Lodge Card Club Raided / Grand Jury does not indict any Lodge employees
Came looking for some info on this, but I guess I will kick the thread off. Anyone there at the time or know more detail
@2:34, Doug claims the "no economic benefit" exclusion in Texas law is meant to mean that 100% of the proceeds from the gambling / specific hands must go to the players, the implication being that the club earning an economic benefit by charging for time doesn't run afoul of the exclusion. IMO there is no basis for Doug's interpretation that I've been able to find, and it's som
I was wondering where his interpretation came from too. The law exclusion seems to say no economic benefit for game operators. Yet, for some reason, he narrowly interprets that as no economic benefit from pots for game operators. Only thing I can think of for his interpretation is that Texas cardrooms have operated for years by not raking pots.
Texas cardrooms have been raking pots for several years now. In Houston, only TCH and champions still use time rake.
Time rake and pot rake are equivalent in the eyes of the law. The authorities have allowed these rooms to operate is select counties. This could change at any time and operators could be facing felony charges just like the lodge.
Montgomery county is very close to Houston. They do not allow cardrooms.
One room was shut down two months ago. The owners did not claim “witch hunt”. They knew full well what they were doing. Another room was shut down after spending over $250,000 on a buildout.
A former main event champion who also heads an investment company looked into opening a room in Houston a few years back. When he researched the Texas gambling laws, he decided not to attempt to open in Houston.
I was wondering where his interpretation came from too. The law exclusion seems to say no economic benefit for game operators. Yet, for some reason, he narrowly interprets that as no economic benefit from pots for game operators. Only thing I can think of for his interpretation is that Texas cardrooms have operated for years by not raking pots.
I was surprised to hear him talk about economic benefit from a single hand vs profiting off a gambling enterprise (which he is clearly doing). I think he is wrong as well.
His LAWYERS might be wrong. I think it's clear Doug (and the ownership team) hired several lawyers to investigate the situation, and followed their advice when setting up the business. They obviously convinced him and the ownership group that the level of risk was within their comfort zone, so they went for it. Now, Doug at least, since he seems to be the public face of this situation, appears to be continuing to follow his lawyers' advice. I don't see anything wrong with this, and hate towards Doug for exploring the margins is misplaced. Many businesses have done this in the past, have been successful and ended up changing laws or attitudes.
Now, if the business or their employees violated these rules/guidelines, purposely, negligently, or recklessly, after opening, then yeah, they're gonna get their hands slapped, the severity of which (should) be proportional to the violation(s).
If you hate on Doug for being a d-bag at times when others have run into problems, totally fair. If you hate on him for being cautious while under investigation, then you're the d-bag.
Doug's video statement seemed pretty complete. I'm pretty surprised he said as much as he did, frankly. You figure all the attorneys would be advising him to clam up while this develops.
It is certainly strange as Doug said that Texas has 60 other venues continuing to openly operate, many that even take rake.
Guess it is completely up to local law enforcement and most don’t care. And why did Austin care?
Will be interesting to see how it continues to development.
I was wondering where his interpretation came from too. The law exclusion seems to say no economic benefit for game operators. Yet, for some reason, he narrowly interprets that as no economic benefit from pots for game operators. Only thing I can think of for his interpretation is that Texas cardrooms have operated for years by not raking pots.
This isn't some Doug Polk idea; this was the original thesis on which these rooms were founded upon, going back to the original dumpy Texas Card House over a decade ago now. And those guys didn't just pull it out of the air - my understanding is that they themselves were lawyers. The rooms that have been run professionally, as real businesses, have always taken the stance that a rake is the big no-no.
It is certainly strange as Doug said that Texas has 60 other venues continuing to openly operate, many that even take rake.
Guess it is completely up to local law enforcement and most don’t care. And why did Austin care?
Will be interesting to see how it continues to development.
To be clear - this is TABC and Williamson County, which is not the county that most of Austin is in, and the original Lodge location is not itself actually in the city of Austin.
This isn't some Doug Polk idea; this was the original thesis on which these rooms were founded upon, going back to the original dumpy Texas Card House over a decade ago now. And those guys didn't just pull it out of the air - my understanding is that they themselves were lawyers. The rooms that have been run professionally, as real businesses, have always taken the stance that
Do you happen to know what the basis was for the lawyers' opinion that charging for time is consistent with the no economic benefit clause? For example, perhaps there are some notes or early revisions of the bill that provide more context behind the clause?
Do you happen to know what the basis was for the lawyers' opinion that charging for time is consistent with the no economic benefit clause? For example, perhaps there are some notes or early revisions of the bill that provide more context behind the clause?
