Illegal Gambling Dallas Tx
By Reid Jowers
DALLAS - The Dallas Police Department was able to shut down illegal gambling operations at two businesses Saturday afternoon. Dallas PD’s Vice Unit got information about illegal gambling at 2403. Gambling, including poker, is technically illegal in the Lone Star State, but businesses such as the Texas Card House have found a loophole in the law. The card rooms operate as clubs where players.
Reporting Texas
Texas Card House General Manager James Combs is seen on March 2, 2019. Texas Card House is a private club and requires a daily, monthly or yearly membership. Brittany Mendez/Reporting Texas
On a Monday afternoon in March, Will, a 24-year-old software engineer in Austin, was relaxing during a break from a poker game at the Texas Card House in North Austin, where brightly lit rooms and affable service are a contrast to the image some people might have of a gambling establishment.
Will (his last name has been omitted to protect his privacy) started playing poker five years ago when friends introduced him to the game. He loved it.
“I like that it’s a beatable game. You focus and practice to get good. It’s a matter of skill rather than luck like blackjack or other games,” Will said.
The Texas Constitution prohibits most forms of gambling. The few exceptions include private gambling at home, betting on sanctioned horse and dog races, the state lottery and gambling at one of the three Indian casinos in the state. During the last several years, some gamblers have started using a loophole in state law to play cards for money at so-called card clubs, such as Texas Card House.
In 2015, Austin-born Texas hold’em poker player Sam von Kennel noticed a legal technicality that would allow him to open a gambling establishment. According to state law, gambling houses can operate as long as they don’t take a percentage of the pot. Von Kennel had an idea. Instead of taking a cut of the pot, he would charge membership dues and hourly or half-hourly fees for players to participate in a game. Based on his idea, von Kennel opened Post Oak in Houston, the first private social card club in Texas. Since then, about 30 other membership-only card clubs have sprung up around the state, he says.
On a typical weekend, Texas Card House hosts as many as 100 members at a time — a mostly male crowd that is diverse in ethnicity and age. Some poker games, the ones popular among regulars, have a buy-in of $300 and a potential payout of a few thousand dollars. Lower-stakes games have buy-ins as small as $40.
States that allow gambling still make a killing off casinos compared to the card houses in Texas. For example, Louisiana and Oklahoma annually average $2.4 billion and $4.4 billion, respectively, according to state revenue reports.
A tournament takes place at Texas Card House in Austin on March 2, 2019. Brittany Mendez/Reporting Texas
Illegal Gambling Dallas Tx News
Although Texas poker rooms operate in a legal gray area, there is precedent for them elsewhere. California card houses that operate the same way are legally recognized by the state. Colorado, Florida, Minnesota, Montana and Washington also have card houses, but no other states do, according to the American Gaming Association’s 2018 State of the States report.
Not everyone agrees that membership-based gambling house are legal.
One of the naysayers is Rob Kohler, a consultant and lobbyist for the Texas Baptist Christian Life Commission.
“It would require a constitutional amendment to make commercial gambling legal in Texas,” Kohler said. “Private home gambling is legal, but these poker rooms are not that. They are merely hiding as a private establishment, but in reality they are commercial.”
Rodger Weems, chairman of Texans Against Gambling, argued in a 2018 Baptist Standard article that card houses run afoul of the law. According to Texans Against Gambling’s website, its mission is to “Improve the lives of people by freeing them from the lower standard of living, exploitation, and fraud that commercial gambling spreads.”
Justin Northcutt, co-owner of the Texas Card House, says Kohler and Weems are playing a bad hand.
“We work very closely with state and local officials and law enforcement to make sure they know how we do business,” Northcutt said. The business pays sales taxes, payroll taxes and its share of property taxes, he said. Northcutt declined to say how much it pays.
“It’s not a dark, hidden, dangerous underground place,” he said.
The appeal of membership-based card houses isn’t gambling, but the skill and challenge of poker, he added.
Poker dealer Delia Atwood collects poker chips at her table during a tournament for the Social Card Clubs of Texas, a non-profit formed in 2018 for social clubs and card playing enthusiasts, at the Texas Card House in Austin on March 2, 2019. Brittany Mendez/Reporting Texas
Mike Robinson, a Wesleyan University psychology professor, has been studying gambling addiction for a decade and a half through experiments on rodents.
“We haven’t gotten the rodents to play poker, but the idea is the same,” Robinson said. Success in gambling — winning or almost winning a hand in a poker game, for example — activates the brain’s reward system, and addicts keep gambling in an attempt to reactivate those pathways.
Texas Card House revokes or bans members that show gambling addiction or bad behavior, Northcutt said, and the business is a part of the Social Card Clubs of Texas, a non-profit formed in 2018 that seeks to promote responsible card playing and create better communities.
Kohler, of the Texas Baptist Christian Life Commission, doubts the validity of these claims. He and the Christian Life Commission want to explicitly outlaw card houses, but since the Attorney General’s Office has refused to offer an opinion on the matter, the fate of these establishments is in the hands of local law enforcement.
Law enforcement across the state has been mostly tolerant, but in 2017, CJ’s Card Room in Dallas was raided by police and effectively shut down. Anti-gambling proponents such as Texas Against Gambling have called for law enforcement to continue raids.
Will said the risk of a police raid doesn’t bother him. “I don’t think most people will either,” he said. “It won’t matter because people will still find a way to play.”
