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Texas AG declines opinion on legality of poker clubs

The clubs claim they're operating under a loophole in state law. Ken Paxton left it to the courts to decide.
Credit: KHOU
Texas Attorney General Ken Paxton declined to issue an opinion about the legality of private, membership-based poker clubs opening throughout the state.

Poker clubs in Texas can keep on dealing.

For now.

Texas Attorney General Ken Paxton declined to offer an opinion on the clubs’ legality on Friday, citing a lawsuit between two poker rooms in Austin and San Antonio.

“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.

More: Legal poker clubs in Texas? Don't bet big just yet

State Rep. Geanie Morrison, R-Victoria, requested the attorney general’s office weigh in on the private, membership-based poker clubs opening across the state in January. 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’—permitted under Texas law?”

In response to Morrison’s request, Virginia Hoelscher, chair of the Paxton’s opinion committee, wrote on July 6, “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, that KHOU.com analysis showed.

MAP: Poker rooms in Texas

The clubs cite a gray area in state law that allow them to operate legally, while critics say the clubs’ business models remain illegal.

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.

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,” said Houston city councilman Greg Travis, whose District G includes Post Oak Poker Club.

Credit: KHOU
There are more than 30 private, membership-based poker rooms operating throughout Texas.

Travis has long been an outspoken critic of the poker rooms, though not the game itself.

“People say it’s a gray area; I think it’s black and white,” he said in May.

Travis was puzzled by the 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, she cited the lawsuit between 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. In it, Austin Card Rooms accuses FSS Venture of unfair competition, alleging SA Card House operates under a business model that isn’t compliant under Texas law and because SA Card House offers cheaper rates, Texas Card House is losing members. Also noted in the lawsuit is Austin Card Room 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 3, an attorney for Texas Card House filed a notice with the attorney general’s opinion committee about the lawsuit.

Read for yourself: A brief look at Texas' gambling laws

The AG’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 AG’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.

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.”

Reporter Grace White contributed to this report.

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