Proposition Joe said:

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Broba Fett said:

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If the house doesn't take a rake, it's not illegal. Someone else is losing money and got pissed

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"It's not illegal because the house doesn't take a rake" (all the while taking money in the forms of membership, chair-buy-in, concessions, etc...) is like a *****house saying they are just a place for people to come hang out and if they want to buy a $200 bag of Doritos then that's not illegal.

It's straight out of the Lionel Hutz School of Law.

I think most agree they should be legal (though regulated), but these owner/operators knew exactly what laws they were circumventing and the risks in doing so.

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Well, it's more like having free rooms to have sex in, but the Doritos are $200 and we aren't asking questions like "is that your wife?"

Martin Q. Blank said:

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How can you launder money through something that itself is illegal?

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As noted by others.....having a poker room is not illegal. The only thing that makes it illegal is when the house takes a rake from the pots.

Looks like another poker room is about to open up on Washington & TC Jester, where Ulas was. This should attract a pretty good crowd of Washington donkeys, I'd think.

Quote:

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The only thing that makes it illegal is when the house takes a rake from the pots.

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That the argument (and it may be successful), but that is not what the law says.


Sec. 47.04. KEEPING A GAMBLING PLACE. (a) A person commits an offense if he knowingly uses or permits another to use as a gambling place any real estate, building, room, tent, vehicle, boat, or other property whatsoever owned by him or under his control, or rents or lets any such property with a view or expectation that it be so used.

(b) It is an affirmative defense to prosecution under this section that:
(1) the gambling occurred 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.

Its not clear whether "received any economic benefit" would include paying to get in or paying for chips

And its also not clear if its a "private place." which means "a place to which the public does not have access, and excludes, among other places, streets, highways, restaurants, taverns, nightclubs, schools, hospitals, and the common areas of apartment houses, hotels, motels, office buildings, transportation facilities, and shops."


AG Paxton was asked for opinion, but declined since there is pending litigation.

I wouldn't say Post Oak Blvd is inexpensive. They may have been getting reduced rent as that spot was supposedly going to get demolished at some point, but who knows.

I would think the "membership" required to play at these places would have covered them as far as being private. Similar to what some drinking establishments had to do in the Heights to get around their silly dry laws.

The part about profiting will probably be more tricky.

the problem with that is that there is a specific statute setting on the requirements for a those "private" drinking clubs.

there is no statute that provides that for poker.

maybe not...but they would have a decent argument for being private based on the setup.

I just think it's hard to argue there is no "economic benefit" but we'll see.

So at the end of the day if they're operating legitimately it's not illegal but I think what HPD is saying is that they were not.

I'm sure they were cooking books/fraud and getting bundled together with some aspect of organized crime.

Not surprising

"If there is no rake it's not illegal" is right up there with "if I ask you if you're an undercover cop you have to tell me".

I'm going to open up a place where you can come in and pick whatever sports team you like and you can pay me a premium and I'll insure you if they lose.

It's not sports-booking though. No no. It's insurance. So it's legal.

You can make a case the laws need to be changed and you can make a case that it's a poor use of police resources... But these guys are profiting from running a gambling business.

Diggity said:

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maybe not...but they would have a decent argument for being private based on the setup.

I just think it's hard to argue there is no "economic benefit" but we'll see.

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I'm not saying they don't have a good argument on private. I'm saying that the "drinking clubs" are specifically allowed by statute, so they can't use that as an example

Harris County District Court civil docket.

Prime Social case is 2019-30591 in the 295th district court

I get it..that's why I said similar!

Also, look at the donors for Judge Elaine Palmer (215th Judicial District). She is the Harris County Ancillary judge for the month of May (ancillary judge is the judge that hears all ex parte (other side doesn't get a chance to show up with a lawyer) requests for things like temporary restraining orders). Since they waited until May 1, they may have been waiting until the April ancillary judge term was up and they knew that Palmer would be friendly to their request.

blindey said:

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I looked at the petitions against the clubs on the civil Harris County docket. They are pretty much devoid of actual facts (some cops sat in the poker rooms by following the established rules, saw a lot of people playing poker, thought they saw people getting 'free' alcohol, and therefore, the place is a money laundering and illegal gambling operation that should be shut down as a nuisance immediately). I would go as far as to call it governmental pettifoggery.

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Yep. You don't just send some cops to sit in on the poker room and expect them to come back and tell their boss, "yep chief, we went down there, played some hands and had a couple of drinks ... everything looks to be on the up-and-up."

