the Daubert Hearing.. . . . 4 Trial.. . . . . . . . . . . . . . . . . . . . . . . . 6 Post-Trial Briefing and Proceedings.. . . . . . . . . 7 The Memorandum and Order. . . . . . . . . . . . . . . 9 13 14 14 14 14 14 16 18 22 29 33

SUMMARY OF ARGUMENT.. . . . . . . . . . . . . . . . . . . . . ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . THE DISTRICT COURT ERRED IN GRANTING DICRISTINAS MOTION. . . . . . . . . . . . . . . . . A. Legal Standards.. . . . . . . . . . . . . . . . . . 1. 2. B. C. Standard of Review.. . . . . . . . . . . . . . Statutory Scheme.. . . . . . . . . . . . . . .

1955(b)(2) Does Not Define Gambling for Purposes of the IGBA. . . . . . . . . . . . . . The District Courts Definition of Gambling Is Unduly Narrow.. . . . . . . . . . . . 1. 2. 3. Legislative History. . . . . . . . . . . . . . Sports Betting.. . . . . . . . . . . . . . . . Other Federal Statutes.. . . . . . . . . . . .

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ii C. The Interpretative Aids Invoked by the District Court Do Not Support its Definition of Gambling.. . . . . . . . . . . . . . . . . . . 1. 2. 3. The Rule of Lenity.. . . . . . . . . . . . . . Common Law.. . . . . . . . . . . . . . . . . . Ejusdem Generis. . . . . . . . . . . . . . . .

35 35 38 40 43

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . .

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iii TABLE OF AUTHORITIES CASES Abbott v. United States, 131 S. Ct. 18 (2010). . . . . . . . . . . . . . . . . . . . 35 In re Advisory Opinion to the Governor, 856 A.2d 320 (R.I. 2004). . . . . . . . . . . . . . . . . . 26 Ali v. Fed. Bureau of Prisons, 552 U.S. 214 (2008).. . . . . . . . . . . . . . . . . . . . 42 Barber v. Thomas, 130 S. Ct. 2499 (2010). . . . . . . . . . . . . . . . . . . 35 CSX Transp., Inc. v. Alabama Dept. of Revenue, 131 S. Ct. 1101 (2011). . . . . . . . . . . . . . . . . . . 40 City of New York v. Permanent Mission of India to United Nations, 618 F.3d 172 (2d Cir. 2010).. . . . . . . . . . . . . . 41, 42 Commonwealth v. Dent, 992 A.2d 190 (Pa. Super. 2010). . . . . . . . . . . . . . . 26 Cooper Distrib. Co. v. Amana Refrig., Inc., 63 F.3d 262 (3d Cir. 1995). . . . . . . . . . . . . . . . . 41 DePierre v. United States, 131 S. Ct. 2225 (2011). . . . . . . . . . . . . . . . . . . 35 Duncan v. Walker, 533 U.S. 167 (2001).. . . . . . . . . . . . . . . . . . . . 11 Emerson v. Townsend, 73 Md. 224 (1890).. . . . . . . . . . . . . . . . . . . . . 26 Garono v. State, 524 N.E.2d 496 (Ohio 1988). . . . . . . . . . . . . . . . . 26 Garrett v. Alabama, 963 So. 2d 700 (Ala. Crim. App. 2007).. . . . . . . . . . . 26 Ianelli v. United States, 420 U.S. 770 (1975).. . . . . . . . . . . . . . . . . . . . 27 Joker Club LLC v. Hardid, 643 S.E.2d 626 (N.C. Ct. App. 2007).. . . . . . . . . . . . 26

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iv Jones v. United States, 526 U.S. 227 (1999).. . . . . . . . . . . . . . . . . . . . 33 Liparota v. United States, 471 U.S. 419 (1985).. . . . . . . . . . . . . . . . . . 36, 38 Muscarello v. United States, 524 U.S. 125 (1998).. . . . . . . . . . . . . . . . . . . . 36 People v. Mitchell, 444 N.E.2d 1153 (Ill. App. Ct. 1983). . . . . . . . . . . . 26 People v. Turner, 629 N.Y.S.2d 661 (N.Y. Crim. Ct. 1995). . . . . . . . . . . 26 Ramirez v. City Demonstration Agency, 549 F.2d 97 (9th Cir. 1976).. . . . . . . . . . . . . . . . 41 Smith v. United States, 508 U.S. 223 (1993).. . . . . . . . . . . . . . . . . . . . 29 State ex rel Schillberg v. Barnet, 488 P.2d 255 (Wash. 1971).. . . . . . . . . . . . . . . . . 26 State v. Duci, 151 Ariz. 263 (1986). . . . . . . . . . . . . . . . . . . . 26 State v. Schlein, 253 Kan. 205 (1993).. . . . . . . . . . . . . . . . . . . . 26 Taniguchi v. Kan Pacific Saipan, Ltd., 132 S. Ct. 1997 (2012). . . . . . . . . . . . . . . . . . . 18 Town of Mount Pleasant v. Chimento, 2012 WL 5870814 (S.C. Nov. 21, 2012). . . . . . . . 21, 26, 39 Union Bank v. Wolas, 502 U.S. 151 (1991).. . . . . . . . . . . . . . . . . . . . 29 United States v. Aguilar, 515 U.S. 593 (1995).. . . . . . . . . . . . . . . . . . . . 40 United States v. Angiulo, 897 F.2d 1169 (1st Cir. 1990).. . . . . . . . . . . . . . . 18 United States v. Aquino, 336 F. Supp. 737 (E.D. Mich. 1972). . . . . . . . . . . . . 24

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v United States v. Atiyeh, 402 F.3d 354 (3d Cir. 2005).. . . . . . . . . . . . . . 10, 17 United States v. DiCristina, __ F. Supp. 2d __, 2012 WL 3573895 (E.D.N.Y. 2012). . . passim United States v. Farris, 624 F.2d 890 (9th Cir. 1980). . . . . . . . . . . . . . . . 24 United States v. Gotti, 459 F.3d 296 (2d Cir. 2006).. . . . . . . . 10, 13, 17, 20, 21 United States v. Harris, 959 F.2d 246 (D.C. Cir. 1992).. . . . . . . . . . . . . . . 29 United States v. Hunter, 478 F.2d 1019 (7th Cir. 1973).. . . . . . . . . . . . . . . 18 United States v. Kaczowski, 114 F. Supp. 2d 143 (W.D.N.Y. 2000).. . . . . . . . . . . . 18 United States v. Migi, 329 F.3d 1085 (9th Cir. 2003).. . . . . . . . . . . . . . . 41 United States v. Mine Workers, 330 U.S. 258 (1947).. . . . . . . . . . . . . . . . . . . . 33 United States v. Reitano, 862 F.2d 982 (2d Cir. 1988).. . . . . . . . . . . . . . . . 18 United States v. Rieger, 942 F.2d 230 (3d Cir. 1990).. . . . . . . . . . . . . . . . 17 United States v. Roselli, 432 F.2d 879 (9th Cir. 1970). . . . . . . . . . . . . . . . 29 United States v. Sacco, 491 F.2d 995 (9th Cir. 1974). . . . . . . . . . . . . . . . 23 United States v. Stewart, 590 F.3d 93 (2d Cir. 2009). . . . . . . . . . . . . . . . . 14 United States v. Tarter, 522 F.2d 520 (6th Cir. 1975). . . . . . . . . . . . . . . . 17 United States v. Useni, 516 F.3d 634 (7th Cir. 2008). . . . . . . . . . . . . . . . 18

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vi United States v. Velastegui, 199 F.3d 590 (1999).. . . . . . . . . . . . . . . . . . . . 36 Utsler v. Territory, 10 Okla. 463 (1900).. . . . . . . . . . . . . . . . . . . . 39 STATUTES 18 U.S.C. 1955. . . . . . . . . . . . . . . . . . . . . passim 35 20 26 26 26 26 20 26 26 20 34 26 20 20

25 U.S.C. 2703. . . . . . . . . . . . . . . . . . . . . . . Ariz. Rev. Stat. 13-3301. . . . . . . . . . . . . . . . . . Ark. Code 5-66-112. . . . . . . . . . . . . . . . . . . . . Cal. Pen. Code 337j.. . . . . . . . . . . . . . . . . . . . Conn. Gen Stat. 53-278a.. . . . . . . . . . . . . . . . . . Fla. Stat. 849.085. . . . . . . . . . . . . . . . . . . . . Haw. Rev. Stat. 712-1220. . . . . . . . . . . . . . . . . . Idaho Code 18-3801. . . . . . . . . . . . . . . . . . . . . Idaho Const. Art III 20(2). . . . . . . . . . . . . . . . . 720 Ill. Comp. Stat. 5/28-1.. . . . . . . . . . . . . . . . Indian Gambling Regulatory Act, 25 U.S.C. 2701, et seq.,. . . . . . . . . . . . . . . . . Iowa Code 99B.11. . . . . . . . . . . . . . . . . . . . . . La. Rev. Stat. Ann. 14:90.. . . . . . . . . . . . . . . . . N.J. Stat. Ann. 2C:37-1.. . . . . . . . . . . . . . . . . . N.Y. Penal Law 225.00.. . . . . . . . . . . . . . .

