The fight for poker around the world, in the minds of many, has boiled down to whether the game is ultimately based on skill or chance. Is luck the dominant factor in poker or is skill? In Texas, State Representative Jose Menendez has introduced House Bill 222, the Poker Gaming Act of 2009. It seeks to legalize poker within the state.
The Act begins, “All poker gaming conducted in this state and authorized by law shall be regulated and licensed under this chapter unless state or federal law specifically provides otherwise.” Moreover, it explicitly declares that poker is a game of skill and that the game is actually beneficial to society. It claims that poker “will benefit the general welfare of the people of this state by enhancing investment, development, and tourism… resulting in new jobs and additional revenue.”
As an important caveat, the Poker Gaming Act of 2009 is specifically aimed at live poker in brick and mortar casinos, not video poker or online poker. A poker regulatory body will dole out licenses and determine the maximum number of tables that each location will be able to operate. In the case of charities operating events, the Act notes, “A separate permit must be obtained for each charitable poker tournament conducted by a licensed operator.”
Under a section entitled “Mandatory Issuance of Commercial Operator’s License,” it is prescribed that licenses will be given to businesses that hold an alcohol permit or a pari-mutuel license. Federally recognized Indian tribes will also be given a permit to operate a poker room. In the case of each of the aforementioned businesses, they must file a proper application, pay applicable fees and taxes on time, and meet any other requirements that the poker commission requires.
The rules governing charitable poker tournaments are lengthy. Some of the highlights include that all proceeds must be turned over to a recognized non-profit within 30 days of the event. In addition, “The expenses of conducting the tournament deducted by a licensed operator may not exceed 30 percent of gross receipts.” Specific expenses are outlined as well and include advertising and marketing.
The costs to becoming a legal poker room in the state of Texas include both application and licensing costs. Application costs for a commercial enterprise and charitable tournament are $1,000. The application fee for a dealer is $100. Licensing fees are the same amounts, but are paid to the State every year.
Other revenue sources for Texas from poker include the blanket taxation of the industry, which is set at 18% of gross revenues. Pari-mutuel license holders are only on the hook for 16%. In the case of charitable poker tournaments, the Act prescribes, “The tax rate is five percent of the gross receipts received by a licensed poker operator.” Up to $100 buy-in tournaments are allowed and the operator may not collect a fee of more than $30.
In Menendez’s bill, poker is specifically deemed to be a game of skill, which is an important distinction in many jurisdictions to the sport being legalized. In the case involving the seizure and potential forfeiture of 141 internet gambling domain names in the Commonwealth of Kentucky, for example, Circuit Court Judge Thomas Wingate commented, “Chance, though not the only element of a game of poker, is the element which defines its essence. In the end, no matter how skillful or cunning the player, who wins and who loses is determined by the hands the players hold.” Many industry professionals would argue that components of poker such as bluffing involve winning without the best hand, which would run contrary to Wingate’s statements.
The Texas Card Players Association (TCPA) is hosting its third annual State Championship Poker Tournament at the Howard Johnson Inn in San Antonio near I-10 and Loop 410 on Sunday, November 30th. The tournament begins at 2:00pm and boasts a buy-in of $200. There is no tournament fee (rake) taken. The home page of the TCPA states, “Under current law it is unclear exactly when it is legal to play poker and when it is not. What is prosecuted in one county is not prosecuted in another county, and yet no person in Texas has ever been convicted of playing poker.”
