Poker Tournaments and Casino Nights
Note: The Colorado Attorney General's Office and the Colorado Limited Gaming Control Commission have worked together to put together this response for information purposes only. This response should not be construed as a legal opinion, and you should consult with legal counsel before taking final action regarding the information in this response. Further, this response only encompasses Colorado State statutes. County and municipal jurisdictions may have local ordinances that may also address gambling issues. You should contact your local district attorney's office to determine these ordinances.
The first consideration in determining if a poker tournament or "casino night" is allowed under social gambling laws is whether the activity is defined as "gambling." For gambling to occur, three factors must be present - consideration, chance and reward. These can be better described as "payment, luck and prize." If any of these three factors is not present, then the activity is not considered gambling. For example, if no donation, fee, buy-in, tips, drink minimums or any other monetary consideration are required or solicited from the participants in a poker tournament or casino night, then prizes may be awarded to the player(s) who perform well during the tournament or games.
On the other hand, if an organization charges a donation, fee or other buy-in for a poker tournament or casino night, then it cannot legally distribute prizes based upon who wins or plays well in the tournament or event. Such organization could legally conduct a drawing, door prize or raffle as long as the prizes are randomly awarded and are not tied to success in the tournament or event. Likewise, the organization could legally conduct the tournament or casino night for the pure entertainment value alone. By disconnecting the prize from the risk element of the poker or other event, such activity would arguably not meet the definition of gambling. The Colorado Secretary of State handles permits for bingo and raffle events. This paragraph applies even if the poker tournament or casino night is for charity and/or the prizes are donated.
Once the activity has met the legal definition of "gambling," it can still be a legal activity if it meets the "social gambling" exception in Colorado statute.