A free-play online poker site in California is coming under fire from the Attorney General’s office for possible violations of California law for awarding cash prizes to players.
Cafrino.com has been operating since Sept. 10 and does not require that players bet real money or pay any subscription fees. Players are allowed to participate in sponsored tournaments for free, with winners being paid from revenue obtained via advertising. The controversial site’s New York-based attorney, Adam Solomon, calls the operation “a lawfully structured sweepstakes” instead of gambling. However, other legal experts have differing opinions.
California statutes state that “playing for something of value is illegal,” a spokeswoman for Attorney General Kamala Harris told iGaming Post. But noted legal gambling expert Professor I. Nelson Rose feels that the wording of the law is rather sloppy and that “the attorney general is simply wrong when saying that something you can enter for free is gambling,” Rose said. “If anyone and everyone can enter for free, then it is not gambling.”
The state’s gaming law says that persons operating a “controlled game” must first obtain a license. And poker falls under the provisions of a controlled game under the state penal code, said Harsh Parikh, a gaming attorney with Snell & Wilmer, LLP, located in Costa Mesa, California.
“It seems clear that poker is a controlled game in California and that Cafrino is not properly licensed to offer a controlled game,” Parikh told PokerUpdate. Also, California Penal Code § 330.1. states that “the use of a computer to play Cafrino may qualify as a slot machine that uses ‘element of hazard or chance,'” Parikh added. For that reason, “anyone that uses Cafrino may be guilty of a misdemeanor under the penal code provisions applicable to slot machines.”
Cafrino.com owners Jonathan Aiwazian and Sean Stavropoulos seem prepared to test the water’s of their free-play site’s legality after receiving roughly $300,000 in funding to get started from Kayweb Angels LLC, an investment group that mentors website startups in return for equity. “The reason we are legal is we are not a gambling site,” Aiwazian said.
Cafrino.com has generated quite a bit of traffic since going live last month. “It’s done a lot better than we anticipated,” Aiwazian said. “We’re on pace to reach over a half-million hands dealt in the first month of operation.”
An advertisement on YouTube boasts that Cafrino.com is “free to play” and “100 percent legal.” Based on the opposing opinions of legal experts, that proclamation looks certain to be challenged in a court of law.