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Houston Begins Licensing Legal Live Cardrooms

Map Showing Location of Houston Within Texas

The City of Houston, Texas, has begun licensing cardrooms within its borders. Residents of the Lone Star State's largest metropolis can now enjoy fully legal Texas Hold'em, Pot Limit Omaha, and other types of poker in both cash game and tournament form.

The First Licensed Houston Cardrooms

The Lions Poker Palace on Richmond Avenue obtained the appropriate gaming license from the city in October 2017. It spreads $1/$3, $2/$5, and $5/$5 NL Hold'em along with $1/$3 and $5/$5 Pot Limit Omaha. The tournament roster contains events priced from $80 to $600 with guaranteed first-place prizes that go as high as $9,900.

Post Oak Poker Club on Post Oak Boulevard secured its license in March 2018. Cash game poker is available at blind levels of $1/$3 and $5/$5 for NLHE and $5/$5 for PLO. Multi-table tournament buyins run from $80 to $200, and the club holds $10,000 guaranteed tourneys on Saturdays. This venue augments its income through the sale of food and beverages.

Post Oak Poker Club
Post Oak Poker Club in Houston, Texas

Both of these facilities charge no rake or tournament fees. Instead, there's a seat rental that's levied per hour or half-hour in ring games and per event in tournaments. Additionally, players must purchase membership for a $10 initial fee and an additional charge for every day that they wish to play. Longer-term membership is available at a discount over the normal daily rate.

Several other firms claim to offer fully legal Houston poker although their licenses are often difficult to find online. There are differences between them in that some offer other activities in addition to poker, like billiards and chess, a few of them provide drinks while others are dry, some are open 24/7 whereas others follow a restricted schedule, et cetera.

About the Houston Poker Legal Situation

Legal Book

According to Title 10, Chapter 47.02 of the Texas Penal Code, someone is guilty of gambling if he or she engages in any of several activities, including, “plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.” This effectively makes poker illegal, but there's an exception to these rules:

(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.

These provisions make home games explicitly legal as long as no one profits other than as a player. It also, incidentally, allows for online poker in Texas without violating any laws as long as it's conducted in a private place, like the player's own home.

Perhaps inevitably, savvy entrepreneurs soon realized that the wording of this law allowed offline cardrooms to operate through clever workarounds. By making their poker halls members-only, they would fall into the category of “a private place” as outlined in (1) above. By selling food and beverages while charging membership fees and time charges to finance their operations instead of exacting traditional rake and tournament fees, these establishments could get around the “economic benefit” clause.

There have therefore sprung up a number of private poker clubs throughout the state. However, the City of Houston passed a more restrictive local ordinance in 2014 (Ord. No. 2014-674) that states in part:

It shall be unlawful to operate, use or maintain any room or place in the city where persons are permitted to play at any game of dominoes, cards or other games, and for the use of which, or privilege of playing therein or thereat, any money or its equivalent, or any check or counter in lieu of money shall be paid or received, or where memberships are sold for anything of value for the privilege of playing therein or thereat, without first securing a license therefor.

This language is tougher than that contained in the overall Texas laws, and it basically makes brick-and-mortar poker illegal unless the proprietor obtains a license.

Copy of Post Oak Club's license sourced from their Facebook page

Downsides to Licensure

Thumb Pointing Down

Receiving a license to operate a game room isn't a trivial affair. Beyond the paperwork and background checks required, there's also the matter of the fee. For cardrooms in Harris County, which encompasses most of Houston, the fee is $1,000. For establishments located outside Harris County, it's $513.14 plus a $28.50 administrative fee. Each license is good only for a year after which it must be renewed with the payment of the appropriate fee again.

Given the hassles and expense of applying for a license, it's understandable that there remain Houston cardrooms that have not yet gone through this process. Historically, the local enforcement of gaming laws has been a low priority, and depending on which officials happened to be in power at any given time, these violations were sometimes ignored altogether.

However, the fact that some businesses have acquired licenses gives the authorities extra justification to go after underground enterprises. The owners of legitimate licenses also have an incentive to push for the targeting of illegal clubs so as to reduce competition and thereby derive some benefit from the fees they have paid to the city.

Possible Future Woes for Poker in Houston?

Red Question Mark

Regardless of the Houston ordinance giving the city power to license game rooms where poker is played, it's possible that state leaders may clamp down on the activity. Notwithstanding club owners' contention that the membership fees and seat charges that they collect don't constitute “economic benefit” under state law, it's easy to see how their political opponents could feel otherwise. If these operations are found to be against state law, this would trump the local ordinance enacted by Houston.

State Representative Geanie Morrison sent a letter to Attorney General Ken Paxton on Jan. 26, 2018, asking for clarification on whether or not these membership-based rooms are violating state law. An anti-gambling group known as Stop Predatory Gambling Texas also submitted a document to AG Paxton on March 1, outlining why it believes that this type of gaming activity is contrary to the law.

The attorney general hasn't yet weighed in with his opinion, but he's expected to do so in a few months. His decision will likely influence the way state authorities interpret the gambling statute and could therefore spell doom for these private membership cardrooms or else allow their managers to breathe a huge sigh of relief.

Problems for Louisiana?

A Redditor from Houston questions the profitability of playing in Texas vs Louisiana.

As many players who reside in Texas know, the state mandated legal games are across the border in Louisiana. Cities like Shreveport, Lake Charles, and New Orleans have thriving brick-and-mortar casinos, all of which contain poker rooms of various size.

Players from Houston, TX, if they aren't getting their kicks in an underground casino or card room, typically drive across the border to nearby Lake Charles. There, they partake in the Hold'em and Omaha games spread at The Golden Nugget, L'Auberge Du Lac, and The Isle of Capri. With the addition of licensed card rooms, and their expected proliferation, will these players continue to make the 2 to 3 hour drive into Louisiana?

A redditor compares Louisiana and Texas poker games

Only time will tell, but we expect that many a professional poker grinder in Louisiana is worried by this news of licensed Houstonian card rooms. If worse comes to worst, Louisiana players can always play poker online.