I still disagree. The owners would still "benefit."

The hourly seat fees, daily, monthly membo fees, tourney fees, coffee fees, any food fees are all benefits derived from non player winnings.

No way around that part of the statute.

Just curious / not sure if relevant, but... in the successful Ohio rooms:

• daily fee is taken to pay for services at the 'club' that day
• no rake - ever - from cash pots or tourneys (besides bbj etc)
• all dealers are 'volunteers' / work for tips
• all snacks/drinks are part of the daily fee

It sounds like in TX these clubs do rake pots and 'employ' dealers..? Our clubs are always very strict about zero rake...

(I think - like TX - these have been shuttered in some localities in OH, but they exist in most of the bigger cities)

Y'all are barking up the wrong trees. Our resident legal expert (Michelle) is very convincing in establishing that it is highly unlikely these charges stick (a combination of prior history and the law itself). Doesn't really matter: just the raid and seizure will, effectively, kill the rooms; and the future threat of raid and seizure will be a significant deterrent to future public rooms (both from ownership and players perspectives).

In the left corner, representing the four charged Post Oak Poker Club defendants and who runs extremely good against Harris County prosecutors.....CHIIIIIIIIIIPPPPPPP Lewwwwwwwwwis.

Some of you may remember Chip as being part of the team that represented Robert Durst in the Galveston case where it had been alleged that he murdered his neighbor. He's got skills...

Nobody is listed yet as being on record for the Prime Social Club defendants.

Still no charges appearing in the database against either Mary Switzer or Kevin Chodrow

As of yesterday, there are no federal charges showing in PACER, so not sure where you are pulling RICO from. And there are no State charges at the moment for the EOCA. It is alleged as an element of the money laundering allegation, but has not been charged as a standalone offense.

And anyone who puts faith in the quality of a case because of Art being involved has not been paying attention to the ****show that is the Houston Police Department. Art has a LOT of dirty cops and this is part of why he blew the deadline on getting the report to the DA for the botched Harding Street raid that left two innocent people dead after a warrant was based upon fabricated claims...with the officers then attempting to cover their collective asses (which is why efforts are being made to get not only the cell phones but also the desktops used by the officers at the HPD office to which they worked out of. Oh yeah, and that was the same incident that has now led directly to the dismissal of many cases simply because the officers are not credible...with several appeals ALSO in the works in cases where convictions had been obtained based upon alleged confidential informants.

As noted time and again, the HC DAO does NOT have a good track record when they stray from their lane in game-room cases. They have had to return funds time and again. Granted, in this case, the defendants will still collectively be more than a half-mil lighter due to costs of defending themselves in this matter as well as the nuisance claim. Chip Lewis ain't cheap...

This isn't really true. There are 5 ways someone can be charged with "gambling promotion":

1) Operates or participates in the earnings of a gambling place.
2) Engages in bookmaking.
3) For gain, becomes a custodian of anything of value bet or to be bet (paid escrow, for example.)
4) sells chances on the partial or final result of or on the margin of victory in any game or contest or on the performance of any participant in any game or contest or on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or
5) for gain, sets up or promotes any lottery or sells or offers to sell or knowingly possesses for transfer, or transfers any card, stub, ticket, check, or other device designed to serve as evidence of participation in any lottery.

Clearly, #1 is what they are alleging here. "Gambling place" is defined in Penal Code 47.04, and that statute DOES include the exact same affirmative defense.

I'm guessing they are arguing the felony is PC 71.02, Organized Criminal Activity, which includes Class A misdemeanors related to gambling.

Reasonable people can disagree over where the line is about "economic benefits occurring from the gambling." Obviously, raking a pot counts. But there are lots of potential gray areas:

1) The Texas Card House "membership and access fees model"
2) A bar hosting a poker tourney, charging nothing. The patrons that come in buy food and drinks. Economic benefit?
3) Does 7-11 receive economic benefit from gambling when I go buy a pack of cards from them to host a poker tourney?
4) What if I rent a house, solely for the purpose of holding an unraked poker game? Does the owner of the house to whom I pay rent "derive economic benefit" from the gambling?

The Texas clubs that I am familiar with do employ dealers, but do not rake pots.

