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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:

(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.

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.”

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.

52 Social Poker Club

“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.

Poker Social Club Austin Mn

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.

Poker Social Club

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.”