Thats just not the way it works.

You boss sends you somewhere to 'investigate' a crime, your ass is coming back with a report good enough to get a warrant.

If you come back with nothing, you are off the vice detail and back on the street writin' tickets under an overpass.

Proposition Joe said:

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"If there is no rake it's not illegal" is right up there with "if I ask you if you're an undercover cop you have to tell me".

I'm going to open up a place where you can come in and pick whatever sports team you like and you can pay me a premium and I'll insure you if they lose.

It's not sports-booking though. No no. It's insurance. So it's legal.

You can make a case the laws need to be changed and you can make a case that it's a poor use of police resources... But these guys are profiting from running a gambling business.

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If you're implying that they were taking a rake on top of charging a membership and/or charging by the hour, you'd be foolish to think they wouldn't have been shut down before now. 1) I doubt any player is going to pay a fee and ALSO have money taken from pots.....that's just dumb. Plus if they started to do this, I'm sure there are plenty of disgruntled players pissed that would've outed them to people that have ties to law enforcement. 2) This place wouldn't have very many customers, when players can go somewhere like Post Oak Poker Room (which a buddy of mine plays in regularly) that doesn't skim off the top.

David_Puddy said:

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Proposition Joe said:

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"If there is no rake it's not illegal" is right up there with "if I ask you if you're an undercover cop you have to tell me".

I'm going to open up a place where you can come in and pick whatever sports team you like and you can pay me a premium and I'll insure you if they lose.

It's not sports-booking though. No no. It's insurance. So it's legal.

You can make a case the laws need to be changed and you can make a case that it's a poor use of police resources... But these guys are profiting from running a gambling business.

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If you're implying that they were taking a rake on top of charging a membership and/or charging by the hour, you'd be foolish to think they wouldn't have been shut down before now. 1) I doubt any player is going to pay a fee and ALSO have money taken from pots.....that's just dumb. Plus if they started to do this, I'm sure there are plenty of disgruntled players pissed that would've outed them to people that have ties to law enforcement. 2) This place wouldn't have very many customers, when players can go somewhere like Post Oak Poker Room (which a buddy of mine plays in regularly) that doesn't skim off the top.

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That's not what I'm saying at all.

I'm saying that this idea that just because profit wasn't taken in the form of your standard poker "rake" but instead in the form of "membership", "seat rental" and food/drink isn't some bulletproof legal loophole that keeps them above board. They were profiting off of gambling.

You really think stalking the ancillary judge is relevant to this?

This is going to be about the owners' deposits.

Texaggie7nine said:

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ATM9000 said:

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I'm not surprised by this. It wasn't like it was overtly expensive to play there and, when you figure in rent and how much staff they ran, when I went at least, I had a hard time calibrating how an owner would make substantial profits on the operation. I always had a hard time believing any owners would stake a business that is 'meh' from a legal perspective for fairly average returns unless there was some other revenue stream beyond the club fees and food/drink sales.

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My brother runs one about an hour outside of Houston. It's been doing ok. I'm sure he's not raking in money but it's more just a hobby of his that he's making money with. There's no need for shady dealings to keep the payroll and make a little change.

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Yeah... I never said there was illegal activity going on at all of them and if somebody wants to operate and own one... good for them. But what I'm saying is that when things like that open in the middle area of legalities they are also poorly regulated. I find it hard to believe that all of these places that offer average returns would open seemingly overnight everywhere in Texas if there wasn't some other streams of income involved for a lot of them when the risk that the state comes down on them is pretty high at any given moment.

Beyond that and getting into the poor regulatory environment, it is quite easy to launder money in a high stakes poker game... I doubt any of these pop up card rooms do any real vetting of where money comes from or goes to if a group comes in and say 'set a table up for just us'. I'm all for these places and casinos in Texas as long as there is some sort of regulatory landscape to play in... people want to declare how anti-terrorism and human trafficking they are... but you have to realize that one off businesses like this make it incredibly easy for criminals to clean their money and keep their true money sources hidden.

No but looking at public records about the ancillary judge certainly is.

I would assume these operations have a similar model and profit margins to a bar/restaurant and and plenty of those open all over the place and many make average and below average returns.

My point is that people start risky businesses all the time and ultimately take average or below average returns. This does not mean there has to be money laundering or organized crime involved. Restaurants are some of the most risky businesses to start and return for one restaurant is often not great and yet new ones pop up all the time.