There's a pretty clear common sense distinction, no? Even if we just talk about the TCH model from Prime/Post Oak, the difference between a poker room, bar with a poker tourney, and a 7-11 is the underlying purpose of the business and can be objectively quantified in their revenue. If over 99% of the revenue for a business is generated through poker "seat fees", that's a fairly obvious difference from a bar hosting a microstakes poker tournament once a week amidst Harry Potter trivia nights and karaoke.

What these club owners failed to understand is that there was a big difference between TCH, which was opened in the outskirts of Austin (not even technically in Austin), and Prime/Post Oak opening huge clubs in the middle of Westheimer with radio and billboard ads. Their hubris and stupidity made this outcome entirely predictable, and very well could ruin the model for the entire state.

"common sense distinctions" are pretty tough when we are talking about interpreting a statute that is now the basis for first-degree felonies.

OK, I run a business that solely sells playing cards to unraked poker games. Does that make them illegal? 100% of my revenue is tied to gambling.

The point is the ripples of "economic benefit" go a long way, and it makes a lot more sense to have it be a bright-line rule of "taking money out of the gambling proceeds" rather than whatever DA has a bug up their ass decides it means when they decide to ruin people's lives.

EDIT to add: Also keep in mind, I'm not saying the 7-11 is doing something illegal by selling the cards. The question is "Does anyone gain economic benefit from gambling?" If I am hosting a poker tourney, and we buy cards from 7-11, that is a purchase that doesn't occur without gambling. So the issue wouldn't be "Is 7-11 in trouble" it is "Is my game now illegal because someone got economic benefit based on the gambling?" I agree that the benefit is too remote. What if I buy a poker table from a company that does nothing but sell poker tables? They now benefit economically from my rake-free gambling. Their entire business model is making those type of sales. Are we really going to say that my home game is illegal if I buy a poker table? No, so where do we draw the line? The common sense answer is "taking a cut of the money being gambled."

Has anyone heard, or care to speculate, about what will happen to player's boxes? Haven't seen it mentioned yet.

Why the defendants can’t win?
Starting at 3:10

https://youtu.be/CkQEWktX8lU

Oh look! Someone finally gets it. There IS NO AFFIRMATIVE DEFENSE for Gambling Promotion. When the DA has busted underground rooms in the past in Harris County, they point to 1 AND 3 above when they charge them with gambling promotion. They ignore the affirmative defense topics like public vs. private, equal chance of winning, etc. That's not going to change here.

A "gambling place" has a specific definition in the code...it's anywhere where bets take place. A "bet" also has a specific definition. Prime and POPC both had bets take place inside their locations. Membership fees, door fees, seat fees, etc. are all earnings. Even if you want to argue there are no earnings. Someone still "operates" the places. Guilty.

Both Prime and POPC changed money into chips...and held that money while the chips were bet. While this occurred they gained from all the fees. Guilty.

Someone tell us who these terrible attorneys were that advised Prime and POPC that their model is okay. I'd like to add them, alongside Michelle's name, to the list of clueless attorneys no one should ever hire.

Wait what? I specifically said that #1 under Gambling Promotion DOES include the affirmative defense. A place isn't a "gambling place" if the gambling occurring there meets the 3-pronged test. Reasonable minds differ on whether the gambling occurring at Prime and POPC met that test.

#3 doesn't apply because they didn't gain by being the custodian. Mayyyyybe you could make a case that safety deposit boxes holding players chips apply if they charged for the deposit box. #3 would apply if, for example, we bet each other $1,000 on whether or not these guys get convicted. Michelle holds our $2,000 as escrow, and keeps $200 as an escrow fee. She would be guilty of gambling promotion.

For underground rooms, those places usually loan the degen monies at interest. Advancing credit to gamble and charging interest on that credit would apply to #3.

Upps I misunderstood your stance, sorry. There's a Texas criminal appeals court case, Baxter v. State, that already found that "“Affirmative defenses such as these provided for in Sections 47.02 and 47.04 are not applicable to Section 47.03.” So no...no affirmative defense for 47.03 gambling promotion.

Besides "gambling place" is specifically defined in the code...47.01(3)...as "means any real estate, building, room, tent, vehicle, boat, or other property whatsoever, one of the uses of which is the making or settling of bets, bookmaking, or the conducting of a lottery or the playing of gambling devices." No mention of an affirmative defense or even the word "gambling" as it applies to poker.