15, 16, 20

National Gambling Impact Study Commission Act Pub. L. No. 104-169, 110 Stat. 1482 (1996) (codified at 18 U.S.C. 1955 notes). . . . . . . . . .

33, 34 26

Okla. Stat. 21 941. . . . . . . . . . . . . . . . . . . . .

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vii Or. Rev. Stat. 167.117. . . . . . . . . . . . . . . . . 20, 26 24 33 26 26

Pub. L. No. 91-452, 84 Stat. 922 (1970).. . . . . . . . . . . Pub. L. No. 104-169, 110 Stat. 1482 (1996). . . . . . . . . . Tenn. Code Ann. 39-17-501.. . . . . . . . . . . . . . . . . Wis. Const. Art IV, 24(6)(c). . . . . . . . . . . . . . . . LEGISLATIVE MATERIALS 116 Cong. Rec. 590 (daily ed. Jan. 21, 1970). . . . . . . . . 116 Cong. Rec. 591 (daily ed. Jan. 21, 1970). . . . . . . . . 116 Cong. Rec. 601 (daily ed. Jan. 21, 1970). . . . . . . . . 116 Cong. Rec. 604 (daily ed. Jan. 21, 1970). . . . . . . . . Hearing on S.30 and Related Bills before Subcomm. No. 5 of the H. Comm. on the Judiciary, 91st Cong. 2d Sess. (May 21, 1970).. . . . . . . . . . . . Illegal Gambling Business Control Act of 1969, S. 2022, 91st Cong., 1st Sess. 201. . . . . . . . . . . . Report of the Senate Judiciary Committee, S. Rep. No. 91-617, 91st Cong., 1st Sess. (Dec. 18 1969).. MISCELLANEOUS American Heritage Dictionary of the English Language (1st ed. 1969). . . . . . . . . . . . . . . . . . . . . . 19 Blacks Law Dictionary (9th ed. 2009).. . . . . . . . . . . .

27 25 25 24

25 22 27

18

Anthony Cabot & Robert Hannum, Poker: Public Policy, Law, Mathematics, and the Future of an American Tradition, 22 T.M. Cooley L. Rev. 443 (2005).. . . . . . . . . . . . . 38 Garrett Downing, Career Sports Bettors Battle the Betting Line, Las Vegas Sun, Mar. 30, 2009. . . . . . 30, 32

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viii The Gambler, 60 Minutes (CBS television broadcast Jan. 16, 2011).. . . . . . . 31, 32 28 39

Anthony Holden, Bigger Deal: A Year Inside the Poker Boom (2007). . . . . . . . . . . . . . . . . . . . . . . . . . . James McManus, Cowboys Full: The Story of Poker (2009). . . .

Merriam-Webster Online Dictionary (July 27, 2012).. . . . . 39-40 Office of the Attorney General of the State of New York, Formal Opinion No. 84-F1, N.Y., Op. Att'y Gen. (1984). . . President's Commission on Law Enforcement & Administration of Justice, The Challenge of Crime in a Free Society 30

(1967).. . . . .

27 21 19 30 19 19

Roget's International Thesaurus (3d ed. 1962).. . . . . . . . The Random House College Dictionary (rev. ed. 1980). . . . .

Scott Van Voorhis, Profs Back Online Poker, Boston Herald, Oct. 22, 2007.. . . . . . . . . . . . . . . Webster's New Collegiate Dictionary (1976).. . . . . . . . .

Webster's Third New International Dictionary (1966).. . . . .

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UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Docket No. 12-3720 UNITED STATES OF AMERICA, Appellant, - against LAWRENCE DICRISTINA, Defendant-Appellee. STEFANO LOMBARDO, also known as MITZIE, Defendant. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK

BRIEF FOR THE UNITED STATES

PRELIMINARY STATEMENT The United States appeals from a Memorandum, Order and Judgment entered August 21, 2012 in the United States District Court for the Eastern District of New York (Weinstein, J.), which granted the motion of the Defendant-Appellee Lawrence DiCristina to dismiss the second superseding indictment and vacated DiCristinas conviction for operating and conspiring to operate an illegal poker club, in violation of 18 U.S.C. 1955 and 371. See United States

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2 v. DiCristina, __ F. Supp. 2d __, 2012 WL 3573895 (E.D.N.Y. 2012). JURISDICTIONAL STATEMENT The jurisdiction of this Court is invoked pursuant to 18 U.S.C. 3731. 18 U.S.C. 3231. 19, 2012. QUESTION PRESENTED Whether the district court erred in ruling that wagering on poker is not a form of gambling for purposes of the Illegal Gambling Business Act (IGBA), 18 U.S.C. 1955. The district court had jurisdiction pursuant Timely notice of appeal was filed on September

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3 STATEMENT OF THE CASE On December 9, 2011, a grand jury sitting in the Eastern District of New York returned a two-count second superseding indictment against DiCristina and Stefano Lombardo. 15).1 (GA 4, 10-

The defendants were charged with operating and conspiring to

operate an illegal poker club, in violation of 18 U.S.C. 1955 and 371. Lombardo and DiCristina both pleaded guilty on December 12, 2011. Lombardo was sentenced to four years of probation. On

May 1, 2012, DiCristina was permitted to withdraw his guilty plea. Jury selection was set for July 2, 2012 and a trial date was set for July 9, 2012. On June 29, 2012, DiCristina moved to dismiss

the second superseding indictment on the grounds, inter alia, that poker did not constitute gambling under the IGBA. district court reserved decision on the motion. On July 12, 2012, the jury found DiCristina guilty on both counts. After the verdict was returned, DiCristina renewed (GA 5). The

his motion to dismiss the second superseding indictment in the form of a motion for a judgment of acquittal. (GA 7). Following

additional briefing, on August 21, 2012, the district court issued a Memorandum, Order and Judgment which dismissed the second

superseding indictment and vacated DiCristinas conviction.

GA, SPA and T refer to the governments appendix, the special appendix and the trial transcript, respectively. DE refers to entries on the district courts docket sheet.

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4 STATEMENT OF FACTS The charges against DiCristina arose from his operation of an illegal poker game in a warehouse in Staten Island, New York between December 2009 and May 2010. A. The Motion to Dismiss and the Daubert Hearing On June 29, 2012, DiCristina moved to dismiss the second superseding indictment on the grounds that (a) the government must prove not only that the defendants poker business was an illegal gambling operation under New York State law but also that poker falls within the IGBAs definition of gambling; and that

(b) poker did not constitute gambling as defined in the IGBA. (GA 7). amicus On July 3, 2012, the Poker Players Alliance filed an brief in support of DiCristinas motion to dismiss.

(DE 74).

In addition, DiCristina moved to qualify Randal Heeb,

Ph.D., an econometrician and accomplished poker player, as an expert to testify at trial. On July 5, 2012, the government filed its response to the defendants motion to dismiss and moved to preclude the testimony of Dr. Heeb. (DE 76). The defendant filed a reply to the (DE 78).

governments motion on July 6, 2012.

