How Concerns In Colorado Poker Rooms Showcase The Need For Wagering Legalization

During the last few years, the Lone Star State has developed quite a reputation in the poker world. It has a tendency for bluffing and total wild actions in some high-stakes games.

It’s a trend that was seen nationally during the poker boom of the 2000s. But in recent years, as the strategy evolved, players improved, and most poker markets matured, games generally got tougher and win rates decreased.

For many poker pros, Texas is kind of a modern-day poker gold rush. However, that’s because the game was and technically is still prohibited. Texas poker rooms are in a legal gray area.

It’s true that the government’s unwillingness to legalize more forms of gambling hampers poker’s growth in Texas . It created the soft games that fill the state’s card rooms today.

But recent developments, especially in the Austin area, highlight legitimate defense concerns for players. These issues would be alleviated with laws that at least specifically legalize poker, and hopefully more gambling in general.

If wagering is outlawed, how do Colorado poker rooms perform well?

In 2015, Sam Von Kennel opened Texas Card House in Austin, hoping to exploit a legal loophole. Beyond a handful of tribal casinos , operating any form of gambling was illegal.

Von Kennel didn’t call his establishment a poker room or a casino. He called it a social club.

Poker rooms make money through a small portion of the pots that are played, known as the rake. Legally, the rake is what separates a legitimate home game from an illegal gambling operation. Basically, it’s acceptable to gamble as long as no operation makes a profit from it.

Von Kennel didn’t take a rake at Texas Card House. Instead, he charged membership fees and allowed rake-free poker games to run within his club.

It was an experiment. If state officials enforced the law exactly as it was written, he would be in the clear.

The place didn’t encounter any pushback from law enforcement, and it was a success. What started as a small, four-table poker room turned into a brand known statewide with four locations.

After Von Kennel opened the way, other entrepreneurs started opening their own establishments as well. Soon, there was a regional poker boom in Texas.

Poker store began showing, but regulations didn’ testosterone change

The success of the “social club” model put government officials in a odd situation.

The political appetite for gambling legalization hadn’t changed. In fact, just last year, as efforts to legalize casino gambling in Texas ramped up, Lt. Gov. Dan Patrick told a Lubbock-based radio show that gambling “wouldn’t see the light of day” in that year’s legislative session.

Some lawmakers even attempted to take legal action against rooms in their jurisdiction. In 2019, two Houston card rooms were raided by officers from Vice Division of the Houston Police Department. They arrested nine owners and managers at Prime Social Club and Post Oak Poker Club on charges of money laundering and criminal activity.

Harris County District Attorney Kim Ogg made it clear that she was not a fan of these clubs.

“Poker rooms are illegal in Texas,” said Ogg in a statement. “We are changing the paradigm of illegal gambling by upgrading the criminal chain and pursuing crime money laundering and engaging in organized criminal changes against owners and operators.”

Harris County dropped the charges a few months later, but the incident highlights how some Texas politicians view gambling.

Traditional casino companies imagined a piece of typically the pie, together with laws adjusted

It is no secret that the country’s largest casino companies want to get into the Texas market. Besides the state’s massive population, gambling is a part of Texas culture.

Old western movies often include a scene where a group of cowboys play poker in a saloon. While that may be just a generalization about Hollywood’s interpretation of Texas, some of poker’s most iconic players, like Doyle Brunson, got their start playing in illegal, high-stakes Texas games.

But there’s a big difference between the Texas road gamblers of the 1950s and 1960s and modern casino moguls.

One group is fine settling their gambling disputes at gunpoint. Another would rather deal with a regulatory body. And there won’t be any oversight until the language of the law is changed.

In November 2020, Las Vegas Sands Corp CEO Sheldon Adelson hired eight lobbyists and sent them to Texas in hopes of swaying lawmakers to legalize casino gambling. Even after Adelson passed away a few months later, the company kept up with the lobbying efforts.

In the end, those efforts failed, but they will likely pick back up in future sessions. Texas poker players should hope they become successful.

The addition of Las Vegas-style casinos will likely hurt the market for smaller cardrooms like the ones currently available. But it will come with new player protections that simply don’t exist at the moment.

Oversight troubles highlighted inside Houston

It took a while, but we’ve finally gained an understanding of what the poker landscape looks like in Texas. There is considerable action, with absolutely zero accountability for the cardrooms.

To be fair, most of the state’s cardrooms have been run properly and without issues. However, Houston, which is the state’s largest city in both population and square mileage, has more than its fair share of problems with its poker rooms.

Claimed cheating with Prime Sociable tournament collection

As online poker became more popular in Texas, rooms began running tournament series. As tournament poker became more popular, the fields and prize pools became larger.

Last March, Houston area poker room Prime Social ran a series called the Texas Poker Tournament. It ran from March 10-29 and featured 22 events with a combined $4 million in guaranteed prize pools. The series concluded with a $5,300 buy-in no-limit hold’em main event with a $2 million guarantee.

Typically, when an operator runs a tournament series with such guarantees, poker players travel from all over to play. With a ton of players around, the cash games typically fill up as well. Often, there will be higher stakes available than what usually runs during the rest of the year.

