There are now at least 30 of the clubs in the state, all of which cite a gray area in state law that they claim allows them to operate legally by charging a membership fee, making money off food-and-beverage service and entertainment, and not taking a “rake” for the house. The Attorney General has declined to weigh in on the matter, citing a pending lawsuit.
Poker clubs that have been proliferating in Texas can keep on dealing for now, Houston television station KHOU CBS 11 reported, after Texas Attorney General Ken Paxton declined to offer an opinion on the clubs’ legality, citing a lawsuit between two of the clubs.
“Our agency has a longstanding policy of not issuing an opinion on an issue we know to be the subject of pending litigation,” a spokesperson for Paxton’s office said on July 6th
State Rep. Geanie Morrison, R-Victoria, had requested that the attorney general’s office weigh in on the private, membership-based poker clubs that have been opening across the state, KHOU reported. In Morrison’s request she wrote, “Are poker gambling enterprises that charge membership or other fees or receive other compensation from gamblers playing poker—but do not receive a ‘rake’ [commission fee]—permitted under Texas law?”
In response to Morrison’s request, Virginia Hoelscher, chair of Paxton’s opinion committee, wrote “When a legal matter is being litigated, the courts are generally the appropriate forum for resolving the issue.”
There are at least 30 poker rooms operating across Texas, according to a KHOU.com analysis, ranging from Houston to San Antonio to Austin to Corpus Christi. In the Houston area alone, there are at least 19 poker rooms open, the KHOU.com analysis showed.
The clubs cite a gray area in state law that allows them to operate legally, while critics say the clubs’ business models remain illegal, KHOU reported.
Texas law states poker is legal so long as it’s played in a private place, the house doesn’t take a cut out of the games and all players stand the same chances at winning and losing, KHOU reported.
The clubs claim that all members must pay a membership fee before entering, they don’t make money off the poker games themselves—rather through food, drinks, or other entertainment—and all players have that equal chance of winning and losing.
“It’s either legal or it’s illegal, regardless of what lawsuits there are,” Houston city councilman Greg Travis, whose District G includes the Post Oak Poker Club, told KHOU.
Travis has long been an outspoken critic of the poker rooms, though not the game itself, KHOU reported. “People say it’s a gray area; I think it’s black and white,” he said in May.
Travis told KHOU he was puzzled by Paxton’s decision not to issue an opinion, calling it “very strange.”
“I’ve never seen it happen before and I don’t know why he’s doing it,” Travis said. “There must be more to the story, and I’m going to find out.”
In Hoelscher’s response to Morrison’s legality request, KHOU reported, she cited the lawsuit between the Austin Card Room, LLC, which owns Texas Card House in Austin, and FSS Venture, LLC, which operates SA Card House in San Antonio.
“It is the policy of this office to refrain from issuing an attorney general opinion on a question that we know to be the subject of pending litigation,” Hoelscher wrote. “This policy, which has been in effect for more than sixty years, is based upon the fact that attorney general opinions, unlike those issued by courts of law, are advisory in nature.”
The suit was filed by Austin Card Room in Travis County on June 29, KHOU reported. In it, Austin Card Rooms accuses FSS Venture of unfair competition, alleging that SA Card House operates under a business model that isn’t compliant under Texas law and that because SA Card House offers cheaper rates, Texas Card House is losing members. Also noted in the lawsuit is the Austin Card Room, which asks the court to clarify the current law as it pertains to poker rooms that charge entry and time-based fees.
Four days after the lawsuit was filed, on July 3rd, an attorney for Texas Card House filed a notice with the attorney general’s opinion committee about the lawsuit, KHOU reported.
The Attorney General’s office was required by state law to offer a response to Morrison by July 26, 180 days after she filed her request.
The lack of the office’s opinion leaves the interpretation of Texas’ gambling law to individual district attorneys and law enforcement—at least until the lawsuit is settled in court, KHOU reported.
In Hoelscher’s response to Morrison, she wrote, “If your question remains unresolved at the conclusion of the litigation, you may resubmit your request at that time.”
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