Poker Rooms Houston News
The saga of the city of Houston and itspoker clubs has to be one of the top stories of 2019. With arrests made andallegations of illegal money laundering, it seemed as if law enforcement hadthe upper hand. With the collapse of the case against those clubs, however, itis now pulling back the curtain on the legal system in Houston and thepoliticians and attorneys who were involved and roiling the political system.
Last Wednesday, authorities in Houston, Texas raided two poker rooms and arrested a total of nine people that were reportedly engaging in poker-related malpractices. Prime Social Club and Post Oak Poker Club, the two poker rooms were some of the operations that had been under a two-year vice probe that sought to uncover a multi-billion-dollar. The card rooms that are popping up in Texas are private clubs that provide rake-free poker games, as well as bridge, backgammon, chess, and beyond. Instead of a rake, which would make the game illegal per the Texas Penal Code cited above, the clubs charge membership fees, and in some cases seat rentals.
Latest Actions Affecting Texas Politics
After learning that an advisor, AmirMireskandari, to Houston District Attorney Kim Ugg had been involved with two Houstonpoker clubs – the Post Oak Poker Club and the Prime Social Poker Club – chargeshad to be dropped by Ugg because of a conflict of interest. According toreports, Mireskandari allegedly was paid a fee to write legislation that would easethe way for the two businesses to become legally licensed in the city for theiroperations. While Mireskandari continues to deny these allegations, otherpeople in the Texas political scene are feeling the heat from their associationswith Mireskandari.
Accordingto reports from the Houston Chronicle and reporter Zach Despart, Mireskandariwas a prominent booster in campaigns for several Democratic politicians in thecity and county. Such people as Harris County Judge Lina Hidalgo, Harris CountyCommissioner Adrian Garcia, Texas Attorney General candidate Justin Nelson andothers were introduced by Mireskandari to operators of the poker clubs inquestion. Photos at the Chronicle show two of the owners of Post OakPoker Club posing with Houston Mayor Sylvester Turner in December 2018,although Turner denies ever meeting the men.
These men and others are now disavowing anyassociation with Mireskandari or the poker club owners. Fort Bend CountryDistrict Attorney Brian Middleton was one of the most vehement deniers, remarkingin Despart’s article that, if he had known that Mireskandari was involved withthe poker clubs, he “wouldn’t have had anything to do with him. Period.”Middleton also returned a $15,000 contribution from Mireskandari’s politicalaction committee (PAC) Texans for Fairness
Good Investigation or Keystone Kops?
The entire Houston situation has eitherbeen one of solid, investigative work by law enforcement or a Keystone Kopsroutine that went awry. InMay, police stormed the Post Oak Poker Club and Prime Social Poker Club,taking in nine people who were either the owners of said clubs or employed asmanagement by the clubs. None of the patrons in the clubs at the time werearrested, but other card rooms in the state of Texas took note and some suspendedtheir operations.
Things began to unravel for Ogg and theHouston authorities in July. Investigationrevealed the alliance between Mireskandari and the two poker clubs, includinghis work regarding lobbying for the regulation of their businesses. After furtherexamination, Ogg was forced to drop the charges against the owners and managersand return more than $200,000 in cash that was seized in the raids (Ogg didforward the case to the Federal Bureau of Investigation, however). Thenext month, Harris County officials were forced to drop “nuisance” chargesagainst the two operations. The reason for the cancelation was that, without acriminal case to back them up, the “nuisance” violations could not be provenand, thus, prosecuted, although they can be refiled at any time.
The debacle in Houston has also brought the focus of the national media. New Yorker magazine published a lengthy story, detailing out the efforts of Mireskandari and the number of politicians and law enforcement personnel he has been able to sidle up beside. It also probes the birth of the Texas poker clubs and why they believe that they are legal, despite what the law might say.
