A poker company based in Missouri is suing New York state after a law was passed banning free poker games.
The firm organises competitions that take place in bars and taverns but competitors do not need to pay to take part, reports the Albany Bureau.
Gamers start each event with a set number of chips, which they do not pay for and which they cannot exchange for cash.
At the end of the night's play, the tournament winners get prizes, such as 20 seats to a professional poker tournament or up to $10,000 cash.
State law defines gambling as when "an individual stakes or risks something of value on the outcome of a contest".
However, Benjamin Scheck of the Free Poker Experience LLC noted that the games organised do not fall into this category as players do not bet anything "of value" to start with.
Poker has recently fallen foul of the state in Kentucky where Governor Steve Beshear led a move to seize 141 domain names belonging to online poker companies.