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Old Yesterday, 09:34 PM   #651
FearlessPhil
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Re: Membership-Based Poker in Texas

Quote:
Originally Posted by Bigjohnson View Post
Isn't the seat rental charge just another name for the "rake". Why does paying cash instead of chips make the tips to dealers any less objectionable/ Isn't the gambling house making money because the gambling is taking place? Are not the dealers making money because the gambling is taking place?
I'm not a lawyer and I don't have any inside knowledge about how the people who own these places and their lawyers came to their conclusion about the separation of gaming chips from dealer tips and time chips. The following statement is simply my own thoughts on a logical explanation:

The relevant Texas law contains the the following section:

(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.

Parts one and three are pretty straightforward and these clubs should be able to meet those so Section 2 is where they must prove they should not be prosecuted. In order to do that, you can interpret section 2 as

No person received any economic benefit other than personal winnings from the gambling activity

If the gambling activity is defined as the betting of chips by the players and that gambling activity is conducted with chips that are used strictly for settling the bets between the players then no exchanges of money that don't involve the chips are an economic benefit that is derived from the gambling activity.

Now we can argue forever here about whether or not a judge would accept such a rationale in a trial but it's strictly hot air unless and until one of these clubs is ordered to close and decides to fight it in court. However, I can say one thing for sure. The Gaudio case that is constantly dragged into the discussion by HTwn does NOT preclude such an argument.
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Old Today, 02:31 AM   #652
HTwnPokerGuy
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Re: Membership-Based Poker in Texas

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Originally Posted by BulltexasATM View Post
From the players perspective the bolded is pretty key, plus the opportunity cost of those 4 hours driving to and from LA(what would Hero have been doing during that 4 hour time period he is driving). 2nd, the key question would be if Hero got the same exact cards and played them the exact same way in the scenarios above. He would have $400 still in scenario #1 when he left(lets call it Post Oak Poker Club). In scenario #2 what would he have? My guess would be $350 or less when you factor in the rake/tips coming off the table each hand.

Now if you would have done the same comparison to an underground game in Houston, Hero would have about $150 if he was lucky after rake and insurance are taken off the table, but he at least could save that 4 hour drive
I believe he was asking from a LEGALITY perspective.
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Old Today, 02:40 AM   #653
HTwnPokerGuy
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Re: Membership-Based Poker in Texas

Quote:
Originally Posted by FearlessPhil View Post
I'm not a lawyer and I don't have any inside knowledge about how the people who own these places and their lawyers came to their conclusion about the separation of gaming chips from dealer tips and time chips. The following statement is simply my own thoughts on a logical explanation:

The relevant Texas law contains the the following section:

(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.

Parts one and three are pretty straightforward and these clubs should be able to meet those so Section 2 is where they must prove they should not be prosecuted. In order to do that, you can interpret section 2 as

No person received any economic benefit other than personal winnings from the gambling activity

If the gambling activity is defined as the betting of chips by the players and that gambling activity is conducted with chips that are used strictly for settling the bets between the players then no exchanges of money that don't involve the chips are an economic benefit that is derived from the gambling activity.

Now we can argue forever here about whether or not a judge would accept such a rationale in a trial but it's strictly hot air unless and until one of these clubs is ordered to close and decides to fight it in court. However, I can say one thing for sure. The Gaudio case that is constantly dragged into the discussion by HTwn does NOT preclude such an argument.
The most interesting thing about Gaudio is that it shows you how the court will reason through a question about tips, namely:
1. First they will look at it on a plain language basis...what does the statute say?
2. If, and only if, they conclude it's confusing will they look at other stuff like the practice commentary, etc, to get at what the Legislature intended when they made the law.

With either approach, though, how to you going to argue the tips aren't from gambling activity? Players tip only after they win a hand, and whatever undercover officer is the witness in the court case on this is going to see this happen repeatedly and testify that's how it went down.