On July 6, 2012, the court held a Daubert hearing in which Dr. Heeb, who was then participating in a poker tournament in Las Vegas, Nevada, testified by video conference. Dr. Heeb

recounted the results of a study he had performed of 415 million

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5 hands of No-Limit Texas Holdem poker (the same variety of poker played at DiCristinas club) that had been played on the Internet. (GA 109-10, 136). Based upon that analysis, Dr. Heeb concluded (GA 113). His

that skill predominates over chance in poker. study involved two principal analyses.

First, Dr. Heeb found that

players who were more successful (i.e., won more money) betting with a particular combination of cards were also more successful betting with other combinations of cards. (GA 119-21). Second, he used a regression analysis to construct a skill index for one group of poker players and found that it correctly predicted the results achieved by a second group of players. (GA 126-28). He

also determined that, the more hands of poker that are played, the more often skilled players predominated over unskilled players. (GA 128-30). Specifically, he found that, after 900 hands of poker (equivalent to approximately 30 hours of play (GA 339)), the more skilled players achieved more successful results than the less skilled players 90 percent of the time. (GA 129, 140). Dr. Heeb

testified that his results were consistent with other published studies. (GA 135-36). He concluded that poker fell on a continuum

between pure games of skill, such as chess, and pure games of chance, such as roulette. (GA 139-40).

On cross-examination, Dr. Heeb acknowledged that a more skilled poker player could lose a hand to a less skilled player even when the odds favored the more skilled player. (GA 152-53).

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6 He conceded that poker definitely is a game which has an element of chance. (GA 153). He also acknowledged that his opinion about

the role of skill in poker depended upon playing a large number of hands, such as in a tournament, while informal cash games had no minimum number of hands and players in such games could leave whenever they wanted. (GA 161-62). Thus, in a cash game, a less

skilled but lucky player could leave the game after winning a hand and come out ahead of a more skilled player. (GA 162-66).

At the conclusion of the hearing, the district court ruled that Dr. Heeb would not be permitted to testify at trial because whether poker constituted gambling under Section 1955 was a legal question for the court. The district court reserved (GA 178-79).

decision and the case proceeded to trial. B. Trial At trial, the government

presented

evidence

that

DiCristina operated a casino-style poker room out of a warehouse in Staten Island which also housed an electric-bicycle business that he owned. witnesses, The government presented testimony from two cooperating Joseph Monteleone and Deborah Berardi, who had

previously pleaded guilty to violations of the IGBA for their roles in running or working at illegal poker games. 171-87). (T 26-67, 144-54,

These witnesses testified about witnessing DiCristina The government also introduced the New York City Police Department

running the poker operations. testimony of an undercover

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7 detective who had gambled in DiCristinas game as well as

undercover video taken by the detective. In that video, DiCristina could be seen describing himself as the operator of the poker game and describing how long the game had been running. government introduced evidence seized, pursuant Finally, the to a search

warrant, from DiCristinas warehouse including playing cards, poker chips and gambling ledgers that reflected the amount that gamblers and the house made on a given night. During the trial, the jury was instructed that poker constituted gambling under the IGBA. (GA 205, 208). On July 11, After the

2012, the jury convicted the defendant on both counts.

verdict, the defendant renewed his motion to dismiss the second superseding indictment in the form of a motion for a judgment of acquittal. The court reserved decision on the defendants motion

pending the submission of additional briefing. C. Post-Trial Briefing and Proceedings On July 27, 2012, the government filed its response to the defendants motion for acquittal (DE 96) and on July 30, 2012, the defendant filed his reply. (DE 97). In its response, the The district

government sought leave to submit expert evidence. court granted this application. (DE 98). The

government filed

its expert report prior to the hearing which was held on August 10, 2012. (GA 221-47). At the hearing, the government called Dr. David DeRosa,

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8 a professor of financial engineering at Columbia University and owner of a consulting company that does research into capital markets. While acknowledging that player skill plays some role in

poker, he disputed Dr. Heebs conclusion that poker was more a game of skill than of chance. Among other things, he argued that skill

at poker should be defined as winning money, and yet Dr. Heebs analysis showed that almost all poker players lose money. (GA 25658). He also asserted that, under Dr. Heebs analysis, youve got to play a preposterous number of hands in order to have any confidence of winning and that, for players who played a smaller number of hands, chance was always a major factor. (GA 258-59).

As Dr. DeRosa observed, in poker theres no requirement that you have to play forever. to play all 18 holes. Its not like a game of golf where you have Its not like a game of tennis where you You can drop out any time you want.

have to play three sets. (GA 274).

Dr. DeRosa raised other challenges to Dr. Heebs

methodology and conclusions that need not be detailed because they are not at issue on this appeal. 63). (See, e.g., GA 234-36, 239, 260-

Dr. Heeb was also present at the hearing, and the court

permitted the two experts to engage in a lengthy dialogue with one another. (GA 316-55). On August 13, 2012, DiCristina submitted a supplemental expert report (GA 358-68), and on August 17, 2012, DiCristina filed the legislative history for the IGBA at the request of the court

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9 (DE 106). On August 17, 2012, expert the government (GA responded and to the

DiCristinas

supplemental

report

369-81)

defendant replied on August 20, 2012 (GA 382-89). D. The Memorandum and Order In his papers, DiCristina contended that the IGBA limits the types of gambling businesses that are illegal under federal law to those that not only are illegal under state law but also involve activities that are similar to the nine games listed in subsection (b)(2) of the IGBA.2 as similar to the DiCristina further contended that to qualify enumerated activities, the games must be

predominated by chance and be housebanked.

He concluded that

because poker is neither, his conduct did not violate the IGBA. On the other hand, the government argued that the plain language of the statute does not limit the types of activities that are prohibited beyond the requirement that the gambling business violates state gambling law. Further, even assuming that

subsection (b)(2) of the IGBA creates an independent element of the statute that must be satisfied, poker is gambling as contemplated by that subsection. Specifically, the government argued that poker constitutes a game of chance because, while the skill of a player may influence the outcome of a given hand, the outcome of the bets that poker players make on the cards is principally governed by

Those games are pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games.

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10 events beyond the bettors poker control. many In this respect, with the

government

noted,

shares

similarities

sports

betting, conduct which is explicitly identified as gambling within the meaning of subsection (b)(2). On August 21, 2012, the district court issued a 120-page opinion that granted DiCristinas motion. (SPA 1-120). The court

extensively reviewed the history of the game of poker, the experts testimony on whether poker is predominately a game of chance or skill, case law, the legislative history, other reports pertaining to gambling and other federal gambling statutes. 92). The district court acknowledged that the Third Circuit had interpreted the IGBA consistently with the governments (SPA 11-53, 62-

position in United States v. Atiyeh, 402 F.3d 354, 372 (3d Cir. 2005). (SPA 92-94). However, the district court rejected this

decision as not persuasive because the Third Circuit did not have the benefit of the extensive briefing on the text and history of the IGBA available to this court. (SPA 93). The district

court also acknowledged that the overwhelming majority of cases have assumed, without analysis, that the government need only prove that the business involved gambling as defined by state law, not that the game operated constituted gambling as defined by the IGBA. (SPA 94-95). Among the cases that the court identified as

making this assumption was this Courts decision in United States

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11 v. Gotti, 459 F.3d 296, 340-42 (2d Cir. 2006). further acknowledged defendants that for IGBA had The district court been used to in

repeatedly games not

prosecute

operating

enumerated

1955(b)(2), including poker.

(SPA 95, 103-04).

The court opined that both the government and the defense had advanced plausible interpretations of 1955(b)(2) and that neither interpretation violated the cardinal principle of

statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant. (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)). (SPA 98) The court

further found that the legislative history did not clearly favor either partys interpretation. (SPA 99-100). Nevertheless,

applying the rule of lenity, the court adopted the defendants interpretation that 1955(b)(2) was intended to create a federal definition of gambling. (SPA 100-01).

