Poker Rooms In Houston Legal
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. Contact Houston game room attorney Matthew Sharp for help » Poker Rooms in Texas. The state of Texas allows some forms of gambling such as buying lottery tickets and betting on horse and dog races. Bingo and gambling for charity are allowed, as long as the organizers of such events do not profit from them. When it comes to card rooms, the law clearly states that: Poker is illegal in a public facility, which is why the card rooms should operate inside private clubs. There is now a place to play poker in Houston that is 100% legal - www.club333.biz - open on 6/2/16 this is a private club and requires that you send a text to reserve a seat. Founded by Judy & Robert Espericueta The House Club, LLC is designed to bring the much needed class as well as comfort to poker players in the Rio Grand Valley. THC is a poker enthusiasts social club. Where our members can come to sharpen their poker playing skill to prep for our seasonal tournaments.
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By Reid Jowers
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
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.”
Poker Rooms In Houston Legal Court
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.
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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.”
One of the cruelest of life’s ironies (for gamblers, anyway) has long been that one could not legally play Texas Hold’em in the state of Texas. However, a small group of card clubs around the state seek to remedy that fact.
I recently sat down with the owners of the newest of these clubs, The Poker Club of West Houston. The club, which will open for business on May 7, seeks to become the example for legal poker in Texas.
It’s not easy to gamble in Texas
Texas law on gambling is rather austere. Except for lottery, bingo, and live racing carveouts, Texans must go to one of two Native American operations or travel out of state to gamble.
Otherwise, they are breaking the law. Or are they? There is a section of the code that proves relevant to the issue:
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.
It is within these exceptions that The Poker Club of West Houston seeks to exist.
“The only way we knew how to do this was absolutely legal,” said Carl Pittman, President and CEO. Mr. Pittman and his business partner, Scott Ketcham. They spoke at length about their efforts to abide by the narrow spaces in the law that would allow them to offer poker to clients.
How poker clubs may thread the needle in the law
The easiest part to satisfy is the clause about risks of winning or losing – they simply need to run a fair game. However, they must conduct business in a specific way to satisfy the other two parts of the defense.
To qualify as a private place, the club will require potential members to complete an application, submit an initiation fee, and play through a 30-day probation period before they are granted full membership.
“We don’t want everybody to be a member of this club,” said Pittman. “That (makes the club) no different than your country clubs.”
The portion of the law about receiving economic benefit forbids raking the pots in any way. The Poker Club of West Houston plans to charge an hourly seat fee, which will avoid the problem somewhat.
Also, the amount of the fee will not change regardless of the level of game, meaning that the club has no preference for one type of game or another. In fact, the payment for the hourly fees will remain separate from any activity on the table – all to remove any appearance of the club deriving economic benefit from the outcome of games.
So, to say they have no interest in breaking the law is to put it very mildly. Pittman and Ketcham also pledge to report cash transactions above the $10,000 threshold to the IRS, in accordance with Title 31 of the Code of Federal Regulations.
They even have self-exclusion forms for problem gamblers to bar themselves. Both men are committed to maintaining the highest standards of conduct with any club business.
As Ketcham said, “Our goal is to be a benchmark standard.” Those standards also extend to safety and security concerns.
How to keep the games safe?
Gambling in Texas is a dodgy prospect with regard to safety. Stories of robberies abound, from Johnny Hughes and the road gamblers to an Austin poker player shot on April 30.
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Both Pittman and Ketcham are former law enforcement officers with nearly 45 years of experience between them. Though both are extremely friendly, they assured me that their experience would guide them in keeping players and personnel safe.
To that end, I noticed cameras all over the walls at the The Poker Club of West Houston. The cashier cage is an actual cage with key-coded doors.
Pittman and Ketcham also mentioned that armed security will be onsite during games. The club will also offer valet parking and shuttle parking to cut down on parking lot incidents.
The two owners also said the club would allow players to carry concealed weapons, as per Texas law. The idea behind these efforts is to reduce the club’s status as a soft target for thieves.
Success depends on the community
Poker Rooms In Houston Texas
Ultimately, the success of The Poker Club of West Houston will depend on the community response. The two owners say that they have had tremendous interest so far – hundreds of inquiries and/or site tours since the marquee sign went up just over two months ago.
They also said that the nearby neighborhood response has been positive. In fact, neither Pittman nor Ketcham could recall any negativity from interactions with the community whatsoever.
Still, there are detractors within this mostly conservative state. This past week, Houston city councilman Greg Travis declared this kind of poker room to be illegal under state law.
That said, this new club will be the sixth of its kind in the Houston area. Their growing popularity is evidenced by the fact that a WPTDeepstacks event will come to Houston in September – the very first major poker event in Houston’s history.
For their part, Pittman and Ketcham hope their caution and good faith efforts to remain compliant with the law will lead to success and permanence. With any luck and their help, poker is here to stay deep in the heart of Texas.
I plan to attend the grand opening on Monday. Be sure to look for my trip report in Part 2 of this story.