Dallas Poker Club
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
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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.”
Dallas Poker Clubs
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.”
After shutting it down slightly more than a year earlier, the Dallas City Council has passed regulations that will allow for the first officially city sanctioned poker room to be opened in the home of the Cowboys, the Mavericks and the Stars. It will join a sister card room that is already in existence in Dallas, but it could only be a temporary situation.
Battle in City Government Works Out
Owner Ryan Crow of the Texas Card House originallyhad petitioned the City Council in January 2019 to be able to open up a pokerroom. Back in a City Council meeting at that time, however, Crow was denied abusiness license, despite all but one property in the strip mall supporting themove. In that Council meeting, Crow’s proposition only garnered eight of thenecessary 12 votes.
There was one caveat to that January vote,however. Crow could appear before the Council again to resubmit the applicationvia a waiver or could wait two years to try again. Crow decided the time wasright to strike on Wednesday, going in front of the Dallas City Council againand resubmitting his application. This time around, the outcome was much moreto Crow’s liking.
First off, Crow was able to get the loneholdout from the last time the proposition was in front of the Council to comeaboard the project. EF Properties switched its stance when it was able to get aclause put in the contract that it would be reviewed in two years. A letterthat acquiesced EF Properties position stated that “a private card house might not fit with the future uses”at the property but, in the meantime, it was allowable.
Dallas pokerplayers will have to wait a bit before the property can be opened in the ValleyView Center, or what is being called the “Midtown” district. Crow states thatit will take about three to four months for the property to be developed. Thiswould put the opening date of the Texas Card House II (another Texas Card Houseproperty exists in another area of Dallas at the Sam Moon Shopping Center) atsome point in May or June.
Lots of Questionson Texas Poker
The questionof poker clubs in Texas has been raging for the last few years. Under Texas law,there are no laws against playing poker, but there are strict gambling laws. Someentrepreneurial spirits looked the law over, however, and found some loopholesin the gambling laws.
Under Texaslaw, to constitute illegal gambling there has to be money taken as a rake or afee from the actual play of the game. The card rooms got around this by takingnothing from the pots but charging a “membership fee” for players to enter thebuilding. Along with some food and non-alcoholic beverages sold by the pokerrooms, the businesses don’t make anything from the actual PLAY of poker on thetables; all the money on the tables goes to the players at the tables, not tothe house.
Poker Clubs Dallas Texas
This loophole led to the expansion of poker across the Lone Star State. Austin became a hotbed of poker “clubs,” alongside San Antonio and Houston, a couple of other major metropolitan areas. These clubs were nearly torpedoed last year when the District Attorney of Houston, Kim Ogg, had Houston law enforcement raid two clubs, the Prime Social Poker Club and Post Oak Poker Club, under the belief that they were laundering money through their operations. Those efforts were killed, however, when it came to light that Ogg’s very own office had given the green light to these operations and, allegedly, one person involved with the DA’s office was writing legislation to get the poker clubs regulated by the city of Houston. That brought Ogg’s case against the card rooms to an abrupt end, with all the charges against the owners of the two rooms dismissed.
Dallas Poker Rooms
The state legislature has been reluctant to step up and examine the gaming laws in the state, leaving it to the county and city officials to decide what actions to take. For the most part (other than the Houston situation), they have decided to let the poker clubs be rather than try to enforce a law with a great deal of gray area. It is significant, however, that with the new regulations in Dallas, the Texas Card House will become the first poker club operation to be allowed by any city officials in the state of Texas. Whether it starts a change in the overall laws remains to be seen.