The court noted that Congresss failure to include poker and other card games like pinochle, gin rummy, and bridge among the games listed in 1955(b)(2) was significant given that such games were so widely played by law-abiding individuals in noncriminal settings. (SPA 102). The court reasoned that, as a

result of the ambiguities in the federal definition of gambling, governing criteria must be derived by determining what common characteristics unifies the games listed in 1955(b)(2) into a

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12 cohesive group. (SPA 104-05).

It rejected the defendants contention that a relevant characteristic of the games listed in 1955(b)(2) was that they were housebanked, finding no evidence that Congress considered that factor. (SPA 109). However, relying on the alleged common-

law definition of gambling and on the statutory interpretation maxim of ejusdem generis, it agreed with the defendants contention that [i]n order to constitute an illegal gambling business under the IGBA, as at common law, the business must operate a game that is predominately a game of chance. (SPA 112).

Finally, the district court agreed with the defendants expert that poker was predominately a game of skill and held that the poker played on the defendants premises ... is not gambling as defined by the IGBA. (SPA 119). The court accordingly ordered

that the second superseding indictment be dismissed and that DiCristinas conviction be vacated.

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13 SUMMARY OF ARGUMENT The district court erred in granting DiCristinas motion. The court misinterpreted 18 U.S.C. 1955(b)(2) as creating a definition of gambling. In fact, the IGBA does not contain a

definition of gambling and that term should therefore be defined based upon its ordinary meaning, i.e., as wagering on an uncertain outcome. Moreover, even if gambling is defined as a game of

chance, that phrase should be given a broad and nontechnical meaning as used by this Court in United States v. Gotti, 459 F.3d 296, 340-42 (2d Cir. 2006), which meaning includes poker. That

conclusion is supported by the IGBAs legislative history, the inclusion of bookmaking as one of the activities expressly covered by the IGBA and by definitions of gambling in other federal statutes. The interpretative aids cited by the district court do not lead to a contrary result. The rule of lenity is inapplicable

because the statute is not sufficiently ambiguous and because the courts interpretation does not advance the purposes of the rule of lenity. The common law is not sufficiently uniform to support the Finally, the ejusdem generis maxim

district courts definition.

cannot properly be applied to 18 U.S.C. 1955(b)(2), and even if it could, it would not support the district courts interpretation.

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14 ARGUMENT THE DISTRICT COURT ERRED IN GRANTING DICRISTINAS MOTION In the district court, the parties disputed a range of issues raised by DiCristinas motion, including whether there is a federal definition of gambling at all under the IGBA and whether skill predominates over chance at poker. On this appeal, the

government seeks review of whether, even accepting that there is a federal definition of gambling under the IGBA and assuming for purposes of this appeal that skill predominates over chance at poker, poker nevertheless constitutes gambling under the IGBA. As set forth below, gambling for purposes of the IGBA should simply mean wagering on an uncertain outcome, and poker should be included within that definition. A. Legal Standards 1. Standard of Review The Court reviews a district courts legal conclusions, including those interpreting the meaning of a statute, de novo. See United States v. Stewart, 590 F.3d 93, 109 (2d Cir. 2009). 2. Statutory Scheme The IGBA makes it illegal to conduct[], finance[], manage[], supervise[], direct[], or own[] all or part of an illegal gambling business. 18 U.S.C. 1955(a). Subsection (b) provides

definitions of the relevant terms: (b) As used in this section --

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15 (1) illegal gambling business means a gambling business which -(i) is a violation of the law of a State or political subdivision in which it is conducted; (ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and (iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day. (2) gambling includes but is not limited to poolselling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein. (3) State means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States. Subsection (e) excludes from the statutes prohibitions any bingo game, lottery, or similar game of chance conducted by a tax-exempt organization (emphasis added). New York Penal Law 225.00(2) defines gambling as the staking or risking of something of value upon the outcome of a contest of chance ... upon an agreement or understanding that [the individual] will receive something of value in the event of a certain outcome. A contest of chance is defined as a game ...

in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also

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16 be a factor therein. N.Y. Penal Law 225.00(1). As the district

court recognized, poker qualifies as a contest of chance under these definitions. B. (SPA 6-7) (citing New York state cases).

1955(b)(2) Does Not Define Gambling for Purposes of the IGBA The district court looked to 1955(b)(2) to establish a

federal definition of gambling for purposes of the IGBA based upon the common characteristics that unif[y] the games listed in 1955(b)(2) into a cohesive group. (SPA 104-05). That

interpretation of 1955(b)(2) is untenable.

Subsection (b)(2)

merely contains a non-exhaustive list of examples of gambling activities introduced by the phrase includes but is not limited to. This language contrasts with the definition of illegal

gambling business in 1955(b)(1) and the definition of State in 1955(b)(3) both of which are prefaced by the verb means and set forth the characteristics of the term they are defining so as to exclude activities or entities that do not have the stated characteristics. Moreover, if Congress had intended to define gambling in 1955(b)(2) to mean a game of chance or a game where chance predominates over skill, it could easily have made such a

requirement express.

Significantly, 1955(e) expressly refers to

game[s] of chance conducted by charities in creating exceptions to the statute. Thus, Congress plainly knew how to include such

language in the statute when it wished to do so.

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17 For these reasons, 1955(b)(2) should not be interpreted to create a definition of gambling for the IGBA. To be sure, the

examples listed in 1955(b)(2) are relevant to the meaning of gambling for purposes of the IGBA because no definition of gambling that would exclude any of them could be correct. But they are

merely examples of gambling and should not be read to exclude other activities from the reach of the statute.3 Notably, the only court of appeals that has directly addressed the issue creates rejected a the defendants of argument gambling in that that that

1955(b)(2)

federal an

definition activity not

precludes

prosecution

for

listed

subsection.

See United States v. Atiyeh, 402 F.3d 354, 372 (3d

Cir. 2005) (holding that becoming a custodian of funds that were wagered or to be wagered, which was illegal under Pennsylvania law, could be prosecuted as an illegal gambling business under the IGBA). Other courts, including this one, have upheld convictions

under the IGBA for gambling activities not listed in 1955(b)(2), including poker. (2d Cir. 2006) See, e.g., United States v. Gotti, 459 F.3d 296 (operating electronic joker-poker machines);

United States v. Rieger, 942 F.2d 230 (3d Cir. 1990) (operating high stakes poker operation); United States v. Tarter, 522 F.2d 520

As explained in the section on the IGBAs legislative history, infra, these examples were included in the statute because they were games that Congress believed provided the most lucrative sources of gambling revenue for organized crime at the time the statute was passed.

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18 (6th Cir. 1975) (same); United States v. Angiulo, 897 F.2d 1169 (1st Cir. operation); 1990) (receiving profits from a high stakes poker

United States v. Reitano, 862 F.2d 982 (2d Cir. 1988)

(rough-and-tumble blackjack); United States v. Useni, 516 F.3d 634 (7th Cir. 2008) (bingo). Indeed, the district court cited no case

interpreting this 40-year-old statute, nor is the government aware of any, in which a court held that the government failed to prove an offense under the IGBA because the activity in question did not satisfy a purported definition of gambling in 1955(b)(2).4 C. The District Courts Definition of Gambling Is Unduly Narrow Where, as here, a term is not defined in a statute, it should be given its ordinary meaning. Taniguchi v. Kan Pacific As the district court

Saipan, Ltd., 132 S. Ct. 1997, 2002 (2012).

noted (SPA 60-61), dictionaries give varying definitions of the terms gamble and gambling. Some dictionaries broadly define

gambling as [t]he act of risking something of value, esp. money, for a chance to win a prize. Blacks Law Dictionary 748 (9th ed.

The district court cited two cases that implied that the government must prove that the business ran games that also constituted gambling as defined by the IGBA. (SPA 95) (citing United States v. Hunter, 478 F.2d 1019, 1021 n.2 (7th Cir. 1973), and United States v. Kaczowski, 114 F. Supp. 2d 143, 152 (W.D.N.Y. 2000)) (emphasis added). However, neither of these cases provided any analysis of the issue, and, as the district court itself apparently recognized, neither case actually held that the government could not show a violation of the IGBA unless the conduct violated a purported definition of gambling in 1955(b)(2).