If you want to argue poker doesn't involve "bets"...good luck. The definition in 47.01(1) is "means an agreement to win or lose something of value solely or partially by chance." Check out the Texas Attorney General Opinion GA-0335 where the argument that poker involves bets is made: https://www.tabc.state.tx.us/laws/poker/OAGga0335.pdf

Take a look a the civil case filings...they're clearly going to argue that all the fees are gain and earnings.

^^these are the arguments Chip Lewis, etc is going to have to counter to prevail. Best of luck.

The affirmative defense doesn't apply across the board to Sec. 47.03. But for the specific type of offense under gambling promotion of "particpating in the earnings of a gambling place" it does. You can't participate in the earnings of a gambling place if there isn't a gambling place. 47.04 says it isn't a gambling place if the 3 pronged test applies to the gambling.

EDIT to add: It isn't phrased in the statute as an affirmative defense to 47.03, but it would make 47.03(a)(1) not applicable. The difference between 47.03(a)(1) and 47.04 is just that 47.03(a)(1) requires the person to make money, and 47.04 requires the person to own or have possession of the property.

The way you are reading it, if I host a no-rake poker tourney at my house and win, I am in violation of 47.03(a)(1). Nope.

The situation in Baxter was the defendant was acting as the house backing dice gambling. The gambling there was absolutely obviously illegal gambling, making his property a "gambling place." Baxter was trying to argue the jury should have been charged on lesser included offenses on 47.02 and 47.04. I agree he was wrong on that point. This is not in any way binding authority on whether a place is a "gambling place" if the gambling that occurs there complies with Secs. 47.04. Additionally, it is a Court of Appeals case, not a Court of Criminal Appeals case, meaning it is binding only on counties in that district (which doesn't include Harris County).

I don't think the court is going to look to 47.04 to consider 47.03. My understanding is that they're go to the definitions in the code, and where things are undefined, to use common sense definitions of the words. 47.04 doesn't define "gambling place." 47.01 does. Don't be fooled just because the section title for 47.04 contains the words "Gambling Place."

My understanding (as an attorney who has been employed for a decade and a half teaching judges how to read and interpret the law) is that you have to read laws together in harmony.

Your reading literally makes 47.02 meaningless. The player who wins money in a legal poker game would always be guilty of gambling promoting bc they are always sharing in earnings of a gambling place. For the statutes to co-exist, a gambling place had to be one where illegal gambling occurs, not all gambling.

This is a really good discussion, and I think guilty or not guilty sits right here on how this gets interpreted.

You're basically arguing that not considering the affirmative defense in 47.04 would lead to absurd outcomes the Legislature did not intend in 47.03. However, if you then take a look at legislative intent for 47.03...and go to the Practice Commentary, for example...you'll see this section is targeted at commercial gambling, but that commercial gambling is described as in part “charging the other participants for use of the facilities or equipment.”

Seat charges, access fees, etc charged by these clubs seem to clearly fit this, no?

I would argue that in the case where you hosted a home tourney, won, but charged nothing for use of the facilities or equipment, you'd be fine and not in violation of 47.03.

LOL at the reliance upon Baxter. The argument fails just as miserably here as it did the last time HtownSIGHShill was schooled on it.

Very large distinctions, to include the fact that Baxter dealt with a craps game I noted that you never bothered to reply to me way back in January of last year https://forumserver.twoplustwo.com/s...&postcount=470

I guess your handlers never bothered to tell you how to reply...

The statutes are written for gambling as a whole. There aren't different statutes for craps and poker. It's silly to dismiss this just because it involves a different type of gambling.

Michelle, you like to crap on SIGH, but they're the only one's who've published a thoughtful examination of all this stuff. You claimed it would never get to this, but here we are...the two biggest clubs shut down for what appears to be gambling promotion, organized crime, money laundering, and what might include federal racketeering. Sorry, but your credibility is totally shot with me.

I get that you think the DA's office sucks, all the charges haven't been filed yet, they'll probably get deferred adjudication, etc. But, when you're examining this business model as a whole, you have to actually look for some sense of how these laws are going to get interpreted on appeal, etc.