Although gambling is a multi-billion-dollar industry, the state of Texas has traditionally taken a hard line stance against the industry. “Texas Hold ‘Em”, the extremely sought after casino game is regularly played in poker tournaments around the world offering millions in cash prizes. The game derives its name from Texas but the Lone Star state forbids people from playing it for economic benefit.
The strict regulations on nearly all forms of gambling have led many people to use loopholes, legal machinations and in some cases pure lies to bypass them. Due to the increasing popularity as well as highly profitable nature of gambling, an illegal and semi-legal gambling industry worth billions of dollars exists in Texas. While the potential profits might encourage some to engage in illegal gambling activities, the legal consequences might be quite sobering.
Laws Surrounding Game Rooms and Eight-Liner Machines
The Texas Penal Code strictly forbids most forms of gambling. Chapter 47 of the code specifically forbids betting money or anything else of value on the outcome of a card game or any game of chance.
According to section 47.02, a person commits an offense if he or she:
- Makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest
- Makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate
- Gambles for cash or other valuable products at a game played using cards, dice, or other gambling paraphernalia
An offense under this section is a Class C misdemeanor.
Section 47.03 criminalizes the intentional promotion of gambling activities. This makes it illegal to:
- Operate or participate in the earnings of a gambling place
- Engage in bookmaking
- Hold anything of value or offered to bet with the aim of making a profit
- Sell chances on the partial or final result of or on the margin of victory in any game or contest or on the performance of any participant in any game or contest
- Set up or promote any lottery or offers with the aim of making a profit
An offense under this section is a Class A misdemeanor.
Section 47.04 prohibits one from using or allowing others to use property owned or controlled by him for gambling purposes with the aim of gaining profits. This is considered a Class A misdemeanor.
Knowingly communicating gambling information with the aim of making a profit is also criminalized under section 47.05 of the penal code. This includes the communication of information about bets, betting odds, or changes in betting odds or knowingly providing, installing, or maintaining equipment for the transmission or receipt of such information.
Section 47.06 further penalizes the possession of equipment or gambling devices that might be used to communicate the kind of information forbidden under section 47.05. Offenses under both sections are classified as Class A misdemeanors.
Defenses Against Gambling Charges
Though these gambling laws might appear harsh, with the aid of a good lawyer it is possible to mount successful defenses should one ever face such charges in a court of law. Some defenses that attorneys might advance include:
- The accused engaged in gambling in a private place
- No person received any economic benefits apart from personal winnings
- Except for the advantage of skill or luck, the chances of winning and risks of losing were equal for all parties involved
- The gambling activity is allowed by a separate law such as the State Lottery Act and the Texas Racing Act
- The accused owned or possessed gambling equipment with the aim of transporting it to another jurisdiction where possession of such equipment is legal.
The Problem of Eight-Liners
Section 47.01 of the Penal Code gives the definition of a gambling device. It defines many popular devices used in the games of chance including slot machines, roulette wheels, electronic poker or blackjack machines, and keno machines.
This section legalizes such gaming devices, provided they’re installed purely for entertainment purposes and give out winnings in form of prizes other than cash. The value of these prizes must also be either $5 or not surpass 10 times their purchase price, whichever figure is lower.
This exception to the law has fueled a rise in underground gambling activity across Texas with many operators seeking to make a profit by exploiting this legal loophole. For example, machines known as eight-liners have been growing in popularity all over the state with installations in both public places and private residences. Although they claim to be legitimate businesses, they would be deemed illegal if properly scrutinized by inspectors.
Such devices can easily be programmed to substitute cash payouts with other items such as home appliances. These prizes can then be exchanged for cash, thereby bypassing the strict ban against gambling for economic benefit. Some even configure them to pay out in cash while fooling gambling inspectors that they’re still operating within the law.
Gambling Penalties
Gambling for economic benefit in Texas might lead to some heavy penalties for those involved. Section 47 of the Texas Penal Code classifies the crimes as class A and C misdemeanors. The penalties for such crimes are:
- A fine of up to $500
- Community service and probation
These penalties are applicable for class C misdemeanors.
Class A misdemeanors attract penalties of:
- Up to one year in county jail
- A fine of up to $4000
Attitudes Towards Game Rooms
While the legislative and law enforcement institutions in Texas continue to take a hard-line stance against gambling activities, civilians have shown a willingness to embrace relaxed gambling laws. In an effort to have some peace of mind, some Texas residents spend a lot of money traveling to other states where gambling for profit is allowed. The continued popularity of underground game rooms and explosion of online casinos is also a signal that the people would not mindless restrictive gambling laws.
Recently, some game rooms have gone to court seeking a proper interpretation of gambling laws, especially in cases where state laws seem to clash with federal laws. Some clubs operate in legal gray zones by interpreting the law in a way that suits their financial needs. For example, while gambling for economic benefit is strictly prohibited, these clubs make money by renting seats, charging by the hour, charging for the use of facilities inside the game room, and selling food and drinks at higher than normal profit margins.
Want to Know More about Texas Game Room Laws?
If you’ve been charged with breaking game room related laws, we will use the resources at our disposal to ensure the most favorable outcome for you. If you’re venturing into owning a game room, we will clear up any confusion or anxiety you might have about breaking the law.
Illegal Gambling Dallas Tx Area
The Law Office of Matthew D. Sharp has all the answers to your questions. Our highly experienced attorneys and dedicated team of legal experts leave nothing to chance in ensuring you get the best legal representation in Texas.