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19 2009); see also, e.g., Websters New Collegiate Dictionary 471 (1976) (defining gamble as to bet on an uncertain outcome or to play a game for (as money or property).). Other dictionaries, however, also include as one alternative definition to play at any game of chance for stakes. 542 (rev. ed. 1980).5 However, it would read too much into the phrase game of chance in some dictionaries to interpret it with the kind of mathematical precision used by Dr. Heeb, in which the respective roles of chance and skill are determined by conducting A game of The Random House College Dictionary

sophisticated statistical analyses of voluminous data.

chance can simply mean a game where chance plays some role in the outcome, whether or not it predominates over skill. several state statutory definitions are consistent Indeed, with that

understanding.

For example, as noted before, New York defines a

contest of chance as a game ... in which the outcome depends in a material degree upon an element of chance, notwithstanding that

Dictionaries that the government has found that predate the enactment of the IGBA do not differ materially from the ones cited by the district court. See American Heritage Dictionary of the English Language 294 (1st ed. 1969) (defining gamble as 1.a. To wager; bet money on the outcome of a game, contest or other event. b. To play a game of chance.); 1 Websters Third New International Dictionary 932 (1966) (defining gamble as 1a: to play a game of chance for money or other stakes b: to wager money or other stakes on an uncertain outcome (as of a horse race or an athletic game) and gambling as 1: the act or practice of betting: the act of playing a game and consciously risking money or other stakes on its outcome).

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20 skill of the contestants may also be a factor therein. N.Y. Penal

Law 225.00(1). As the district court recognized, that definition includes poker. (SPA 6-7) (citing cases). Other state statutes

have similar definitions of game of chance6 or otherwise define gambling to include activities that involve some degree of chance, whether or not chance plays a predominant role in the outcome.7 This broader, nontechnical meaning of game of chance is consistent with this Courts decision in Gotti. In that case, a

defendant challenged his conviction under 1955 for conducting a gambling operation using electronic joker-poker machines.

Specifically, the defendant contended that joker-poker machines were not illegal gambling devices under New York law because, inter alia, the games in question were games of skill rather than

See, e.g., Haw. Rev. Stat. 712-1220(3) (Contest of chance means any contest, game, gaming scheme, or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.); N.J. Stat. 2C:37-1(a) (similar); Or. Rev. Stat. 167.117(6) (similar). See, e.g., Ariz. Rev. Stat. 13-3301(iv)(4) (Gambling or gamble means one act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill or a future contingent event ...); 720 Ill. Comp. Stat. 5/28-1(a)(1) (A person commits gambling when he ... [p]lays a game of chance or skill for money or other thing of value ...); La. Rev. Stat. 14:90(A)(1)(a) (Gambling is the intentional conducting, or directly assisting in the conducting, as a business, of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit.).
7

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21 contests of chance. the Court observed: [A] contest of chance encompasses games in which the skill of the contestants may play a role, as long as the outcome depends in a material degree on chance. [Defendant] concedes that the games in question had the theme of poker, and he has not contended in his brief that chance does not play a material role in the outcome of a poker game. Id. Thus, while the Gotti Court did not specifically address the 459 F.3d at 342. In rejecting this argument,

meaning of gambling under the IGBA, it did uphold a conviction under 1955 for engaging in a contest of chance in the face of the defendants claim that the outcome of the game was determined by skill rather than chance, ruling that it was sufficient that chance played a material role in the outcome. For the reasons set forth below, defining gambling to mean, in substance, betting on an uncertain outcome would be most consistent with the IGBAs purpose and legislative history. Cf.

Town of Mount Pleasant v. Chimento, 2012 WL 5870814, *5 (S.C. Nov. 21, 2012) (under South Carolina law, the meaning of gambling depends not on the skill/chance ratio, but on the wager.). But

even if the alternative, game of chance definition were adopted, it should not have a narrower or more technical meaning than this Court applied in Gotti. qualify as gambling. Using that definition, poker would also

(See SPA 61 (citing Rogets International

Thesaurus 514.7 (3d ed. 1962) (listing gamble, game of chance and poker as synonyms along with games specifically enumerated in

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22 1955(b)(2)). Indeed, even Dr. Heeb would probably agree. (See

GA 153 (Dr. Heeb testifies that poker definitely is a game which has an element of chance.)). 1. Legislative History The district court conceded that nothing in the

legislative history indicates that Congress ever considered the issue of chance predominating over skill in determining whether or not a particular game constitutes gambling. (SPA 69). The court

also acknowledged that the legislative history is devoid of a rationale as to why Congress would include a federal definition of gambling in Section 1955(b)(2). (SPA 67). Further, as the court explained, the concerns of members of Congress who questioned whether the statute would reach a friendly poker game were soothe[d] by others not on the basis that poker is not gambling, but because a friendly poker game would not meet the other

requirements of the statute.

(SPA 73-74).

Moreover, the evolution of the language of 1955(b)(2) suggests that Congress intentionally elected not to create a narrow definition of gambling. An early version of the bill stated that

illegal gambling business means betting, lottery, or numbers activity, which among other requirements, violates state law. (SPA 99 (citing Illegal Gambling Business Control Act of 1969, S. 2022, 91st Cong., 1st Sess. 201)). The bill that was finally

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23 enacted tellingly changed means to includes but is not limited to. Beyond these particular features, however, the

legislative history, viewed in a broader context, indicates that Congress intended the IGBA to assist in the enforcement of state gambling laws. combating Further, Congress was especially concerned with operations conducted by organized crime.

gambling

Neither of these interests would be served by interpreting the IGBA to create a narrow definition of gambling that would exclude a substantial number of activities that are commonly classified gambling by states, including poker. The IGBA, part of the Organized Crime Control Act, was intended to address Congresss finding that, where a state had outlawed a particular form of gambling, organized crime had developed presented. complex channels to capitalize on the opportunity

United States v. Sacco, 491 F.2d 995, 1000 (9th Cir. In enacting the IGBA,

1974) (discussing legislative history). Congress made the following findings:

(1) organized crime in the United States is a highly sophisticated, diversified, and widespread activity that annually drains billions of dollars from America's economy by unlawful conduct and the illegal use of force, fraud, and corruption; (2) organized crime derives a major portion of its power through money obtained from such illegal endeavors as syndicated gambling, loan sharking, the theft and fencing of property, the importation and distribution of narcotics and other dangerous drugs, and other forms of social exploitation;

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24 (3) this money and power are increasingly used to infiltrate and corrupt legitimate business and labor unions and to subvert and corrupt our democratic processes; (4) organized crime activities in the United States weaken the stability of the Nation's economic system, harm innocent investors and competing organizations, interfere with free competition, seriously burden interstate and foreign commerce, threaten the domestic security, and undermine the general welfare of the Nation and its citizens; . . . United States v. Aquino, 336 F. Supp. 737, 739 (E.D. Mich. 1972) (quoting Pub. L. No. 91-452, Oct. 15, 1970, 84 Stat. 922). The IGBA was designed to aid the enforcement of state law where the state had identified the gambling business as illegal while at the same time exempt[ing] from the federal statute the operators of gambling businesses that are not contrary to a states public policy on gambling. 624 F.2d 890, 892, 895 (9th Cir. 1980). The statements of the sponsors of the bill during Senator United States v. Farris,

congressional debates evidence this essential purpose.

Allott stated that the purpose of the statute is simply to make the Federal Government a more effective member of the established State-Federal law enforcement partnership which has long been waging a common war on organized crime and illegal gambling. 116

Cong. Rec. 604 (daily ed. Jan. 21, 1970) (statement of Sen. Allott). Additionally, Senator Hruska was among many Senators who

referenced President Nixons April 23, 1969 message on organized crime during debate on the Senate floor. President Nixon

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25 characterized the legislation as giving the Attorney General broad latitude to assist local and state government in cracking down on illegal gambling, the wellspring of organized crimes reservoir. See 116 Cong. Rec. 601 (daily ed. Jan. 21, 1970) (statement of Sen. Hruska). Senator McClellan, stated during discussion on the floor

that [the IGBA] would give the Federal Government two new means to aid the States in combating large-scale gambling. See 116 Cong.

