Texas Poker Room Update: Big Events, Raids, & an Uncertain Future

January 19, 2023
Texas Poker Room Update: Big Events, Raids, & an Uncertain Future

2023 is shaping up to be a pivotal year for the fate of poker rooms in Texas. Or, alternatively, nothing at all will change.

Needless to say, it’s not clear what exactly will happen. However, there are several indications that the question of the clubs’ legitimacy and legality is coming to a head soon.

The first of these clues are some high-profile raids and other troubles that occurred during 2022.

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Texas Card House Dallas throws down

Texas Card House Dallas (TCHD) suddenly found itself embroiled in a legal battle with the City of Dallas after the city abruptly revoked the club’s occupancy license.

Although city officials had been more than happy to dole out a license months before (along with its associated fees), they appeared to reverse course without warning and render TCHD unfit to do business in Big D.

Texas Card House, for its part, has not taken the revocation lightly or lying down. Management has argued the case in the court system ever since. Unfortunately, card room advocates have not found much success in the courtroom, but appeals mean that the case will continue into 2023. 

The one bit of success that the room has found during this process is the fact that it has been permitted to operate while its appeal is ongoing. For the time being, Dallas residents may continue to play at TCH Dallas without incident.

Texas Card House CEO Ryan Crow has also indicated that TCH is taking up the battle legislatively too. In an email, he indicated that TCH has joined an advocacy group called “Texans for Texas Hold’em.”

Part of the group’s plans include the proposal of a bill to clarify TCH’s legal right to do business in the state (along with other rooms with a similar business model). 

Watauga & Top Shelf raids

Two months after the City of Dallas revoked TCH Dallas’s occupancy license, law enforcement in Flint, Texas, took things a step further. Officials raided Top Shelf Poker Room in March 2022 and declared the establishment to be offering illegal gambling. The overnight raid resulted in seizures of financial records, gaming equipment, and cash.

Top Shelf management found itself charged with Class A misdemeanors and the room was closed by the Smith County sheriff. So far, the room has remained closed since the bust by law enforcement.

The closure of a room in a small east Texas town doesn’t usually warrant much interest. However, the general public took notice when a similar raid occurred months later.

In October 2022, authorities conducted a raid on the Watauga Social Lounge in Watauga. The raid occurred on Day 2 of the club’s Fall Classic Main Event, a tournament with a $420 buy-in and a guaranteed prize pool of at least $100,000

Law enforcement arrested 10 staff members from the lounge and issued $360 fines to all players in the establishment. In addition, police confiscated numerous items as evidence, including more than $200,000 in cash.

As was the case in Flint, the poker room has remained closed ever since. Another Watauga poker room, Wild Card, has also shut its doors permanently.

Whether any of the charges against management or the players will stick in either case is a matter for adjudication. There’s no denying that, at least in the interim, some authorities in Texas feel confident they can shut down the clubs for violating Texas’ gambling statutes.

Unfavorable clarity may be coming in 2023

The reason for the uneven enforcement for the clubs throughout Texas remains the ambiguity in law. One Texas lawmaker has already put forth a bill that would clarify that ambiguity, but perhaps not in a way that poker advocates in Texas would prefer.

Texas gambling law clearly outlaws professional gambling establishments, but allows for successful defenses against prosecution if the parties can assert the following conditions:

  • the actor engaged in gambling in a private place;
  • no person received any economic benefit other than personal winnings; and
  • except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants 

Since their debut in recent years, clubs have attempted to remain compliant with those conditions and, thus, remain in the good graces of the law enforcement officials. However, the question of whether or not they do so successfully remains unanswered.

Rep. Gene Wu (D) filed a bill in December that would change the language of the first condition to read as “…engaged in gambling in a private residence,” rather than place.

The growth and popularity of poker clubs in Texas may be hitting some roadblocks after revoked permits for some of the city's establishments.

Thus, at first glance, the bill seems to spell doom for every card room across the state. However, Wu has since stated that he intends to refile the bill to reflect his goals more accurately.

Wu is by no means an opponent of legal gambling in Texas. In fact, he has publicly supported the expansion of gambling across the entire state. He told PokerNews in December 2022: “We’re supportive of fully legalized gambling across the state.”

Instead, Wu seeks to eliminate the uneven enforcement and render the decision about poker to individual counties. So long as the county government approved the placement of a club, it could operate with the current business model. Wu also supports counties conducting deep background checks on management and issuing licenses to dealers.

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The status quo is likely to remain

If the longstanding historical precedent for Texas legislative sessions holds, however, Wu’s bill is never going to see the light of day, regardless of wording. It has become a virtual tradition in odd years that lawmakers propose gambling expansion in Texas that never makes it out of committee.

Instead, it seems more likely that things will remain as they are for the immediate future. The clubs will continue to operate in plain view.

Leaving things as they are may not be a solution that the clubs want, however. Noted gambling lawyer and expert I. Nelson Rose wrote at length in 2022 about the difficulties the clubs have in terms of satisfying the three conditions for a successful defense against prosecution.

Specifically, he believes that the clubs have an uphill battle with regard to proving that their properties are private places under the law. However, the larger concern is the economic benefit aspect, as the clubs are undoubtedly receiving one even without collecting a rake.

Whether club owners can show that their benefit is entirely indirect, akin to bar owners selling drinks while poker tournaments take place, is the very crux of the matter, according to Rose.

So far, the official administration, regulation, and enforcement involving the clubs has remained uneven and has depended heavily on the whims of the law enforcement officials in each county or area.

Unfortunately, until lawmakers like Wu pass new legislation or Attorney General Ken Paxton issues an opinion to establish a clearer perspective, clubs will have to operate under this instability.

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