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| Q: Is it legal for a restaurant or bar in Texas to run a Texas Hold'em tournament? A: The answer depends upon whether the players put up any "thing of value" in order to play. If they do, it is illegal.
Penal Code 47.02
The only defense is defined as follows: (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. Restaurants and bars are not "private places" under the statute. A place is considered public for purposes of the statute if the public generally has access to it. (This would include private rooms within the club as well.) Thus, a bar or restaurant cannot be a private place. Since the defense will never apply to a restaurant or bar, the only other way to make a poker tournament legal in a restaurant or bar is to be sure there is no "bet" being placed on the card game. Penal Code 47.01 Thus, the only way to legally hold a Texas Hold'em tournament at a restaurant or bar would be to make it where the participants put up no "thing of value" to enter the tournament. (See Attorney General Opinion pdf.) Be forewarned that the Courts are strictly construing the statute. "Thing of Value" would include a "donation" or "table/room rental fee" or any other name seeking to disguise the entry fee as something else. Q: Are Charity Poker Tournaments that require a tax deductible donation and offer prizes donated to the charity currently legal in Texas? A: No. The answer to question one applies to this question as well. It is illegal to hold a public poker tournament in Texas where the players put up any "thing of value" and risks it for the chance to win a "thing of value." A donation is a thing of value and a donated prize presumably has value. Thus, this would be illegal. For an example of this, read the article about the closing down of the Susan G. Komen Breast Cancer Foundation Poker Tournament after it sold over $100,000.00 in tickets.
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Q. Is it legal for a group of poker players to rent an apartment or other building to play poker in if they only rake the pot until enough money to cover the expenses of the building, food, electricity and other operating expenses are met? A: No. In Gaudio v. State No. 05-91-01862-CR, (Tex.App.--Dallas, 1994)(unpublished opinion) a group of friends rented an apartment to use for playing poker. They did not derive a profit, however, they did have a rake that ran until the house recouped all of the expenses of renting the apartment, electricity, phone, chips and supplies. The Dallas Court of Appeals 5th District held that because the operator's name was on the apartment lease, he had an individual legal obligation to pay the lease. The rake he received to pay the rent relieved him of his legal debt obligation and thus, he did in fact receive a financial benefit from the game. Thus, the game violated the Texas Gambling Law. The opinion also references that the dealer receives a profit because he gets tips--this would also make it illegal if the dealer is the apartment lessor. Q: When will the next opportunity for the Texas Legislature to consider legalizing gambling be? A: The Texas Legislative session ended at the end of May, 2007. The Legislature only meets every two-years, thus, the next chance will be in 2009. Q: Did any gambling bills come close in the last (2007) legislative session? A: Yes. Norma Chavez' 2007 house bill to legalize casino-style gaming on all Indian reservations in Texas failed by one vote in the House of Representatives...the vote was a tie 66-66 and it required a majority to pass to the Senate. Q: Are "casino nights" legal in Texas? A: Yes and No. A "casino night" where nobody is required to give any thing of value in order to participate is not illegal. See Attorney General Opinion JM-412 (1985). However, if there is an entry fee or any donation or cost required to participate, it is illegal. A more recent Attorney General Opinion indicated that a "casino night" where the participants pay only to reserve tables and the prizes are donated is still illegal. See Attorney General Opinion DM-112 (1992). Q: What punishment does a bar owner face under Texas law for operating eight-liners in his bar? A: Under Texas law, he faces prosecution for three separate crimes: Keeping a Gambling Establishment, All three are Class A misdemeanors punishable by up to 1 year in jail and $4,000.00 in fines for each conviction. The other concern he should consider is that he could find himsellf facing a RICO charge. The police like to make the crime seem bigger than it ought to be by charging everyone who is in anyway involved in the businesses so they can claim it is an 'organized' crime that falls under Federal RICO laws. I do not know the extent of punishment under RICO, but I understand it is far tougher than Texas law.
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