Rec. 591 (daily ed. Jan. 21, 1970) (statement of Sen. McClellan). During a House Judiciary Committee hearing, Attorney General

Mitchell submitted a Department of Justice memorandum that stressed that the IGBA does not proscribe gambling which is legitimate under state law, nor does it prohibit lotteries and bingo games conducted for charitable purposes. The federal proposal will not

interfere with a States right to regulate the conduct of citizens within its jurisdiction. Hearing on S.30 and Related Bills before Subcomm. No. 5 of the H. Comm. on the Judiciary, 170, 91st Congress (2d Session) (May 21, 1970) (Statement of Attorney General

Mitchell). Notwithstanding the federal goal of supplementing state gambling enforcement efforts, the federal definition of gambling adopted by the district court would render the statute inapplicable to many gambling businesses that are illegal under state law. Further, the district courts specific ruling excluding poker from the coverage of the IGBA would render the federal definition of

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26 gambling inconsistent in this respect with the laws of numerous states that have either legislatively8 or judicially9 classified poker as a form of illegal gambling. The district court placed great emphasis on the fact that 1955(b)(2) does not include poker in the list of examples of gambling. (SPA 102-03). But this omission is readily explained by the statutes principal focus on addressing gambling activities

See, e.g., Ark. Code 5-66-112 (prohibiting card games, including poker), Cal. Pen. Code 337j(e)(1) (including poker in definition of controlled game, which is unlawful to operate without a license); Conn. Gen Stat. 53-278a(2) (including poker in definition of gambling); Fla. Stat. 849.085(2)(a) (gambling on poker not a crime when played for penny ante); Idaho Const. Art III 20(2) (state may not permit casino gambling, including poker); Idaho Code 18-3801 (including poker as gambling); Iowa Code 99B.11(3) (tournament exemption to gambling statute does not apply to poker); Ohio Revised Code 2915.01(D) and 2915.02(A)(2) (defining gambling to include poker, craps [or] roulette); Okla. Stat. 21 941 (poker included in definition of gambling); Or. Rev. Stat. 167.117(4) (poker a proscribed casino game); Tenn. Code Ann. 39-17-501, Sentencing Commission Comments (defining gambling to include poker); Wis. Const. Art IV, 24(6)(c) (poker is not exempt from state prohibition on gambling). See, e.g., Garrett v. Alabama, 963 So. 2d 700 (Ala. Crim. App. 2007) (poker covered by state gambling statute); State v. Duci, 151 Ariz. 263 (1986) (same); People v. Mitchell, 444 N.E.2d 1153, 1155 (Ill. App. Ct. 1983) (same); State v. Schlein, 253 Kan. 205, 305 (1993) (same); Emerson v. Townsend, 73 Md. 224 (1890) (money loaned for poker was loaned for gambling); People v. Turner, 629 N.Y.S. 2d 661, 662 (N.Y. Crim. Ct. 1995) (poker covered by state gambling statute); Joker Club LLC v. Hardid, 643 S.E.2d 626, 630-31 (N.C. Ct. App. 2007) (same); Garono v. State, 524 N.E.2d 496, 500 (Ohio 1988) (same); Commonwealth v. Dent, 992 A.2d 190, 196 (Pa. Super. 2010) (same); In re Advisory Opinion to the Governor, 856 A.2d 320, 328-329 (R.I. 2004) (same); Town of Mt. Pleasant v. Chimento, 2012 WL 5870814, *5 (S.C. Nov. 21, 2012) (same); State ex rel Schillberg v. Barnet, 488 P.2d 255, 258 (Wash. 1971) (same).
9

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27 that funded organized crime. See Ianelli v. United States, 420

U.S. 770, 787-88 (1975) (IGBA was enacted to give the Federal Government a new substantive weapon, a weapon which [would] strike at organized crimes principal source of revenue: illegal

gambling.) (quoting S. Rep. No. 91-617 at 71 (1969)). When Congress enacted the IGBA in 1970, organized crime derived its illegal gambling revenue primarily from lotteries, dice games and wagering on the outcomes of horse races and sporting events. See 116 Cong. Rec. 590 (daily ed. Jan. 21, 1970)

(statement of Sen. McClellan) (identifying numbers, betting on horse racing, sporting events, lotteries, dice games, and illegal casinos as important forms of syndicated gambling); see also Organized Crime Control: Hearings Before Subcomm. No. 5 of the H. Comm. on the Judiciary, 91st Cong. 105 (1970) (Statement of Sen. McClellan) (The directors and managers of the major numbers, booking, and sports gambling operations across the country are, of course, the same Mafia leaders who engage in extortion, labor racketeering, corruption of legitimate business, and the panoply of other illegitimate enterprises which support organized crime.); Presidents Commission on Law Enforcement & Administration of Justice, The Challenge of Crime in a Free Society 188 (1967) (noting that organized crime profited from lotteries, such as numbers or bolita, to off-track horse betting, bets on sporting events, large dice games and illegal casinos.). Thus, in

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28 1955(b)(2), Congress enumerated the gambling activities that presented law enforcement with its most pressing challenges related to organized crime at that time. By contrast, poker was far less popular in 1970, when the IGBA was enacted, than it is today. Pokers surge in popularity,

often called the poker boom, is a relatively recent phenomenon that reached its apex between 2003 and 2006. Anthony Holden, The release of

Bigger Deal: A Year Inside the Poker Boom 1 (2007).

the popular film Rounders in 1998 garnered some public exposure and interest in poker, but by far the most important catalyst for the poker boom was the emergence of the Internet, which allowed for online poker-playing, and cable television, which frequently

broadcast poker tournaments.

Id. at 1, 10.

Both forms of media

facilitated the explosion of pokers popularity within a matter of years. The World Series of Poker, perhaps the most prestigious

poker tournament in the United States, provides a useful indication of the rapid growth in pokers popularity. When the tournament

began in 1978, 42 players participated; by 1988, this number had grown to 167. Id. at 1. In 2006, by contrast, 8,773 players

entered the main event alone, and more than 44,500 players participated in the tournament at large. Id.

Not surprisingly, as the district court observed, in the pre-poker-boom years when the IGBA was being enacted, Mafia involvement in poker games was limited. (SPA 73) (citing United

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29 States v. Roselli, 432 F.2d 879, 886 n.8 (9th Cir. 1970) (noting that poker is not traditionally associated with organized

crime)).

However, that has changed.

The surge in pokers

popularity has created lucrative opportunities for organized crime syndicates and other criminal actors. Indeed, the district court

itself detailed organized crimes growing involvement in poker games following the enactment of the IGBA. (SPA 76-77).

That Congress in 1970 did not foresee the poker boom or the increased revenue the game now provides to organized crime does not mean that poker is not covered by the IGBA. A statute can

reach beyond the specific situation that Congress envisioned in drafting it if the statutory language is broad enough. See Smith

v. United States, 508 U.S. 223, 239 (1993) (citing United States v. Harris, 959 F.2d 246, 262 (D.C. Cir. 1992)); Union Bank v. Wolas, 502 U.S. 151, 157-58 (1991). It is thus especially significant

that Congress deliberately chose open-ended language in drafting 1955(b)(2) when it provided that gambling includes but is not limited to the enumerated activities. Congress could not have

intended merely to shunt organized crimes revenue raising into poker and other games not expressly mentioned in 1955(b)(2). 2. Sports Betting The district courts definition of gambling as an

activity in which chance predominates over skill is also flawed because it would exclude an activity that clearly is covered by the

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30 IGBA. In particular, sports betting (bookmaking), one of the activities enumerated by 1955(b)(2), involves

gambling

substantial (not slight) skill, including the exercise of [a] bettors judgment in trying to ... figure [out] the point spreads. Office of the Attorney General of the State of New York, Formal Opinion No. 84-F1, N.Y. Op. Atty. Gen. 11 (1984). Sports bettors

can employ superior knowledge of the games, teams and players in order to exploit odds that do not reflect the true likelihoods of the possible outcomes. See Garrett Downing, Career Sports Bettors Battle the Betting Line, Las Vegas Sun, Mar. 30, 2009 (available at http://www.lasvegassun.com/news/2009/mar/30/career-sports-

bettors-battle-betting-line/) (describing research and analysis conducted by professional sports bettors). Indeed, academics who

have argued that poker should not be treated as a form of illegal gambling on the ground that it is a game of skill make the same argument regarding sports betting. See, e.g., Scott Van Voorhis,

Profs Back Online Poker, Boston Herald, Oct. 22, 2007 (available at 2007 WLNR 20766706) (Like [Professor Charles] Nesson,

[Professor Alan] Dershowitz contends that, under the same game of skill theory, online sports betting should be legalized....