Last edited by HTwnPokerGuy; Today at 02:45 AM.
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Old Today, 02:49 AM   #654
HTwnPokerGuy
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Re: Membership-Based Poker in Texas

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Originally Posted by Bigjohnson View Post
Consider these 2 scenarios.

1. Hero goes to membership based private club in Houston to play poker with $500 in his pocket. He pays his $15 for his daily membership, buys 8 timecards for $60 and takes $25 for tips for the dealers. He uses the remaining $400 for gaming chips. He plays poker for 4 hours and has an exactly breakeven session (he tips the dealers $25 during his 4 hour session) at which time he leaves the club with $400. Net loss is $100.

2. Hero goes to a casino in Louisiana, Oklahoma, New Mexico with $500 in his pocket. He buys $500 in gaming chips, plays for 4 hours and leaves with $400 in his pocket. Net loss is $100

Other than the expense of driving several hours, gasoline, tires, etc., is there any difference between the 2 results? Isn't the seat rental charge just another name for the "rake". Why does paying cash instead of chips make the tips to dealers any less objectionable/ Isn't the gambling house making money because the gambling is taking place? Are not the dealers making money because the gambling is taking place?
These are good questions. Even the wikipedia page for rake includes a description of time collection as rake. It seems like it would be pretty easy for a prosecutor to argue that a "seat charge" or a "club access fee" you have to pay to play poker is rake.
https://en.wikipedia.org/wiki/Rake_(poker)
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Old Today, 09:03 AM   #655
FearlessPhil
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Re: Membership-Based Poker in Texas

Quote:
Originally Posted by HTwnPokerGuy View Post
The most interesting thing about Gaudio is that it shows you how the court will reason through a question about tips, namely:
1. First they will look at it on a plain language basis...what does the statute say?
2. If, and only if, they conclude it's confusing will they look at other stuff like the practice commentary, etc, to get at what the Legislature intended when they made the law.

With either approach, though, how to you going to argue the tips aren't from gambling activity? Players tip only after they win a hand, and whatever undercover officer is the witness in the court case on this is going to see this happen repeatedly and testify that's how it went down.
That's a real softball, HTwn. If you've ever played poker, you will know that tips are not paid "only after they win a hand". In any case, the dealers are tipped for "dealing well". That may be defined by players as dealing them a winning hand or they may have some other definition. The dealers are profiting from dealing not from gambling.
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Old Today, 01:21 PM   #656
HTwnPokerGuy
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Re: Membership-Based Poker in Texas

Quote:
Originally Posted by FearlessPhil View Post
That's a real softball, HTwn. If you've ever played poker, you will know that tips are not paid "only after they win a hand". In any case, the dealers are tipped for "dealing well". That may be defined by players as dealing them a winning hand or they may have some other definition. The dealers are profiting from dealing not from gambling.
Is it a softball? How do you separate the act of dealing from gambling activity? It seems like it's a fundamental part. If there's no dealing, then no gambling at poker can occur.

Is this something someone cooked up after a few drinks, or is it based on on something in the Penal Code or case law?
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Old Today, 06:09 PM   #657
tangram16
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Re: Membership-Based Poker in Texas

Quote:
Originally Posted by HTwnPokerGuy View Post
To read the case, you most likely need to have a subscription to one of the legal research services like LexisNexis or Westlaw. Sometimes you can google the case names and find a free version online, but I haven't been able to find one. The citation is: Gaudio v. State, No. 05-91-01862-CR, 1994 Tex. App. WL 67733 (Tex.App.—Dallas, 1994) if you have someone that can pull it for you.

The argument that economic benefit only applies with chips on the felt and that keeping tip money separate matters is a faulty one. Courts typically first read and interpret statutes on a plain language basis, and "no person received any economic benefit other than personal winnings" doesn't describe any dividing line between the felt and the rest of the world. Gaudio vs. State certainly doesn't spend time examining whether or not tips were paid with poker chips or dollar bills. These poor club owners should ask for their money back from whoever told them that matters.