While there is increased risk for these poker rooms, if they believe they are within the law, then they see a good market and demand. Once a model exists on the market, it becomes less expensive to open the next one and then next one from a legal and administrative perspective, and other than those additional legal/admin costs, the capital investment is not likely to be much more than typical bar or restaurant and plenty of bars/restaurants throw in the towel and capital investment after 6 months or a year, which would be no different for these establishments if determined to be completely illegal.

Inside all those card rooms? Little bags of heroin.

rosco511 said:

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My point is that people start risky businesses all the time and ultimately take average or below average returns. This does not mean there has to be money laundering or organized crime involved. Restaurants are some of the most risky businesses to start and return for one restaurant is often not great and yet new ones pop up all the time.

While there is increased risk for these poker rooms, if they believe they are within the law, then they see a good market and demand. Once a model exists on the market, it becomes less expensive to open the next one and then next one from a legal and administrative perspective, and other than those additional legal/admin costs, the capital investment is not likely to be much more than typical bar or restaurant and plenty of bars/restaurants throw in the towel and capital investment after 6 months or a year, which would be no different for these establishments if determined to be completely illegal.

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It's WAY different... in the case of these guys, they have a lot of working capital completely frozen in an account... some probably their's and some other people's. What happens to the other people's money? They sue? When a regulatory framework doesn't exist, it is extremely different than what you've laid out because not having that framework cuts both ways. While you work around in a gray area to make money, you also have a bunch of people pissed off that you aren't following the spirit of the law... they'll make their judgments and lock all your assets and put the costs to you to defend yourself even if they have no idea what they are doing. I have no doubt some of these places are laundering money... some of them probably do it unwittingly... but guess what? If it runs through your bank accounts, it is on you.

Consider a scenario that these 2 weren't laundering money and they were prosecuted for something hat there is no local expertise around how to spot money laundering. Guess what? From an end game perspective, it really doesn't matter at... they've just paid the price reputationally, are likely about to get hammered with legal defense costs and have locked their and other people's money up indefinitely. Night and day from just losing a capital investment after 6 months.

Substantially different risk profiles and results of these places are deemed illegal.

If someone approached you with an investment opportunity stating that he was the first person in the history of the state of Texas to figure out why it's legal, would you be a little skeptical? Added bonus, he doesn't need to make money off the games the traditional way in order to turn a profit. Still in?

since the County isn't asking for a TRO, why would they care who the ancillary judge is?

Wasn't this the week they were having that big tournament they've been talking about the last few weeks on 97.5? Seems that might have something to do with the timing since it's a big money event.

I'm sure it did. Slap the management around but also strike fear in the players that you can have your money frozen up if not totally seized.

Texaggie7nine said:

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ATM9000 said:

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I'm not surprised by this. It wasn't like it was overtly expensive to play there and, when you figure in rent and how much staff they ran, when I went at least, I had a hard time calibrating how an owner would make substantial profits on the operation. I always had a hard time believing any owners would stake a business that is 'meh' from a legal perspective for fairly average returns unless there was some other revenue stream beyond the club fees and food/drink sales.

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My brother runs one about an hour outside of Houston. It's been doing ok. I'm sure he's not raking in money but it's more just a hobby of his that he's making money with. There's no need for shady dealings to keep the payroll and make a little change.

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He's doing it wrong. One of my good buddies runs one and makes probably $10k+ per month. Just can't really broadcast it to the mass public and only let people play in it that you trust.

I get the risks involved, but I am still not seeing how this explanation then leads to the conclusion that the only explanation for these popping up across town is that these have to be backed by organized crime or shady people/money, which I believe is what you were stating or insinuating.

How many tables does he usually have going?

rosco511 said:

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I get the risks involved, but I am still not seeing how this explanation then leads to the conclusion that the only explanation for these popping up across town is that these have to be backed by organized crime or shady people/money, which I believe is what you were stating or insinuating.

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When you say one of these places getting shut down is no different than a bar or restaurant failing after 6 months, I'm not sure you really do understand the risks involved.

The point I'm making isn't that ALL of these places are operating and moving money of shady people (though it wouldn't surprise me if most of them are doing so when you add the unwitting). What I'm trying to say is it shouldn't surprise anyone if a lot of these places are laundering money because it is easy to do in their business model and any savvy investor in the gray market like this is going to want better than ok returns.

What I am insinuating is that smart investors in these probably are moving dirty money and have a revenue stream beyond selling food and drinks and renting seats at a table. The others are probably too naive to understand the risks which probably puts more risks on their customers than their customers really understand.