Membership Based Texas Card Rooms

This is a follow-up and expansion to a post we made in 2015 dealing with the original concept of the Membership Card Room. The information in that original post is now outdated and no longer completely accurate, as the original card-room that was discussed has changed its business model since that posting. Additionally, new facilities have opened throughout the state, with similar business models as to what will be described in this updated posting. This posting was originally suggested by one of our supporters, and we genuinely appreciate the insight. We value your opinions and look forward to including more postings that directly address your specific questions and interests about the current state of Poker In Texas. We will gladly cover almost any topic, from existing laws, proposed legislation, legal games & leagues, and much more. When the vast majority of poker players think of a card room, or dedicated area to play poker for cash or money. The most common business model that players expect, is that the House will take a Rake from the Pot in play (These terms are defined HERE).  Under current Texas law, however, that business model is illegal. The rationale and legal justification is that the ‘RAKE’ business model gives an economic benefit to a party that is not directly involved outcome of the contest. Translation: the “house” is not involved directly in the outcome of the hand, so the “house” cannot benefit from the superior play, or even dumb luck, of the players involved in that session of the game. This prohibition on 3rd parties benefiting from the activities of a contest of luck or skill (poker is known to be a contest of skill) extends to the dealers of the game and even so far as to food-service providers. What this means in common language, is that the time-honored tradition/superstition of “tipping” the dealer for winning hands, is forbidden under current law, as is something as innocuous as ordering a pizza, if it can be reasonably surmised that the funds for the food could have come from the money “in play” at the game. Actions like giving a tip to the dealer or ordering food have been successfully prosecuted in Texas for creating a criminal enterprise from what was an otherwise legal game. (**Ruling from the Texas 7th Circuit Court of Appeals)

Membership Card Room

Enter a new business model, okay not completely new… but “New and Improved” on an old attempt at a workaround or working within the confines of the existing state law. Several entrepreneurs throughout the state have been actively looking to meet the needs and market demands of the poker players of Texas. The new model is a Membership Card Room structure. For any player to be allowed into the business, they must apply to be a member of the private organization (aka the private card-room). This includes a membership fee (weekly/monthly/annual/etc.). These fees are set independently based on each location, and usually, are very reasonable. In addition to the membership fee, the new business model uses a flat-rate seat rental fee. This is an hourly fee charges to anyone who elects to play at a cash or tournament table within the facility. Usually, this fee is between $5.00 and $10.00 per hour, depending on the location. This fee is the same (normally) for cash games and for tournaments, and the game limits do not (usually) impact the seat-rental rate. If you are accustomed to a ‘Raked’ game, you can quickly do the math and realize that a ‘Rake’ will usually cost an average player around $20.00 per hour (often $30.00/hour or more). The current hourly rates of $5.00 to $10.00 per hour are a significant savings versus the traditional ‘Rake’. For this seat rental fee, the players are getting these (and more) services:

  • Impartial and professional dealer.
  • Clean, un-marked, deck to use in the game play.
  • Guarantee of payment of winnings.
  • Safe, and secure facility to play poker.
  • Comfortable seating and well-maintained tables
  • An honest game.

For any player who takes a moment to think about these services, they are absolutely worth the small hourly fee that these businesses and private rooms/facilities are charging. These seat rental fees are not collected at the table from monies that are “In Play”, but are accrued and tracked via a time-clock type system that is usually managed and collected when players buy chips and “Cash-Out” of the game. This way no money is ever removed from the table.

Is It Legal

The next question that is raised by many, if not all, of the people who contemplate opening a card room, or even playing within one of the established rooms within Texas is… “Is this legal?” As we have mentioned above and referenced in many areas, on many occasions, current Texas law prohibits any party from gaining an economic benefit from a game of chance by any means other than the independent skill or luck of a participant. This is clearly intended to prevent the offering of gambling games where there is a “House” advantage, like Blackjack, Craps, Slot-Machines, etc… The membership card room business model, as discussed in this post, purports to offer a clear distinction in the service offered by the card-room, and the payment for those services. By making the payment on a flat-schedule, and requiring payment in a separate transaction that occurs away from the table play, the operational theory is that there is no economic benefit to the card-room from what happens on the tables. The card-room is offering a service, to its members (not the general public), for a set fee, that is independent of the winnings or losses that may occur on any given hand or session of play. We are not going to offer a set-in-stone opinion or verdict on the actual legality of this business model. However, we would be remiss if we did not point-out that many of our directors, and scores of Poker In Texas members and supporters are currently members and patrons (or will be as new facilities are opened) of facilities that use this business model. While the legality of this business model has not been determined by the legislature, or by a Texas court, many of the operators and players believe, that by using the distinctions described with this model, that they are, in fact, in compliance with the current laws, as written, in Texas.   At this time, we are assembling a list of membership-based card rooms in Texas, so that you, the poker players throughout Texas, can find a safe, honest, and well-run game. The list found HERE will be updated routinely, as we find more businesses and poker rooms who are offering these services for safe, secure and honest games.   ** Updated as of January 27, 2017  

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