New Texas poker rooms are opening in the Lone Star State, but brick-and-mortar card rooms exist in a legal gray area. As the poker clubs toy around with new moneymaking policies, local and state authorities are beginning to question the legality of the sites.
Under Texas law, most forms of gambling are illegal. Bets on horse racing are legal. So is the Texas State Lottery, alongside the Mega Millions and Powerball multi-state lotteries.
Gaming machines called Eight-Liners are popular throughout East Texas and South Texas, though the convenience stores which host 8-Liner machines cannot pay in cash. Every so often, one of those business owners goes to jail for breaking that rule.
Are Poker Clubs Legal in Texas?
All other forms of gaming are illegal. Poker is illegal, if the house collects a rake. Online poker is illegal, just like online and mobile casinos. Even daily fantasy sports is illegal.
Texas lawmakers take a moral stand against gambling, even if poker’s most popular variant, Texas Hold’em, is named for the state. Influential figures in poker history like Doyle Brunson, Amarillo Slim, and Benny Binion were Texans, yet they eventually left the state for Las Vegas to play in a permissive gambling environment.
Texans Gambling in Oklahoma and Louisiana
As a result, the casino industries in nearby states are booming. An hour north of the Dallas-Fort Worth Metroplex, the WinStar World Casino in Thackerville and the Choctaw Casino in Durant, Oklahoma are among the biggest in the world. Dallas gamblers make up the bulk of the customers.
Those willing to travel a little further from DFW can gamble in Shreveport and Bossier City, Louisana. Gamblers living in the Houston metropolitan area travel an hour and a half to Lake Charles, Louisiana, which has 9 different casino locations. It is obvious that Texans love to gamble — and they especially love to gamble on casino games.
With that in mind, it is no surprise that poker clubs exist. It is legal to allow poker in a club, so long as the house does not collect revenues. Thus, you’ll see rake-free poker offered in gaming clubs, alongside competitive games of bridge, chess, and backgammon.
Texas Poker Club Membership Fees
These poker clubs traditionally charge membership fees, which is a legal practice. Article 47.02 of the Texas Penal Code states that people who plays or bets “with cards, dice, balls, or any other gambling device” are in violation of the law under certain other circumstances.
One of those stipulations suggests that the game is legal only if “no person received any economic benefit other than personal winnings”.
Under Article 47.02, charging membership fees might be breaking the penal code, though law enforcement has tended to look the other way for such a minor infraction — if it is an infraction at all.
Seat Rental Fees Flout Texas Law
Recently, though, some Texas poker rooms have begun charging “seat rental fees“. According to local law enforcement, those fees may be illegal. The problem with a seat rental fee is it gets awfully close to a poker rake.
Where a one-time membership fee is a minor charge, a seat rental fee is a recurring cost. Clubs might calculate the size of the fee needed to simulate the rate of pay for a poker rake, then charge an ongoing seat rental fee commensurate with the rake in a poker game.
The two fees are not exact — rake is based on the size of the pot, which can balloon in a no-limit game — but it is close enough that law enforcement and legislators might equate the two.
The Mint Club: An Example of Seat Rentals
Michael Eakman is the owner of a poker club in Southeast Houston named the Mint Club. Eakman told the Houston Chronicle recently that the Mint Club charges seat rentals, but they received pre-approval from local prosecuters.
Eakman said of his new business, “In our conversations with the city attorney here in our jurisdiction, we made everyone aware of what we were doing before we even signed the lease.”
“I certainly don’t want to challenge anyone to bring a court case, but I think at the end of the day we’re handling this by being proactive instead of reactive is the way to do this….There are no regulations and guidelines other than the narrow scope of a very vague law.”
Professor Brandon Rottenhaus said that the poker rooms are playing with fire. Rottenhaus, who is a political science professor at the University of Houston, said, “It probably violates the spirit, if not the letter of the law. While the Texas legislature is in sessions less than most state houses in the nation, the poker clubs need to be concerned about the Texas Attorney General’s office. Professor Rottenhaus said, “In instances like that, there will definitely be a push back where the Attorney General and local law enforcement might take offense to the idea that there might be this illicit expansion of gambling, even if it’s not technically speaking illegal gambling.
The professor warned those who would try to make a quick profit by flouting Texas gaming laws that it is likely to bring trouble. Rottenhaus added, “Trying to get around the law on this issue is never profitable. I think that’s the real danger that the people running these clubs have.”
‘You may technically be in the right, but this issue is so fraught with politics and morality that you’re unlikely to succeed.”
Texas Association of Social Card Clubs
Some believe Texas lawmakers and officials can be mollified. Sam VonKennel, co-founder of the Texas Association of Social Card Clubs, said he wants to keep the Texas state legislature aware of the latest trends in poker clubs. VonKennel’s group was created to lobby Texas’s lawmakers to allow small-time poker rooms to exist.
VonKennel said, “The Legislature hasn’t really seen it yet because it hasn’t really existed. As they pop up, I want to make sure the [legislature] is aware of them.”
“What I would really like to do is get these guys to become licensed with the Texas Department of Licensing and Regulation, and that way they’re absolutely certain they’re on the right side of the law.”
