Texas Bill HB 292 Attempts to Legalize Poker in the State

Staff December 18, 2012 861 Reads

Texas is looking yet again to legalize poker.  HB 292, known as the Poker Gaming Act of 2013, was filed on Monday and sets the groundwork for legalized poker within the state and even has a provision for Indian tribes within the state.  The Texas Lottery Commission will be in charge of regulating poker in Texas.

Poker Is Skill

Early in the bill, the question of luck vs. skill is addressed by the bill.  Sec. 2004.002 (b) specifically states that:

  • “poker is a game of skill and not a lottery or gift enterprise prohibited by the Texas Constitution.”
  • “a person in this state may not offer and has no right to offer the game of poker for profit except as expressly permitted by the laws of this state”
  • development of poker gaming will boost tourism for the state and bring in new jobs and revenue

Who Can Run the Games?

In order to offer poker within the state, the entity must be licensed by the Texas Lottery Commission.  The Commission will appoint a Director of Poker Gaming Operations who will be in charge of the division.

The following can apply for a license to offer poker:

  • Those licensed to offer bingo
  • Those holding a pari-mutuel license from the Texas Racing Commission
  • Federally recognized Indian tribes that have a reservation in the state
  • Other companies who go through the TLC’s application process and are approved

In addition, the license must include all information regarding where the games will be held and the Commission will specify how many tables that each licensee is authorized to spread.  Indian tribes will be permitted to hold poker games on reservation land only.

Dealers, Manufacturers, and Distributors Must Also Be Licensed

Texas by this bill is also requiring that all dealers, poker manufacturers and distributors be licensed by the state.  This means that if you want to sell poker related equipment or services to card rooms, you have to have a license.

Dealers will go through a normal licensing process but they will be no residency requirement to deal poker in the state as long as the dealer is in good standing.  In addition, dealers must go through Commission approved and developed training.

Fees for Licenses

Poker licenses in Texas will be good for one year and must be renewed annually, meaning that fees must be paid annually.  The following are the fees for licenses in Texas and these fees are the same for renewals:

  • $1,000 for a poker operator’s license
  • $100 for a poker dealer’s license
  • $250 for a manufacturer’s license
  • $250 for a distributor’s license

Taxes

Anyone holding a license within Texas, with the exception of pari-mutuel establishments, are required to pay an 18 percent tax annually on gross receipts.  Pari-mutuel establishments will pay 16 percent.

Also, poker operators in Texas are required to submit an electronic report of each day’s gross receipts and those reports are due by 5 pm the day after those receipts are required.  Talk about tracking every dollar.

Poker Gaming Revenue Fund

The taxes collected by the comptroller will then put into a Poker Gaming Revenue Fund, which will be an account held outside the treasury.  The Commission will hold a portion for operating expenses and then send the rest to the Texas Department of Housing and Community Affairs.  Half of the money going to the HCA will be put into a trust fund and the other half will go to help the homeless in Texas.

Table Limits and Poker Tournaments

Poker rooms will have the ability to establish their own table limits in their establishments but the law makes an interesting restriction on poker tournaments.  According to the bill, poker tournaments cannot exceed a buy-in of $100 and a entry fee of $30.  Whether or not this will be modified remains to be seen but if not, this will eliminate the chance of any significant poker events coming to Texas.

Prohibited Devices and Cheating

While normally overlooked in most of these bills, the Texas poker bill makes using the following devices a third degree felony:

  • A device projecting the outcome of a poker game
  • A device analyzing the probability of the occurrence of an event related to the game

Technically, a poker calculator could fall under this provision so the Commission may want to clarify this section a bit.

Other parts of the bill reviewed the standard considerations for such a bill such as penalties for failing to pay taxes on receipts, procedures for revoking licenses, etc.  By and large this bill looks like a fairly solid attempt to legalize the game within the state and one that on the surface appears to address most concerns.  The question now is whether this bill will have the support to make it through the legislature.

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