I guarantee you Bill Heuer, Kebort, Maddox, etc are all having very angry conversations with the attorneys who told them they were totally fine and to feel free to go all over TV and in front of City Council, etc and claim they're 100% legal. Clearly they...and you...missed something. Or a lot of somethings.

When you do case analysis, you don't take a snippet that you think backs your position. Relying on Baxter in ANY manner was fatally flawed analysis given that it dealt with what was clearly illegal gambling at multiple levels. When you cherry pick a line, you are no different than the convicts that try to file writs citing a line from some dissent in an Opinion authored 93 years ago (yes, this occurs on a regular basis).

Nobody, including myself, ever said there was no risk of arrest. What I WILL continue to stand by is that, under Texas law and as presently now before the Court, there will not be a conviction.

Gambling promotion? No pending charge. Organized Crime? No pending charge. Money Laundering? Yes, but with no indictments yet and with an attorney that would not be involved if he believed this was a case where funds were not going to be returned.

It is ALSO the same approach that the HC DAO has tried against the 8-liner operators and failed miserably. Again, something that your handlers have never addressed. Funny how the headlines never exist when a case is dismissed and funds are returned to their owner (from whom they should never have been seized in the first place).

IF there are federal charges that come about, it will be for something BEYOND what is addressed in the Texas statutes and that is BEYOND anything that has been discussed in ANY of the Texas-specific threads. And THAT would be on them. I would certainly hope that, with what we know about taxes being paid as required under various labor laws, that the rest of the books were in good order. But if there was some manner of illegal activity such as drugs or bookmaking that went on, that is an indictment of managerial operations, not the model under which poker was being played.

And the best road map is the regular dismissals of felony charges against the 8-liner operators.

Angry and frustrated? Sure. But not at the counsel regarding the model that was being used in Texas for the above-ground rooms. Their anger is going to be directed, I am reasonably certain, at the agencies that will eventually be directed by a court to return their funds and their computers and whatever else was taken during the raid. Sadly, there will be no recompense for the dignity that comes with being perp-walked even when you are ultimately vindicated.

They WILL be happy that we finally get a ruling from the Courts on the matter that there was no gambling in a manner contrary to law.

There is a certain irony in the fact that the civil suit filed by the County actually proves up that this was all occurring in a private place that required payment of a membership fee and that chips were received for precisely the amount of money exchanged at the cage and that food and beverage was available for patrons.

And YES, that IS something that was being discussed around the courthouse complex today...

There is more than one owner of Prime Social. There are several. So, how did they evade getting charged, arrested? By not having any known or available public association with Maddox(one of the owners), and skimming straight cash, and then washing it with other unrelated businesses? Pretty smart to have that foreknowledge...

Well, let's see some of these. Here are the first three that popped up in my google search...

1. Hao Nguyen. First he dodged an organized crime charge, but they got him on the money laundering charge. He took deferred adjudication and forfeited a six-figure amount of money.
Story: https://www.chron.com/news/houston-t...ng-6543227.php
Case #: 151571901010-3

2. Tim Vo. The ringleader for all the recent Chinatown busts. Case is still active...still facing a money laundering charge.
Story: https://abc13.com/2-hpd-officers-amo...sting/3273303/
Case #: 157889901010-3

3. Melvin Askew. Got a year for money laundering and gave up $600,000.
Story: https://www.chron.com/news/houston-texas/article/Man-to-be-sentenced-for-laundering-proceeds-of-12552294.php

Hello first-time poster with an axe to grind!

Not that smart. I can think of at least one person...Asian guy...who's been all over social media claiming to be an owner for a long while.

Maddox is the only owner on the state filings for the Bayou Social Club entity that owns Prime.

The police took a bunch of records, and the feds are apparently involved. I don't like the off-book owners' chances.

Good to hear, Chip is top notch. A two-word verdict here plus HB 2669 getting support can mean amazing things moving forward.

They dont even have to indict it. They will all plead pre indictment or preliminary hearing. Watch. The rooms will not reopen. The cost to defend this require a war chest and in my opinion a loser case.

Based on the statute alone they are fried fish and yes, all officials involved are pure grease.

I heard words like money laundering which is always followed by racketeering which is always filed by RICO. Rest assured, when/if indictments fly they will be massively heavy handed and well constructed.