BUT NONE OF THIS REALLY MATTERS. The key thing all these club owners miss is that 47.03 doesn't have an affirmative defense at all. So, the economic benefit, private club, equal chance of winning stuff in 47.02 and 47.04 doesn't come into play at all.

All the DA needs to prove is that someone operated OR made money off a gambling place...with a "gambling place" defined as a place where bets are made...with "bets" defined as an agreement to win or lose something of value with any kind of chance involved. A Texas Attorney General Opinion has already found that poker involves "bets" and that places where poker are played are "gambling places." This you CAN lookup for free on the internet. The citation is Tex. Att’y Gen Op. No. GA-0335 (2005).

The lack of affirmative defense is a key reason why DA's across the state typically prosecute gambling under 47.03 instead of 47.02 or 47.04...even the rooms that try to say they are private clubs, etc. These prosecutors don't have to mess with affirmative defense arguments.
I practice in a jurisdiction outside of Texas. What the game runners are trying to do is distinguish an indirect economic benefit from a direct economic one.

Unfortunately, IMO, not only is there nothing in the legislative history of the statute that would indicate intent to do so, the practice guide is explicit: the statutory scheme is clear, 47.01 et seq is clearly to proscribe all gambling businesses. Masking it under the guise of a "private social club" doesn't change anything. Moreover, the statute proscribes any economic benefit.

Look, I get paid, and paid very well, to find the cracks in statutes and hammer it from there. I've been looking at this one for almost 3 years now, and IMO it's very well written and on the economic benefit issue, pretty much bulletproof.

IIRC, there was a link to Gaudio on SIGH's website. I did see it somewhere and read the case.

Last edited by tangram16; Today at 06:29 PM.
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Old Today, 06:55 PM   #658
michelle227
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Join Date: Jul 2007
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Posts: 1,104
Re: Membership-Based Poker in Texas

And the circle repeats...someone who does NOT practice in Texas returns to make the same basic post they did six weeks ago.

As to the link to Gaudio...I put it on this very website during October. I had also pointed out that one of them thar hi'falutin' subscriptions was not even required...even the masses have access to Texas appellate Opinions issued across much of the past two decades (and some even older than that).

I still keep waiting for these magical arrests that HTPG keeps insisting are just around the corner to occur so we can quickly see the dismissal of prosecution...he overlooks that Lester Blizzard failed miserably at getting convictions when he was a prosecutor in Harris County in the other cases HTPG has linked. Money even had to be RETURNED to defendants in those game room cases...
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Old Today, 07:23 PM   #659
sdwhitt
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Join Date: Sep 2014
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Re: Membership-Based Poker in Texas

This topic is 27 pages long. I’d be willing to be only 10 deals with the clubs, rest is arguing over what’s legal or not.
We get it.
How is Kings & Cards doing now that Prime opened?
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Old Today, 08:19 PM   #660
BulltexasATM
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Re: Membership-Based Poker in Texas

Quote:
Originally Posted by sdwhitt View Post
This topic is 27 pages long. I’d be willing to be only 10 deals with the clubs, rest is arguing over what’s legal or not.
We get it.
How is Kings & Cards doing now that Prime opened?
Agree! This thread should be about the clubs, how the games are, etc. HTown really mucked it up.

Kings &cards still posts every day on FB. Appears to focused on small but in tourneys.
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Old Today, 09:01 PM   #661
LeGrosB
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Join Date: Aug 2006
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Re: Membership-Based Poker in Texas

It should be pretty clear by now that some jurisdictions are going to allow these clubs to operate and some will not under the current law. Until and if the law is changed, what is the purpose of further discussion?

By the way, Kojacks Poker Club in Midland is highly recommended. See website for tournament schedule. Running single table satellites for a $500/entry 30K guarantee in May. 1/3, 2/5 NL run regularly, sometimes PLO or PLO hi/lo or even 5 card PLO Big Mitt hi/lo. Very friendly staff, nice place, security provided.

Last edited by LeGrosB; Today at 09:02 PM. Reason: punctuation
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