The Legal Aspects of Owning a Poker Room in Texas

Playing poker for fun dates back to ages ago when playing cards were first invented. As the second largest state in the US by both area and population, Texas has continued to register a high growth in the number of poker rooms to accommodate growing interest in poker.

The popularity of poker rooms in Texas, however, has not been without challenges considering that Texas has strict anti-gambling laws. This puts many poker room operators at a risk of finding themselves on the wrong side of the law, even without realizing it.

If you own and/or operate a poker room in Texas, you may have questions about the legal aspects of such businesses. If you’re thinking of opening a game room and have questions about Texas gambling laws for your game room, this post addresses these legalities.

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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. Public places include but are not limited to hospitals, schools, streets, highways, nightclubs, shops, office buildings hotels, motels and shared areas of apartment buildings.
    •    No one should receive an economic benefit aside from their personal winnings. This also penalizes the act of bookmaking and/or betting on the outcome of a game, contest or on the performance of individual players.
    •    Except for the advantages of skills or luck of the players, all the participants should have the same chances of winning and the risk of losing.

It is illegal to possess and use information that gives you an unfair advantage on the outcome of a game or contest. Making use of illegal gambling devices is also strictly prohibited.

How do Texas Poker Rooms Make Money?

It is clear that the law forbids operators from making a profit from gambling. However, some Texan gamblers, eager to indulge in their passion without worrying about legal consequences, have come up with ingenious ways of earning income such as:

  •   Charging players membership fees to enter the premises. Becoming a member can be as easy as allowing the club to swipe your driving license. Some poker rooms also offer flexible membership models such as a $10 daily membership fee.

These methods, while not explicitly illegal, might cause trouble for game room operators in the future. One could argue that the card rooms are receiving economic benefits from the gambling activities they host, hence breaking the law.

Penalties of Illegal Gambling in Texas

The Texas Penal Code specifically makes it illegal to bet even a few dollars on a hand of poker. This is enough to lead to criminal charges, especially if that action is conducted in a public place. Section 47.02 of the Texas Penal Code makes this a Class C crime which is punishable by:

  • Fines. Misdemeanor fines for illegal poker rooms in Texas range from a few hundred dollars up to $500. Note that fines can be separate or in addition to community services and probation.
  • Community service and probation. Courts can also impose community service and probation for gambling convictions. The probation period can last up to 12 months or more.

If an operator conducts organized or professional gambling that promotes players to enter competitions in card rooms instead of simply playing in them, the penalties can be significantly increased. Section 47.03 of the penal code prohibits promoting or operating a gambling place. In addition, Section 47.04 makes it illegal to keep a location intended for public gambling use. These offenses are Class A and are punishable by:

  • Jail or prison. Anyone convicted of these gambling offences can face up to one year in a county jail.
  • Fines. The court can impose a fine of up to $4000 for misdemeanor gambling.

Sometimes, if a person is operating a poker room in public, he/she may lose their business license and be denied any future credentials to operate in the states of Texas.

Understanding Texas Poker Room Gambling Laws

It is important for one to understand how gambling laws work if they plan on operating a poker club. Both newcomers and industry veterans need help in the interpretation of the law, as legal aspects of a business can be both confusing and frustrating.

Recently, more established poker clubs with bigger financial muscles have gone to court in an effort to seek a legal interpretation of exactly what is legal and what is not. One cannot plead ignorance in a court of law, so it is in their best interests to try as much as possible to understand the law.

Laws also keep changing with the times, so even the most informed poker room owner might find himself ambushed by a clause he didn’t know existed.

To that end, hiring a competent criminal lawyer with a thorough grasp of gambling laws comes in handy. A good attorney not only provides advice regarding current industry requirements but also keeps the client in the loop regarding upcoming changes in the law that might impact his or her business.

Consult With a Houston Game Room Attorney

The Law Office of Matthew D. Sharp provides the best advice to those interested in or are already running poker rooms. All legal aspects of the business are discussed with the client, with the view of providing guidance on the best course to take.

With our years of experience in the industry, we provide not only historical background, but also future trends in lawmaking that might affect the client’s poker room. We invite all game room owners to call us and share their experiences and legal needs with us.

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