Supporters of legal gambling in Texas and card room operators were shocked when they first read state Rep. Gene Wu’s House Bill 732. The measure seeks to change the wording “private place” to “private residence” in Texas’ law on card rooms.
On its surface, it would essentially shutter the dozens of poker rooms scattered across the state.
But Wu, who supports legal gambling in Texas, doesn’t want to see any legitimate businesses close. In wording erroneously omitted when the bill was filed, it spelled out that each county would have authority over Texas card rooms, not the state. The bill would also apply to game rooms that house eight-liner slot machines. Their legality would also be up to individual counties.
Card rooms and game rooms operate under loopholes in the law
As one of the strictest states in terms of gambling laws, Texas does have some exceptions for wagering activities that are still allowed. Horse racing and dog racing are permitted in the state, as is the lottery and some low-stakes bingo games.
“Legal” card rooms in Texas operate as private clubs. They require membership fees instead of taking a cut of winnings. Operators believe this makes them legal under state law.
Game rooms, on the other hand, do not typically operate out in the open. Some cities and counties have created ordinances to allow them, but they often are found hidden “behind” legitimate businesses or tucked away in residential areas. Sometimes, they call themselves arcades.
A Texas court has ruled that game rooms that give cash winnings above $5 are illegal. Law enforcement routinely raids suspected businesses housing illegal gaming. These game rooms also attract criminal activity and are at high risk for robberies.
Wu aims to tackle poker rooms and game rooms with his proposed legislation.
Houston Democrat has a passion for fighting crime and aiding youth
Wu is a Houston-based Democrat who has served in the Texas House of Representatives since 2013.
The former prosecutor focused on improving the lives of children in Texas throughout his first four terms, including supporting justice for juveniles and fighting the school-to-prison pipeline. He currently serves on the Appropriations and Juvenile Justice and Family Issues committees.
Given his strong support for legalizing gambling and his support of youth, Wu will likely make the case for gambling tax revenue to go toward education.
Wu’s also passionate about making Houston-area neighborhoods safer. He authored House Bill 2842, which establishes punishments for people engaging in organized criminal activity, and other legislation aimed at cleaning up the streets.
Wu has a history of gambling legislation and interest. In 2020, he proposed House Bill 770, a measure that would classify poker as a game of skill rather than chance and regulate poker in large counties. That bill never progressed. Wu has said that legalizing gambling across Texas would be difficult, if not impossible, given the state’s longstanding anti-gambling stance.
He thinks, however, that sports betting might have a chance.
Regulations in Houston shut down legal game rooms in 2015
Legal game rooms in Houston have been shuttered since 2015. Harris County commissioners passed regulations that added an application process for new game rooms and increased inspection requirements for existing ones.
At that time, there were around 13 game rooms in the county. After a few of them opted to close because of the new regulations, nine remained open, but they were soon shut down by law enforcement for operating illegally.
Other counties in Texas have game rooms that still legally operate. The state collects a $60 tax on each gaming machine annually. It has taken in around $10 million annually over the past several years.
Wu wants county leaders to decide whether they want game rooms in their area. He believes eliminating the loopholes on game rooms and card rooms will ultimately make Texas a more gambling-friendly state.
“We’re supportive of full legalized gambling across the state,” he told pokernews.com recently.
Wu’s purpose in filing game room legislation
While legal game rooms disappeared in Harris County after 2015, illegal ones continue to operate. In 2022, law enforcement in Harris County executed 23 warrants against suspected illegal game rooms and made 31 arrests, according to the Houston Chronicle.
The illegal operations and the violent crimes connected to them stem from gambling being an illegal activity in Texas, Wu believes. Wu told the Chronicle that creating a path for legalization will reduce illegal activity and crime.
“As long as prohibition exists, you create an incentive for organized criminal activity,” Wu said. “It’s no different from alcohol or drugs. As long as the state doesn’t make regulations, it becomes lucrative to those that cater to those that still want to do it.”
Wu is optimistic HB 732 will make it through the Texas Capitol this session. He thinks there’s consensus over clearing up the confusion of Texas’ laws on card and game rooms. He’s less optimistic about Sen. Carol Alvarado’s legislation to legalize casinos in Texas.
The legality of card rooms in Texas is also being tested in the courts. The Texas Supreme Court could ultimately decide the issue.