Are Poker Clubs Legal In Houston

Posted By admin On 03/04/22
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  1. Are Poker Clubs Legal In Houston Area
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  4. Are Poker Clubs Legal In Texas

There are 27 poker rooms in the Texas area, and we at PokerAtlas provide complete and up-to-date information about every room in every location including Austin, Corpus Christi, Dallas, Edinburg, Houston, Katy, Midland, San Antonio, Spring, and Webster. However, a newly-opened business in the heart of the Galleria area aims to change all that. The Post Oak Poker Club offers players a safe, legal, casino-style environment to enjoy their hobby.

There are now at least 30 of the clubs in the state, all of which cite a gray area in state law that they claim allows them to operate legally by charging a membership fee, making money off food-and-beverage service and entertainment, and not taking a “rake” for the house. The Attorney General has declined to weigh in on the matter, citing a pending lawsuit.

Poker clubs that have been proliferating in Texas can keep on dealing for now, Houston television station KHOU CBS 11 reported, after Texas Attorney General Ken Paxton declined to offer an opinion on the clubs’ legality, citing a lawsuit between two of the clubs.

“Our agency has a longstanding policy of not issuing an opinion on an issue we know to be the subject of pending litigation,” a spokesperson for Paxton’s office said on July 6th

State Rep. Geanie Morrison, R-Victoria, had requested that the attorney general’s office weigh in on the private, membership-based poker clubs that have been opening across the state, KHOU reported. In Morrison’s request she wrote, “Are poker gambling enterprises that charge membership or other fees or receive other compensation from gamblers playing poker—but do not receive a ‘rake’ [commission fee]—permitted under Texas law?”

In response to Morrison’s request, Virginia Hoelscher, chair of Paxton’s opinion committee, wrote “When a legal matter is being litigated, the courts are generally the appropriate forum for resolving the issue.”

There are at least 30 poker rooms operating across Texas, according to a KHOU.com analysis, ranging from Houston to San Antonio to Austin to Corpus Christi. In the Houston area alone, there are at least 19 poker rooms open, the KHOU.com analysis showed.

The clubs cite a gray area in state law that allows them to operate legally, while critics say the clubs’ business models remain illegal, KHOU reported.

Texas law states poker is legal so long as it’s played in a private place, the house doesn’t take a cut out of the games and all players stand the same chances at winning and losing, KHOU reported.

The clubs claim that all members must pay a membership fee before entering, they don’t make money off the poker games themselves—rather through food, drinks, or other entertainment—and all players have that equal chance of winning and losing.

“It’s either legal or it’s illegal, regardless of what lawsuits there are,” Houston city councilman Greg Travis, whose District G includes the Post Oak Poker Club, told KHOU.

Travis has long been an outspoken critic of the poker rooms, though not the game itself, KHOU reported. “People say it’s a gray area; I think it’s black and white,” he said in May.

Travis told KHOU he was puzzled by Paxton’s decision not to issue an opinion, calling it “very strange.”

“I’ve never seen it happen before and I don’t know why he’s doing it,” Travis said. “There must be more to the story, and I’m going to find out.”

In Hoelscher’s response to Morrison’s legality request, KHOU reported, she cited the lawsuit between the Austin Card Room, LLC, which owns Texas Card House in Austin, and FSS Venture, LLC, which operates SA Card House in San Antonio.

“It is the policy of this office to refrain from issuing an attorney general opinion on a question that we know to be the subject of pending litigation,” Hoelscher wrote. “This policy, which has been in effect for more than sixty years, is based upon the fact that attorney general opinions, unlike those issued by courts of law, are advisory in nature.”

The suit was filed by Austin Card Room in Travis County on June 29, KHOU reported. In it, Austin Card Rooms accuses FSS Venture of unfair competition, alleging that SA Card House operates under a business model that isn’t compliant under Texas law and that because SA Card House offers cheaper rates, Texas Card House is losing members. Also noted in the lawsuit is the Austin Card Room, which asks the court to clarify the current law as it pertains to poker rooms that charge entry and time-based fees.

Four days after the lawsuit was filed, on July 3rd, an attorney for Texas Card House filed a notice with the attorney general’s opinion committee about the lawsuit, KHOU reported.

The Attorney General’s office was required by state law to offer a response to Morrison by July 26, 180 days after she filed her request.

The lack of the office’s opinion leaves the interpretation of Texas’ gambling law to individual district attorneys and law enforcement—at least until the lawsuit is settled in court, KHOU reported.

In Hoelscher’s response to Morrison, she wrote, “If your question remains unresolved at the conclusion of the litigation, you may resubmit your request at that time.”

Contents

Its name might be attached to the most popular form of poker, and the game’s greatest early practitioners all called the Lone Star State home, but the state of Texas has always looked at poker as an illegal activity.

For decades, if you wanted to find a game of poker in Texas you’d have to locate an underground game or card room.

Thanks to a loophole in Texas law, and a group of enterprising businessmen that is beginning change.

A handful of “legal” poker rooms have begun to pop up in Texas. Whether they remain open is anyone’s guess.

The Texas gambling laws

Texas law seemingly forbids poker, and outside of charity games and unraked home games, no one has challenged Texas’s ban on for-profit poker games.

Section 47.02 of the Texas Penal Code states, it’s an offense if a person:

Poker

(3) plays and bets for money or other things of value at any game played with cards, dice, balls, or any other gambling device.

But it also states:

(b) It is a defense to prosecution under this section that:

(1) the actor engaged in gambling in a private place;

(2) no person received any economic benefit other than personal winnings; and

(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.

A literal reading of the law would lead you to believe, poker is a-ok, so long as:

  • you’re in a private building;
  • no one is profiting from hosting the game; and
  • the game is fair.

How the legal card rooms work

The card rooms that are popping up in Texas are private clubs that provide rake-free poker games, as well as bridge, backgammon, chess, and beyond. Instead of a rake, which would make the game illegal per the Texas Penal Code cited above, the clubs charge membership fees, and in some cases seat rentals. The latter seems to be pushing the legality envelope even further.

Michael Eakman’s club, Mint Poker in Southeast Houston is one such example.

“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,” Eakman told the Houston Chronicle. “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.”

Of course, in addition to rake or a seat charge, the sentence, “no person received any economic benefit other than personal winnings,” could cover membership fees.

Will they stay legal?

The million dollar question is: How will the Texas Legislature react to these rooms?

Another owner of a private card club, Sam VonKennel, helped create the Texas Association of Social Card Clubs to lobby the legislature.

“The Legislature hasn’t really seen it yet because it hasn’t really existed,” VonKennel told the local press. “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.”

The problem is, the card rooms are new enough that they haven’t landed on the legislature’s radar yet, but like Daily Fantasy Sports, their success, and proliferation may end up being their undoing. Right now there are about a half dozen such clubs, but if they prove successful they’ll likely be popping up across the state.

University of Houston political science Professor Brandon Rottinghaus was quick to point out that being “technically legal” may not be a good enough argument, particularly in the conservative, and historically anti-gambling Texas legislature.

“It probably violates the spirit, if not the letter of the law,” Rottinghaus told the Houston Chronicle. “… 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.

“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.”

Even if they’re deemed legal, I would expect the legislature to look at imposing regulations and taxation/licensing fees.