Dershowitz said, It is ridiculous to call either poker or sports betting a game of chance.).

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31 Notably, Dr. Heeb cited the ability to make a living playing poker as a basis for concluding that skill predominated over chance in that game: [F]or a number of different independent reasons, I concluded that skill predominates over chance in poker. I approached the problem with three different exercises. The first is an observation, which I have also made as a player, and that is that a great many people make a living playing poker. And its my opinion that a game in which a person can make a living reliably based on their skills, is a game of skill. And so that observation is independent foundation for my opinion that skill[] predominates over chance in poker, and I confirmed that in the data that I analyzed. (GA 113) (emphasis added); (see also GA 19 (Dr. Heeb states that the ability to make a living playing poker alone is an independent foundation for my opinion that skill predominates over chance in poker.)). By this criterion, however, sports betting is also an

activity in which skill predominates over chance, since it is beyond dispute that a skilled bettor can reliably make a living in sports betting. See, e.g., Jan. The 16, Gambler, 60 Minutes available (CBS at

television

broadcast

2011)

(video

http://www.cbsnews.com/video/watch/?id=7253011n,

transcript

available at http://www.cbsnews.com/stories/2011/01/13/60minutes/ main7243443.shtml) (profiling professional gambler Billy Walters,

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32 who has amassed a large fortune over decades of successfully betting on sports events). The district courts effort to distinguish the respective roles of chance and skill in sports betting and poker was

unconvincing. (SPA 110-11). The court relied upon the notion that poker players strategy can influence a poker hands outcome whereas the outcome of a sporting event is wholly outside of a bettors control. (Id.). This distinction is faulty. While a

sports bettor cannot (legally) influence the outcome of a game, sports bettors can and do influence the betting line or point spread in order to improve their odds of making a successful bet. Specifically, a gambler intending to make a large bet on one team may first place one or more smaller, strategic bets on the other team to move the betting line and make it more favorable for the ultimate intended bet. See The Gambler, supra (explaining how a

gambler can bet[] on both sides to move the line); Garrett Downing, supra (noting that professional sports bettors try to move the betting lines to improve their odds). This technique is

analogous to bluffing, raising or folding in poker, which are means by which skillful poker players can influence the outcome of a hand independently of chance. In any event, the distinction is simply not relevant to the district courts ultimate inquiry of whether skill predominates over chance. The inability to influence the outcome of an event is

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33 not in any way inconsistent with skills being required to predict the outcome. For example, no one would dispute that substantial

skill is involved in a political pollsters predicting the outcome of an election or a stock analysts predicting the future

profitability of a publically-owned company.

The district courts

definition of gambling would therefore also exclude sports betting or bookmaking, in clear contradiction to the plain language of 1955(b)(2). 3. Other Federal Statutes Other federal statutes are also relevant to determining the meaning of gambling. It is true that subsequent

congressional enactments have a limited value in determining the intent of an earlier Congress. See Jones v. United States, 526

U.S. 227, 238 (1999); United States v. Mine Workers, 330 U.S. 258, 28182 (1947). statutes is However, the definition of gambling under other to illuminating the commonly-understood

relevant

meaning of that term in a statute where, as here, it is not defined. As the district court noted (SPA 89-91), in 1996,

Congress passed the National Gambling Impact Study Commission Act (NGISC) to set up a commission to study the legalization of gambling in the United States. See Pub. L. No. 104-169, 110 Stat. Although the

1482 (1996) (codified at 18 U.S.C. 1955 notes).

NGISC did not amend the text of the IGBA itself, Congress directed

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34 that the NGISC be incorporated into the notes following 1955. See id. The NGISC defines gambling for purposes of that Act as any legalized form of wagering or betting conducted in a casino, on a riverboat, on an Indian reservation, or at any other location under the jurisdiction of the United States. Such term includes any casino game, parimutuel betting, sports-related betting, lottery, pull-tab game, slot machine, any type of video gaming, computerized wagering or betting activities (including any such activity conducted over the Internet), and philanthropic or charitable gaming activities. Id. 8(1). This definition includes poker, since poker involves

wagering or betting and is conducted at casinos and since it is also a wagering or betting activit[y] ... conducted over the Internet. NGISC, The district court dismissed the significance of the that the NGISC created its own definition

commenting

[r]ather than incorporating the definition of gambling already provided by the IGBA. (SPA 90). But this assertion rests on the

district courts mistaken premise that 1955(b)(2) contains a definition of gambling. Another federal statute that includes poker in the

definition of gambling is the Indian Gambling Regulatory Act (IGRA), 25 U.S.C. 2701, et seq., a statute that regulates the operation of gaming by Native American tribes. That act defines

class II gaming, which is permitted under certain specified conditions to include card games along games such as bingo and

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35 lotto. See 25 U.S.C. 2703(7)(A)(ii). The district court

correctly conceded that class II card games under the IGRA would include poker. C. (SPA 87).

The Interpretative Aids Invoked by the District Court Do Not Support its Definition of Gambling 1. The Rule of Lenity The district court invoked the rule of lenity in agreeing

with DiCristinas argument that 1955(b)(2) created a federal definition of gambling that was narrower than the state law definition. (SPA 100-01). [T]he rule of lenity only applies if,

after considering text, structure, history, and purpose, there remains a grievous ambiguity or uncertainty in the statute. Barber v. Thomas, 130 S. Ct. 2499, 2508 (2010) (internal quotations omitted); see also DePierre v. United States, 131 S. Ct. 2225, 2237 (2011) (refusing to apply rule of lenity where statute was not crystalline but the statutory text allows us to make far more than a guess as to what Congress intended) (internal quotation marks and citation omitted); Abbott v. United States, 131 S. Ct. 18, 31 n.9 (2010) (Although the clause might have been more meticulously drafted, the grammatical possibility of a defendants interpretation does not command a resort to the rule of lenity if the interpretation reading proffered of the by the defendant reflects an

implausible

congressional

purpose.)

(internal

quotation marks and citation omitted).

In this case, the district

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36 court erred by resorting to the rule of lenity because there was no grievous ambiguity in the statute such that after seizing upon everything from which aid can be derived, the Court can make no more than a guess as to what Congress intended. Muscarello v.

United States, 524 U.S. 125, 138 (1998) (citations and internal quotation marks omitted). Moreover, the district courts interpretation of the statute does not advance the purposes of the rule of lenity. Application of the rule of lenity ensures that criminal statutes will provide fair warning concerning conduct rendered illegal and strikes the appropriate and the balance in between defining the legislature, the

prosecutor,

court

criminal

liability.

Liparota v. United States, 471 U.S. 419, 427 (1985); see also United States v. Velastegui, 199 F.3d 590, 593 (1999) (The rule of lenity, a manifestation of the fair warning requirement, ensures fair warning by so resolving ambiguity in a criminal statute as to apply it only to conduct clearly covered.) (quoting United States v. Lanier, 520 U.S. 259, 266 (1997)). A reasonable person, looking at the plain language of 1955 in a commonsense way, would have fair warning that the statute applies to poker and other games that are commonly

understood as gambling. Indeed, the requirement in 1955(b)(1)(i) that the illegal gambling business violate state law eliminates

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37 any concern that the IGBA could be applied to punish conduct that the defendant believed to be lawful. By contrast, the district courts interpretation of the statute requires highly specialized knowledge and expertise that could not be applied by ordinary citizens seeking to determine the legality of their of conduct. the statute The district after court reached its

interpretation

only

reviewing

lengthy,

technical reports and hearing expert testimony about a study of 415 million hands of Texas Holdem poker. The courts summary of this

material, complete with graphs and charts, comprises more than 30 pages of its opinion. (See SPA 14-47). Even accepting arguendo

that the court correctly concluded that skill predominates over chance in Texas Holdem poker, it did not address other varieties of poker, much less completely different games such as baccarat, blackjack and pinochle. Presumably, the legality of each of these

games would have to be determined on a case-by-case basis, through an analysis similar to the one conducted by Dr. Heeb. This would

obviously be well beyond the capabilities of, for example, someone who was trying to determine what games could legally be operated by a neighborhood social club.10

A further element of uncertainty in this approach was illustrated by the disagreement between Dr. Heeb and Dr. DeRosa about how many hands of poker provided the relevant sample for determining whether skill predominated over chance. Dr. Heebs analysis showed that it required hundreds of hands of poker for more skilled players reliably to prevail over less skilled players. But as Dr. DeRosa noted, there is no rule in poker that a player

10

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38 At bottom, the district courts decision does not

strike[] the appropriate balance between the legislature, the prosecutor, and the court in defining criminal liability.

