For a South Texas town of around 7,000 residents, Elsa has made a name for itself in the statewide discussion around eight-liner game rooms. And despite the saying that all publicity is good publicity, its most recent publicity is not all that good.
Last week, Homeland Security Investigations agents raided two Elsa game rooms, Sizzling Sevens and The Lucky Hive. That same day, they served a search warrant at Elsa City Hall.
The raids came from a federal investigation into money laundering. The city and Hidalgo County Sheriff’s Office said they will cooperate with federal agents as the investigation continues.
Local ordinance doesn’t provide immunity
By state law, it is illegal to operate or play at commercial casinos in Texas despite most Texans supporting them. There are three Texas tribal casinos, including the Kickapoo Lucky Eagle Casino, also located in South Texas. Illegal gambling rooms have opened up throughout the state in casinos’ absence and continue to operate despite local and state efforts to shut them down.
Residents and local officials in small towns like Elsa, however, support these rooms, the boosted revenue and the foot traffic they attract.
In September, Elsa passed an ordinance to allow eight-liner game rooms. It required all rooms to pay a one-time $50,000 application fee. The town also set a cap on five licenses, effectively allowing it to regulate its local gaming economy.
Of course, these rooms remain illegal at the state level. In theory, Elsa hoped these actions would create conditions where its room owners operated legitimately and could avoid state or federal attention.
That, regrettably, did not happen in practice. It’s hard to fly under the radar when the feds suspect your gambling business is engaging in money laundering.
The crackdowns continue on illegal gambling rooms
Whether or not the ordinance played a part, Elsa remained off the list of game rooms to raid until recently. In late September, sheriff’s deputies raided Sizzling Sevens and charged several employees with organized criminal activities.
In early October, deputies descended on Tejano Treasures in neighboring Edcouch. The FBI came to town two weeks later, serving a search warrant to gain access to all gaming permit records.
After Edcouch’s incident, Elsa contacted federal agents to let them know they would provide all related records if requested. City Attorney Gus Acevedo said his team had already anticipated an investigation into Sizzling Sevens and had begun compiling all relevant material.
These two busts were not isolated incidents across South Texas, either. Illegal gambling raids in September and in October occurred in Andrews, Bastrop, Bexar County, Houston, Port Arthur, Sullivan City, Tomball and Vidor.
Illegal game room operators should expect raids to continue for the foreseeable future.
Will legal gambling come to Texas?
The 2023 Texas legislative session ended in May with all efforts falling short to legalize mobile sports betting and resort-style casinos. However, each separate bill made progress, leaving hope that success will come in 2025.
House Bill 1942, which proposed legal online sports betting in Texas, passed a House vote before stalling out in the Senate. Meanwhile, casino gaming support has grown from influential sports figures, like Dallas Mavericks owner Mark Cuban and Houston Rockets owner Tilman Fertitta.
Fertitta also owns eight Golden Nugget casinos in seven states, including one in Lake Charles, LA.
All that said, legalizing casinos and sports betting would not eradicate illegal gambling rooms. States with legal gambling options, like Pennsylvania, Missouri and Florida, have more than their fair share of “skills games” issues to deal with.
Efforts to shut down illegal rooms will continue with or without legal Texas casinos and sports betting. But a legal, regulated gambling industry would bring billions of dollars to local Texas economies every year.
And provide more resources to law enforcement to shut down the bad actors.
