Man Pleads Guilty To Laundering $21M In Lyford, TX, Illegal Gaming Operation

Written By Aleeyah Jadavji on February 26, 2023 - Last Updated on March 2, 2023
Lyford man pleads guilty in Illegal gaming operation that took in $21M

Rene Gamez Jr. intends to plead guilty to taking in a staggering $21 million while running an illegal game room in Lyford, Texas, a town of 2,100 people. He is facing eight counts for operating the El Toro Game Room

Gamez allegedly worked with Dominga Ledesma, owner of Brittany’s Boutique, which was right across the street. She faces 16 counts in the scheme. The operation allegedly took place between May 2017 and October 2018.

According to the criminal complaint put forward last September, “Gamez and Dominga Ledesma created an indirect payout system for the game room customers utilizing trinkets of silver or silver pellets.”

Lyford game room ordinance allows eight-liners with permit or license

Unregulated game rooms housing eight-liner slot machines are illegal in Texas. In fact, Texas online and retail casinos are illegal. The only exception is a few tribal casinos.

In Lyford, however, there is a game room ordinance regulating “the exhibition, display, location and operation of skill or pleasure coin-operated machines.” These are also known as eight-liners.

A permit must be obtained for up to two machines. If a premise has more than two machines, it must obtain a license. There cannot be more than six eight-liners operating at once within the city of Lyford. The cost for a permit is $50,000 per year per premise. 

Owners also cannot have any of these slot machines within 300 feet of a school, church, daycare, hospital or residence. The minimum age to play or operate an eight-liner is 18 years old. No game room can operate the machines for profit or outside the following hours:

  • Monday through Wednesday: noon to 12 a.m.
  • Thursday through Sunday: 10 a.m. to 2 a.m.

Gamez used ‘fuzzy animal exception’ to skirt the law

There may be an ordinance in place to allow the operation of eight-liners, but the law also states that no establishment is allowed to pay out cash prizes. That is unless the prize falls under the “fuzzy animal exception.” This is described as a prize “that rewards the player … from a single play of the game or device of not more than 10 times the amount charged to play the game or device once, or $5, whichever amount is less.”

As an example, if someone plays a machine by placing a 30-cent bet and they win $4, it is a crime if they are paid out because the amount is more than 10 times the bet. This is considered a Class A misdemeanor for possession of a gambling device. The punishment can be up to a year in jail along with a fine of up to $4,000.

An alternative is to pay customers with non-monetary prizes that are worth less than $5.

This is exactly how Gamez attempted to bend the rules. He would pay his customers with small silver pellets. They would then walk across the street and exchange them for cash at Ledesma’s shop, which is known to deal in precious metals.

IRS reporting triggered a deeper look into the operation

Gamez and Ledesma allegedly went through a lot of trouble to dodge the authorities. This included disguising the actual owner of El Toro.

When making a cash transaction of more than $10,000, the law requires patrons to fill out FinCen Form 8300, which is then submitted to the IRS and the Financial Crimes Enforcement Network (FinCen)

Gamez allegedly used the name of a deceased elderly man as the owner of El Toro. Later on, he was accused of paying someone to act as owner. A witness told investigators that Gamez paid $1,000 a month to use their identity on the forms. All of this was to avoid being tied to collecting illegal sources of income.

Additionally, Gamez allegedly got permits for the eight-liners by registering them to several different people. 

Gamez is facing three counts of aggravated identity theft, three counts of structuring financial documents to evade reporting requirements and two counts of unlawful use of identification.

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Aleeyah Jadavji

Aleeyah hails from Toronto, Ontario in Canada and has been working predominantly in the poker industry since 2015. From writing articles, to interviewing big winners and live reporting on poker's biggest stages, she's seen it all. She currently covers legal gaming's legislative pathway for PlayTexas. Aleeyah loves to cook and create content to showcase her passion for food and travel. She also loves sriracha, and doesn't trust anyone that believes it's not a top-tier condiment.

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