Liparota, 471 U.S. at 427.

The type of evidence and arguments on

which the district court relied should be directed to Congress or state legislatures in deciding whether to create an exception to the gambling laws for games of skill and what games should qualify under such an exception. They should not be invoked to rewrite a

statute that Congress has already enacted. 2. Common Law The district court asserted that common law supported its definition of gambling, because [m]ost states find that an

activity is ... illegal gambling if a person risks something of value on an activity predominantly determined by chance for the opportunity to win something of greater value than he or she risked. (SPA 62) (quoting Anthony Cabot & Robert Hannum, Poker:

Public Policy, Law, Mathematics, and the Future of an American Tradition, 22 T.M. Cooley L. Rev. 443, 445 (2005)). But as noted

before, some states, including New York, define gambling as an activity where chance merely plays a material role in the outcome, whether or not it is predominant. See nn. 6 & 7 supra. Other

states also define gambling in ways that do not depend upon the

must play a minimum number of hands. (GA 258-59, 274). And nothing would stop an unskilled player from leaving a game after fortuitously winning a large pot.

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39 degree of chance or skill involved. 2012 WL 5870814, at *5 (under See Town of Mount Pleasant, Carolina statute, the

South

definition of gambling is concerned with wagering regardless of the skill involved in the game wagered upon.). Moreover, throughout its history, poker has commonly been understood to constitute a form of gambling. The game appeared in

roughly its modern form during the early nineteenth century in New Orleans, apparently as a derivative of the French game poque. James McManus, Cowboys Full: The Story of Poker 51 (2009). See

State

legislatures across the country passed a wave of anti-gambling laws at around the same time, and these laws invariably prohibited poker along with other forms of gambling. Id. at 83-84. Poker is

described as gambling in a variety of contexts in reported cases dating back to the 1800s.11 The historical perception of poker as

a form of gambling persists. The Merriam-Webster online dictionary defines poker, in relevant part, as any of several card games in which a player bets that the value of his or her hand is greater than that of the hands held by others... Merriam-Webster Online

See, e.g., Utsler v. Territory, 10 Okla. 463 (1900) (The witness Fisher also testified that he saw gambling carried on in the room with cards, being known as stud poker, and he also testified that liquor was sold in the same room.); In re Sellings Estate, 17 N.Y. St. Rep. 833 (1888) (The proof submitted by the petitioner also shows the respondent Joseph Selling to be a man of utterly worthless and irresponsible character; that he is a professional gambler, know[n] as Poker Joe.... ).

11

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40 Dictionary (July 27, 2012) (available at http://www.merriam-

webster.com/dictionary/poker?show=1&t=1343184416) (emphasis added). Notably, the district court did not identify one state, nor is the government aware of any, in which poker has been held not to constitute gambling because it is a game in which skill predominates over chance. As noted before, poker is treated as a

form of illegal gambling under the laws of virtually every state. See nn. 8 & 9 supra. Indeed, in district court, DiCristina (See

tellingly resorted to citing decisions of foreign courts. DE 108 at 1-2).

However, American common law does not support the

district courts decision. 3. Ejusdem Generis The district court also erred in relying on the statutory maxim of ejusdem generis to support its interpretation of

1955(b)(2).

Ejusdem generis limits general terms [that] follow

specific ones to matters similar to those specified. CSX Transp., Inc. v. Alabama Dept. of Revenue, 131 S. Ct. 1101, 1113 (2011) (alteration in original, internal quotation marks and citations omitted). For example, ejusdem generis could be applied to

interpret the meaning of equipment in the statutory phrase fishing rods, nets, hooks, bobbers, sinkers, and other

equipment.

Id. (quoting United States v. Aguilar, 515 U.S. 593,

615 (1995) (Scalia, J., concurring in part and dissenting in

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41 part)). Courts typically use ejusdem generis to ensure that a Id.

general word will not render specific words meaningless.

Under these principles, ejusdem generis does not apply to 1955(b)(2). In that provision, gambling is not a general Rather,

catchall term that follows a list of specific terms.

1955(b)(2) provides that gambling includes but is not limited to the identified activities, thus indicating that the specific terms are non-exhaustive and are merely illustrations of things that fall into the general category. See United States v. Migi,

329 F.3d 1085, 1088-89 (9th Cir. 2003) (An application of ejusdem generis would narrow Congresss definition.... In addition, we

need not apply ejusdem generis because Congress modified its list of examples with the phrase including, but not limited to.); Cooper Distrib. Co. v. Amana Refrig., Inc., 63 F.3d 262, 280 (3d Cir. 1995) (Alito, J.) ([T]he rule of ejusdem generis applies only if the provision in question does not express a contrary intent. Thus, since the phrase including, but not limited to plainly expresses a contrary intent, the doctrine of ejusdem generis is inapplicable.) (citation omitted); Ramirez v. City Demonstration Agency, 549 F.2d 97, 104 (9th Cir. 1976) ([T]he phrase including but not limited to, [is] one that is often used to mitigate the sometimes unfortunate results of rigid application of the ejusdem generis rule.); see also City of New York v. Permanent Mission of India to United Nations, 618 F.3d 172, 183-85 (2d Cir. 2010).

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42 Moreover, because there can be no dispute that Congress intended activities other than the nine listed examples to constitute gambling, interpreting the statute to include poker would not render the specific terms in 1955(b)(2) meaningless. Moreover, even if ejusdem generis did apply to

1955(b)(2), the district court failed to offer a compelling reason why it did not adopt a broader definition that would be consistent with the IGBAs plain language and legislative history. For example, the nine activities identified in 1955(b)(2) all involve the wagering of money. This broader common attribute both

identifies a meaningful characteristic common to the list and preserves the prevailing meaning of the term gambling. Thus,

this Court should reject the district courts narrow and incorrect application of ejusdem generis and the resulting interpretation of the IGBA that gambling activity under 1955(b)(2) must involve a game where chance predominates over skill. See Ali v. Fed.

Bureau of Prisons, 552 U.S. 214, 225-26 (2008) (declining to adopt more limited statutory interpretation under ejusdem generis where broader interpretation was also available); City of New York, 618 F.3d at 184 (there is no contextual basis for adopting a narrower than normal meaning here.).

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43 CONCLUSION For the reasons stated, the district courts order

dismissing the second superseding indictment and vacating the defendants conviction should be reversed and the case remanded for sentencing. Dated: Brooklyn, New York December 20, 2012 Respectfully submitted, LORETTA E. LYNCH, United States Attorney, Eastern District of New York. By: /s/ Marisa Megur Seifan, Nathan Reilly, Assistant U.S. Attorneys.

DAVID C. JAMES, MARISA MEGUR SEIFAN, NATHAN REILLY, Assistant United States Attorneys, (Of Counsel).

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Certificate Concerning Type-Volume Limitation, Typeface Requirements, and Type Style Requirements 1. This brief complies with the type-volume limitation

of Fed. R. App. P. 32(a)(7)(B) because the brief contains 9,842 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). 2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a

monospaced typeface using Word Perfect X5 in 12 point Courier New font. Dated: Brooklyn, New York December 20, 2012

/s/ David C. James Assistant U.S. Attorney