During this series, a game of pot-limit Omaha with blinds of $25 and $50 was a regular occurrence. For those who might be new to poker, $25-$50 pot-limit Omaha is a very high-stakes game. Players in this game wouldn’t even blink an eye at five-figure swings. They happen often.

According to poker podcaster Joe Ingram, the game was made up of a handful of high-quality poker pros and some unknown players. Ingram described them as “action players.” In other words, they were weaker and would likely lose money to the pros.

Despite making countless unconventional plays, the “action players” crushed the game and won a lot of money. Some of the players in the game felt they weren’t playing in a fair game.

They thought they were being cheated somehow. Without any significant evidence, they took their concerns to management.

Shuffle machines had been allegedly the particular cheating supply

For the sake of brevity, I’ll spare some of the nitty-gritty details. But at some point, the players suspected that the alleged cheaters somehow hacked or manipulated the shuffle device.

In most casinos, shuffle machines are common. They reduce wear and tear on the dealers’ hands and speed up the game, allowing more hands per hour.

However, Prime Social did not always use these machines. In fact, ownership installed them only at a few tables a few days before the tournament began. One of the tables happened to be in the high-stakes area where this Omaha game took place.

Players demanded that the shuffle machines be turned off and dealers hand-shuffle the cards. According to Ingram and others with first-hand knowledge of the situation, after the machine was turned off, those players stopped winning and eventually stopped playing.

Clearly, this entire situation is vague and lacks any hard proof that cheating occurred. But one of the most interesting developments came after the dispute.

Prime Social hired Justin Hammer as a full-time tournament director in the months following the start of the controversy. Hammer is a well-respected poker industry professional who previously ran some of the country’s largest events at the Commerce Casino in Los Angeles.

Shortly after the series concluded, Hammer left his position with Prime. He is currently running a summer tournament series in Las Vegas at the MGM Grand.

Ingram said that he spoke to Hammer, and the main reason for Hammer’s departure was how management handled the cheating allegations.

Insolvency with Johnny Chan’ s 88 Social Online poker Club

Apart from being conned, poker players’ main concern when in a dark or greyish market game is ensuring they receive their money.

The most common example of this is what the online poker world called “Black Friday.” In April 2011, the U.S. government seized domain names and assets of the three largest online poker sites in the world. As a result, it was revealed that the second-largest operator, Full Tilt Poker, didn’t have enough money on hand to compensate players’ balances.

Due to the vague wording of the Unlawful Internet Gambling Enforcement Act of 2006, online poker was technically operating in a gray market. The law prohibited financial institutions from processing transactions related to illegal internet gambling but never clearly defined what constituted illegal internet gambling.

About a decade later, poker legend and 10-time World Series of Poker bracelets winner Johnny Chan followed in Full Tilt’s footsteps. But with a Houston poker room.

Chan and some business partners bought 52 Social and rebranded it as Johnny Chan’s 88 Social Poker Club. The room ran fairly smoothly for a while until Chan canceled a tournament series over concerns of missing guarantees. He followed it up by instituting a daily max cash-out of $2,000.

Despite the obvious financial problems, the room still operated (albeit with the max cash-out policy in place). However, when players arrived one morning last January, they found the doors locked and the establishment emptied.

Chan closed the shop without warning. Any outstanding chips were essentially worthless plastic. It should be noted that poker players who play regularly sometimes choose to hold high-denomination chips instead of cash for convenience purposes.

Fortunately for those affected, another group acquired the business, reopened the room, and honored the chips.

Numerous bouts involving gun physical violence

The bolded headline is self-explanatory. Over the first six months of this year, there have been numerous violent incidents at Houston poker rooms.

In the most recent one last April, there was a shooting at Legends Poker Club. According to reports of the situation, someone who wasn’t actively in the poker game was wandering around the cashier’s cage. Eventually, staff became suspicious and asked the individual to leave.

About fifteen minutes later, someone pulled up outside the poker room and fired 10 rounds into it. Thankfully, no one was harmed.

In January, someone attempted an armed robbery at the same location. But Legends’ security guards foiled the plan.

How would most likely legalization fix these challenges?

Legalization won’t formally solve all of these problems. Rather, by having a legal industry, oversight will reduce or lessen the probability of these occurrences happening again in the future.

The Nevada Gaming Control Board is the longest-standing gambling-related regulating body in the country. It’s arguably the strictest as well.

But it didn’t stop the infamous Bellagio thief from successfully robbing a high-stakes craps table. And there have been many cheating scandals with regulating bodies in place as well.

However, all these issues in Houston happened in the last 18 months. In most regulated markets, this would be about a decade’s worth of issues.

Oversight would have almost certainly prevented Johnny Chan’s financial distress from harming players, though. No gaming commission would ever allow that to happen. Regulators know the financial situation of the licensees and have in-house accountants.

A gaming commission would also have procedures in place to make Prime’s shuffle machine scandal nearly impossible. In regulated markets, regulators inspect those machines before the casino uses them.

Under the current landscape, Texas poker will continue to thrive. But it could be so much better than it already is. And Texans deserve an improved product.