Bad news for formerly legal poker rooms in Dallas. Civil District Court Judge Eric Moye ruled last week that the city was within its right to revoke an occupancy certificate for the Texas Card House, overturning a Board of Adjustment decision that allowed the poker room to operate legally . The Texas Card House plans to appeal and a spokesman says it is allowed to proceed with the process.
This was a tortuous journey through a gray area: Texas Card House circumvents the state’s gambling ban by not raking the pot. Texas law provides an exemption for gambling as long as three things happen: the gambling must take place in a “private place,” the organizer cannot profit economically from the game itself, and all players must take the same risk.
The Texas Card House functioned as a dues based social club, essentially offering its members a place to play poker and watch others play. Founder Sam Von Kennel believed the model was within the letter of the law and began opening chartrooms across the state in 2015. The Dallas location in question, located in a Harry Hines mall near the Sam Moon, opened in 2019. There are now around three dozen operating across Texas, and Dallas is the only city in the state to have legal action against them.
The city revoked the Texas Card House’s occupancy certificate 14 months after it was issued, basing its decision on claims that the Texas Card House was not a “private place.” The city’s process letter sets out its argument: “It is undisputed that tens of thousands of people have access to the poker games on the property, with an average of 630 players per day.” It notes that an additional 40,000 watch the chain’s live streams; The Texas Card House has a production studio on its premises.
Chief Assistant District Attorney Gary Powell laid out the city’s legal arguments against the poker rooms. When the matter reached the Board of Adjustment in March, the volunteer panel faced legal interpretations. Powell provided an interpretation of his own, arguing that the city was within its right to pull the CO because the operation violated a “safe haven” gambling provision that the Texas legislature approved 49 years ago. Powell said the Lege’s intent is to protect poker that takes place in kitchens and living rooms, rather than entire businesses built around gambling.
The Board of Adjustment ruled that it was not the appropriate body to make such a decision and allowed the Texas Card House to continue operating. There have been no arrests at the Texas Card House, nor has the Dallas County District Attorney examined its legality. All this follows from the legal interpretation of the prosecutor’s office.
Which brings us to the court verdict. Moye sided with the city, ruling that “the Board of Adjustment abused its discretion and made an unlawful decision in overturning the building official’s revocation [the] Certificate of Eligibility.”
The city argued that there was precedent for revocation of the CO. After granting the Texas Card House license to operate in 2019, the city denied COs for three other proposed poker houses: Champions Club, Dallas Poker Club, and Fifty-Two Social. The Champions Club complained and appealed because the city had already licensed the Texas Card House to operate. Texas Card House walked away from its plans to open another location in Montfort, and then building official Harry Hines CO. rescinded.
The Board of Adjustment allowed the poker room to continue operations because the city could not provide physical evidence that the card room’s operations had changed since it was authorized. The City Attorney maintains that the building inspector has the right to revoke a CO if he believes the permit was issued in error, and Judge Moye agreed.
This could have significant nationwide implications. All other Texas cities have allowed these spaces to operate, leading to a belief that the model fits within the gray area created by the Texas legislature. Texas Card House will appeal and will likely appeal until the matter reaches the Texas Supreme Court. This would set a legal precedent for the first time as to whether these operations are actually legal. If they don’t, municipalities would have a newfound precedent to shut them down.
Most of the buzz in the poker rooms came from neighbors near the old III Forks in North Dallas, where the Champions Club was planning to open. They raised hell and the city listened. If the state’s highest court sides with the Dallas Attorney, the poker rooms’ only option is to fold.
Matt Goodman is the online editor for D magazine. He wrote about a surgeon who killed a man who…