Are Poker Clubs Legal In Houston

// Legal News, Misc, News

Houston’s Prime Social Poker Club, one of two day-membership poker rooms in Houston that was raided in early May, has filed suit against the law firm that approached them about helping lobby for an “anticipated” Houston ordinance that would formally legalize such rooms and remove them from a grey area in Harris County (Texas) law. Instead, according to the complaint, no such ordinance was ever under consideration by Houston-area legislators and the whole proposal was a sham.

According to multiple Houston outlets, Bayou Social Club, the parent company of Prime Social, has filed an action seeking “over $1,000,000” against Jones Walker L.L.P. Prime Social had paid $500,000 to Jones Walker but terminated its relationship with the law firm after learning no ordinance legalizing the social-poker clubs was being under consideration, and just days before the raid shuttered Prime Social and another Houston poker club, Post Oak.

“As part of its pitch to Prime Social,” the complaint alleges, “Jones Walker represented to Prime Social representatives that it was working on an ‘anticipated’ City of Houston ordinance for card rooms, such as the one operated by Prime Social. Jones Walker further advised Prime Social to hire its investigator who would operate as part of the legal team assisting Prime Social in establishing the necessary protocols in order to obtain a license under the ‘coming’ or ‘anticipated’ ordinance. Based on this representation, Prime Social paid significant sums to Jones Walker’s investigator, including sums Jones Walker represented would cover the license fee under the ‘coming’ or ‘anticipated’ ordinance.

“As it turns out, there was no ‘coming’ or ‘anticipated’ ordinance, and there was no basis for Jones Walker to believe it was legitimate. Indeed, the ‘anticipated’ ordinance turned out to be nothing more than an ‘idea’ being peddle by a separate client or acquaintance of the attorneys at Jones Walker and/or their investigator — a reality that was never disclosed to Prime Social and which resulted in substantial damages being incurred by Prime Social.”

The complaint does not specify whether the “separate client or acquaintance” is political consultant Amir Mireskandari, whose contract with the Harris County District Attorney’s office was terminated shortly after elements of the story involving the raids on the two Houston poker clubs became public. The suit hints the timing may not have been coincidental, stating, “… oddly, numerous other poker rooms in the City of Houston remained open for business.”

Charges against the two clubs were dropped within weeks while the DA’s office acknowledged a “conflict of interest,” and a separate FBI investigation into the situations has already been launched. Prime Social has already announced is plans to reopen the membership-based club in the near future.

VIP Poker Club is a private, members only club dallas poker club. We’re also rake and tip free, which means the whole pot is up for grabs! Come experience the convenience of a professionally run, local game of poker. Clubs are opening across Texas promising legal games in a state where gambling has long been illegal. Are they as advertised? The answer isn't crystal clear. Poker clubs need to be legal in texas. How ironic that texas hold em poker isnt legal in texas.

The Prime Social lawsuit also alleges that Jones Walker represented itself as having gaming-law expertise: “Indeed, Jones Walker markets and maintains a ‘Gaming Team’ of lawyers, which it represents as offering ‘full-spectrum legal, dispute resolution, government relations and legislative advocacy services to clients in every sector of the gaming industry.’ These are the services Prime Social anticipated receiving from Jones Walker.”

The lawsuit alleges misrepresentation, negligence, and breach of fiduciary duty by Jones Walker. The claim is for actual and punitive damages plus interest, along with all applicable court costs. Jones Walker has not issued a public statement in response to the action.

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Contents

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?

Are

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.