March 29 (Bloomberg) -- The former co-owner of a private London poker club was fined 10,000 pounds ($19,500) today after a jury found him guilty of profiting from a game of chance in violation of Britain's gambling laws.

Derek Kelly, who ran the Gutshot poker club, argued that he didn't need a gambling license to take money from players because the U.K.'s Gaming Act 1968 only covers games of chance like roulette or slot machines, not skill-based games such as poker or golf.

"It was your view that poker, and particularly Texas Hold'em was not a game of chance,'' Justice Simon Wilkinson said today at a sentencing hearing Kelly in London. "In adhering to this view, you took a huge gamble.''

Had the jury agreed with Kelly, more than a dozen private poker clubs in London would have been free to charge members without regulation by the Gambling Commission until September when the U.K.'s Gambling Act 2005 comes into force.

Kelly was found guilty under Britain's old gambling law in January for charging some of Gutshot's 25,000 members to buy chips and enter a tournament.

"I think the judge was reasonable in the end,'' Kelly said after the sentencing. "Five hundred pounds a month I can just about afford.''

Kelly was also conditionally discharged for two years and the 10,000 pounds will go toward covering a portion of the prosecution's costs. He said he will only appeal his conviction and not the sentence.

Character, Cooperation

Kelly now runs Gutshot's online poker site, which is registered in Dublin.

Wilkinson said he decided on a 10,000-pound penalty rather than prison after considering Gutshot was a well-managed club that took moderate fees and catered to players with different skill levels. He also noted Kelly's good character and cooperation.

Britain's gaming industry has been in turmoil since last year when the U.S. passed the Unlawful Internet Gambling Enforcement Act to prevent credit-card companies from collecting payments for online bets. The decision wiped out $7 billion from the market value of U.K. operators such as Sportingbet Plc and Leisure & Gaming Plc.

The gaming industry suffered another blow yesterday when the U.K.'s House of Lords voted to block approval of 17 new bricks- and-mortar casinos, including the U.K.'s first Las Vegas-style supercasino in Manchester. Online casinos will still be licensed to operate in the U.K. for the first time beginning Sept. 1.

Kelly, and online sites such as Pokerstars, have argued for months that they are not subject to U.S. or U.K. gambling laws because poker is a game of skill where a talented player will win over a lucky player given time.

The new gaming law is even more restrictive in its definition of chance, Nick Nocton, a partner at London-based Jeffrey Green Russell solicitors, said in a telephone interview today.

"There's little doubt that any game where chance can be eliminated -- even by superlative skill -- will still be a game of chance under the new law,'' said Nocton, who wasn't involved in the case.