Texas Gambling Law

Gambling under Texas law because they constitute betting on the performance of a participant in a game as opposed to being a contest of skill. Because the organizing gaming site takes a portion of the money collected from players as a fee, the defense to. Gambling boats have operated at times out of Texas ports, taking passengers on one-day 'cruises to nowhere' in international waters, where there are no gambling laws. The casino cruise industry developed in other states in the early 1980s, but was a latecomer to Texas because of a state law prohibiting the docking of ships with gambling.

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

Read this complete Texas Penal Code § 47.04. Keeping a Gambling Place on Westlaw FindLaw Codes are provided courtesy of Thomson Reuters Westlaw, the industry-leading online legal research system. Texas gambling law is among the strictest in America. This has to do with tradition, mostly. Texas was settled largely by people with no strong cultural tradition of gambling. In the German-settled areas of Texas (including the present-day capital of Austin), the only form of gambling known was microstakes poker. Unlike parts of New England. Gambling is illegal in Texas. But state law offers a defense against prosecution when gambling takes place in a private place where no person receives an economic benefit beyond personal winnings.

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.

“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.

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.”

Texas is a big place with a big personality. Tall hats, tall hair, and tall tales are what the state is known for.

Gambling laws in Texas, however, are not so grand. If you are interested in knowing, “Is online gambling legal in Texas?” read on.

Texans use the word “freedom” quite a bit. They tend to use it in terms of 2nd Amendment gun laws that were created to help militias muster quickly against invading armies.

Despite the existence of several military branches and a National Guard, this constitutional amendment has come to be equated with personal freedom, not just in Texas, but across the nation.

However, you can’t play poker with friends in Texas. Not even in your own home, not with your own money, and not even if the curtains are closed.

When it comes to gambling, TX has less freedom than nearly any other state. There are, however, Texas online poker rooms that do accept players from the Lone Star State.

There is one casino on tribal lands within the state, owned by the Kickapoo tribe. There are other federally-recognized tribes in the state, but TX has fought assiduously against them opening their own gambling sites.

Texas gaming commission lawsTexas Gambling Law

Federal discussion of the issue is now pending. Thus, many Texans turn to online casinos to play slots, roulette, baccarat, and other games.

And Yet…There Is Gambling in Texas

The state lottery is very popular in the state. Lotteries are the purest form of gambling available, involving no skill to win, unlike many casino games where a player can hedge his or her bets or watch the play and enter at optimal times.

Furthermore, betting on dog races and horse races in Texas is not only legal, but this betting activity attracts big crowds.

There is no rhyme or reason as to why these betting activities are legal in the state but other games are not. Even carnival games are forbidden from using stuffed animals to lure elementary school-aged players!

There is hope on the horizon for sports bettors. A lengthy bill was introduced to the legislature in 2019 to allow for and create parameters around legal sports betting in the state. The decision has not been made yet, but we suspect we will see some forward movement on this legislative proposal in 2020 or 2021.

If and when the bill is passed, sportsbook operators will need to pay a fee of a quarter-million dollars. The number of licenses that would be authorized is unknown.

As to daily fantasy sports, state legislators have made confusing remarks about the pastime. Is it legal or not? There was an attempt several years ago to declare DFS illegal, but DFS is still an active reality in the state.

There are DFS sites licensed and regulated elsewhere that do accept Texas residents, but be aware that, given the confounding state of TX gambling laws, you do so at your own risk.

Is Online Gambling Legal in Texas?

Texas Gaming Commission Laws

It’s not legal for any Texas-based operator to offer real money online gambling to Texas residents. However, there are sites outside the state that are licensed and regulated and accept players from Texas.

We have researched and ranked all of the online gambling sites for Texas, should players choose to explore the gaming at online casinos and sportsbooks.

Texas Gambling Law

We rank these sites based on the quality of key criteria. First, we look to customer satisfaction with the site. Is it easy to navigate? Are wins paid promptly?

Next, we look to the state of the site’s internet security and how well funds and information are safeguarded. Is the security at the online casino cutting-edge and constantly monitored?

We are online gamblers, so we know that these are important factors in enjoying online play comfortably and with confidence.

Texas is an old territory with a proud heritage. Changes—to the law, to styles, to views—are often viewed with suspicion. “If it ain’t broke, don’t fix it,” seems to be the legislative approach to proposed changes in the law. However, there are some brave voices in the state that are working to legalize gambling.

Texas Gambling Laws Slot Machines

Stay on top of evolving gambling news to know if changes are coming to Texas; it’s the best way to stay safe as you play.