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Game Room Laws in Texas

Gambling Laws and Regulations in Texas

Many people are familiar with the wildly popular card game known as “Texas Hold ‘Em.” This card game has become so popular that it is regularly featured in poker tournaments that offer cash prizes in the millions of dollars. Despite its name, it is actually illegal to play this game for money in a casino in the state of Texas.

It’s true that nearly all forms of gambling are strictly prohibited in the state of Texas. However, many people are using loopholes, legal maneuvering and outright deception to work around this law. There is an illegal and semi-legal gambling industry in Texas that is worth billions of dollars. Check out this article to learn about the game room industry and just how much trouble you could get in if you’re caught gambling illegally.

Gambling in Texas

With a few exceptions, gambling is strictly illegal in the state of Texas. According to Chapter 47 of the Texas Penal Code, it is against the law to bet money or anything of value on the outcome of a card game or any game of chance. There are a few exceptions to this law, including:

  • Gambling which takes place in private, such as betting on the Super Bowl at a private house party or betting on a casual game of poker between friends
  • Bingo and raffles that are held for charitable purposes
  • Participating in the state lottery or an authorized drawing for a hunting or fishing tag

This law is very explicit on the types of activities that may be allowed under the gambling law. To put it simply, any type of organized gambling that takes place in a public location and pays out winnings based on the outcome of games of chance is strictly illegal.

However, there is one more exception to the gambling law that is the source of the widespread game room problem. Chapter 47.02, Section E of the Penal Code states:

“It is a defense to prosecution under this section that a person played for something of value other than money using an electronic, electromechanical, or mechanical contrivance excluded from the definition of “gambling device.”

Section 47.01 of the Penal Code spells out the definition of a gambling device. The definition includes many popular devices that are used as games of chance, including:

  • Slot machines
  • Roulette wheels
  • Electronic poker or blackjack machines
  • Keno machines

However, this section goes on to state that certain electronic or electromechanical gaming devices are legal, as long as they are intended for genuine amusement and only pay out non-cash prizes that are valued at no more than 10 times the cost of one play of the game or $5, whichever is less.

This exception to the law has led to the rise of a serious underground gambling problem that is spreading across the state of Texas.

The Problem of Eight-Liners and Game Rooms

Of course, people looking to make a fast profit have exploited this legal loophole to operate “legal” gaming rooms that would otherwise be prohibited under the law. For example, in Texas, electronic gaming devices known as “eight-liners” have been popping up in gas stations, deserted buildings, private residences and even behind stores claiming to be legitimate businesses.

These machines can be configured to have no payout option or to payout small non-cash prizes, such as stuffed animals or small appliances. You don’t have to be a legal expert to figure out how this system could be exploited.

Game room owners could allow patrons to receive payouts in the form of small prizes and then exchange those prizes for cash to entice the customers to come back for more illegal gambling. In some cases, the machines can be configured to completely bypass the law and pay out in cash. When an inspector comes by, the machines may appear to be completely legitimate when they are actually nothing more than modified slot machines that you could find in a Vegas casino.

Law enforcement has been cracking down on these game rooms and the use of eight-liners across the state. Getting caught in the middle of gambling illegally can lead to serious penalties.

Gambling Penalties

In Texas, simply placing a bet on the outcome of a sports game or betting a few dollars on a hand of poker is enough to lead to criminal charges if that action takes place in a public place or game room. Section 47.02 of the Penal Code makes this a Class C misdemeanor, punishable by:

  • A fine of up to $500
  • Community service and probation

The penalties can be significantly increased for people who organize gambling or promote game rooms instead of simply participating. Section 47.03 of the Penal Code makes it illegal to promote or operate a gambling place while section 47.04 makes it a crime to keep a location intended for public gambling use. Both of these offense are Class A misdemeanors, punishable by:

  • Up to one year in county jail
  • A fine of up to $4000

In some cases, if a person operates a gambling place out of their place of business, they may lose their business license and be denied any future credentials for operating a business in that county or the state of Texas.


Have you been arrested for organizing or participating in illegal gambling? Matthew Sharp is an experienced, aggressive attorney who can help protect your rights. Contact his office today at 713-868-6100.

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