Whether this is the end of the Houston story remains to be seen. One thing that DAs hate the most is being shown up by someone they’re prosecuting, and the Houston poker clubs have certainly done that. But Prime Social isn’t letting the case go either, suing one of their former attorneys for $1 million for misrepresentation, negligence and breach of fiduciary duty regarding their work in getting regulations passed. We may not have written the final words on the Houston poker club scene just yet.
Poker rooms operating in Texas have no plans to shut down. They believe in their right to operate enough to take it to the courts if they must.
The loopholes in the law, in addition to the antiquated laws surrounding poker in Texas, may be challenged in just that way, as club owners have strong legal counsel in their corners. But that isn’t the only reason the poker rooms continue to exist. Another is that Texas Attorney General Ken Paxton decided last week not to issue an opinion on the topic.
By Paxton leaving it to the courts, he is allowing the ultimate court decision to set the precedent since lawmakers have chosen not to close the loopholes or pass laws that would clarify current wording.
AG Refuses to Play
The issue was put to Paxton by Texas State Representative Geanie Morrison, who sent a request to the Attorney General’s office. “Are poker gambling enterprises that charge membership or other fees or receive other compensation from gamblers playing poker – but do not receive a ‘rake’ – permitted under Texas law?” she wrote, according to KHOU.
The chairperson of Paxton’s opinion committee, Virginia Hoelscher, responded, “When a legal matter is being litigated, the courts are generally the appropriate forum for resolving the issue.”
She added, “It is the policy of this office to refrain from issuing an attorney general opinion on a question that we know to be the subject of pending litigation. This policy, which has been in effect for more than sixty years, is based upon the fact that attorney general opinions, unlike those issued by courts of law, are advisory in nature.”
Houston City Councilman Greg Travis was upset by the AG’s refusal to rule. He has been a vocal critic of the poker rooms, one of which (Post Oak Poker Club) is in his district, and believes the clubs are illegal. He hoped that Paxton would rule on the issue. “It’s either legal or it’s illegal, regardless of what lawsuits there are,” he told KHOU. He noted that Paxton’s statement was “very strange,” adding, “There must be more to the story, and I’m going to find out.”
The Post Oak Poker Club in Houston, the first licensed poker club in the state, is excited to announce the first major poker tournament tour stop ever in Texas.
STORY & SCHEDULE: https://t.co/ibe06uhekSpic.twitter.com/kc8mys9ZCH
— Card Player (@CardPlayerMedia) May 16, 2018
An Unusual Lawsuit
The litigation cited is a lawsuit involving poker rooms in the cities of Austin and San Antonio. Texas Card House owner Austin Card Room filed the suit in late June against SA Card House owner FSS Venture alleging unfair competition. Texas Card House has reportedly lost membership due to the SA Card House offering cheaper rates.
Poker Rooms Houston News Headlines
Why would one poker room sue another in an already-murky legal environment? Austin Card Room wants the court to clarify that law, the one under which both card rooms currently operate.
Poker Room Houston News
It may seem that the court battle could result in both poker rooms being shut down, depending upon the judge’s ruling and any subsequent actions. The call to request a ruling from Attorney General Paxton could have been that result, but Paxton declined to get involved.
In fact, the lawsuit could have a negative impact on the 30+ poker rooms in the state. KHOU estimated there are at least 19 poker rooms in Houston alone. All of them operate under the interpretation of the law that they are hosting private games and no rake is collected. Instead, the room operators profit by charging membership fees and benefiting from the sale of food and drinks. However, law enforcement officials can have varying interpretations of the law and shut down the clubs for operating illegally, which has happened in some cases.
Ultimately, lawmakers could take the matter into their own hands and pass a new law regarding poker. However, the plethora of clubs in the state and the masses of Texas residents who travel to neighboring states to play poker clearly indicate that there is a desire for some type of legal gambling in Texas, poker rooms at the very least.
Existing rooms take legal risks, and the poker players who frequent them take safety risks, as law enforcement isn’t always on their side or available to protect the clubs from robberies and other crimes.
All would benefit from some clarity of the current laws, but the desire for that clarification could result in the shuttering of all Texas poker establishments. It remains to be seen.