The idea is the economic benefit needs to accrue from the actual money being gambled. So laying sports odds with juice, or raking pots, etc.
The actual statute is very broad "no person gains economic benefit" so if you don't limit it to the actual gambling proceeds then you have some absurd results. I host a home game. The people who come to my home game all go to the nearby Whataburger that they wouldn't go to if not for the home game. You can argue under the letter of the law that the Whataburger is gaining economic benefit from the gambling and thus my game is illegal. That is clearly absurd, so then the options are either 1) benefit from the money being gambled such as rake, or 2) some indistinct line where the benefit has a strong enough nexus to the gambling to trigger illegality
The idea is the economic benefit needs to accrue from the actual money being gambled. So laying sports odds with juice, or raking pots, etc. The actual statute is very broad "no person gains economic benefit" so if you don't limit it to the actual gambling proceeds then you have some absurd results. I host a home game. The people who come to my home game all go to the nearby Wh
Does the Lodge rake tournaments? If so, wouldn't think be a direct economic benefit from gambling?
The idea is the economic benefit needs to accrue from the actual money being gambled. So laying sports odds with juice, or raking pots, etc. The actual statute is very broad "no person gains economic benefit" so if you don't limit it to the actual gambling proceeds then you have some absurd results. I host a home game. The people who come to my home game all go to the nearby Wh
You can't argue that because Whataburger is not party to the gambling. Those running the home game in your example are, so if they earn anything of their own gambling winnings participating in the game then they are receiving an economic benefit.
Does the Lodge rake tournaments? If so, wouldn't think be a direct economic benefit from gambling?
The argument is they have a fee to be present for the tournament, separate from the buyin. I agree that it's pretty weak in this spot, and they could have probably done better.
You can't argue that because Whataburger is not party to the gambling. Those running the home game in your example are, so if they earn anything of their own gambling winnings participating in the game then they are receiving an economic benefit.
But that's my point, the statute doesn't say the person getting an economic benefit has to be party to the gambling. It says "no person received any economic benefit other than personal winnings." So that's my point, it either has to be read as from the money gambled, or there is some unclear line as to how tied to the gambling the economic benefit has to be. What if I buy a poker table and chips and cards for the game?
But that's my point, the statute doesn't say the person getting an economic benefit has to be party to the gambling. It says "no person received any economic benefit other than personal winnings." So that's my point, it either has to be read as from the money gambled, or there is some unclear line as to how tied to the gambling the economic benefit has to be. What if I buy a po
Sure it does, because the defense from prosecution only accrues to those who committed the gambling offense to begin with:
Sec. 47.02. GAMBLING.
(a) A person commits an offense if he:
(1) makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest;
(2) makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or
(3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.
(b) It is a defense to prosecution under this section that:
(1) the actor engaged in gambling in a private place;
(2) no person received any economic benefit other than personal winnings; and
(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.
Not really. The Lodge didn't violate this statute, b/c they weren't making bets. Yet the defense is still here. The defense is clearly referring to people OTHER THAN the person making the bet receiving economic benefit.
Not really. The Lodge didn't violate this statute, b/c they weren't making bets. Yet the defense is still here. The defense is clearly referring to people OTHER THAN the person making the bet receiving economic benefit.
Oops, I copy and pasted the wrong section. Correct section:
Sec. 47.04. KEEPING A GAMBLING PLACE.
(a) A person commits an offense if he knowingly uses or permits another to use as a gambling place any real estate, building, room, tent, vehicle, boat, or other property whatsoever owned by him or under his control, or rents or lets any such property with a view or expectation that it be so used.
(b) It is an affirmative defense to prosecution under this section that:
(1) the gambling occurred in a private place;
(2) no person received any economic benefit other than personal winnings; and
(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.
People can hate on Doug and the other Lodge owners but assuming they ran a clean game, even if it’s in a gray area of law, he should be applauded as having a safe environment which is not adding to crime in the area which is important to quell the critics of gambling establishments in the state of Texas. Any hope that people have of poker being clearly legalized in Texas in the future is dependent on operations like his. The ones that shut down without notice and steal player funds and encourage other types of crime are the ones that will destroy any progress that the good ones have in trying to establish legitimacy.
So yeah, my personal opinions on Doug in this case do not matter. I can dislike the guy (I don’t, but just saying) and still be grateful for his contributions to the cause.
Oops, I copy and pasted the wrong section. Correct section:Sec. 47.04. KEEPING A GAMBLING PLACE.(a) A person commits an offense if he knowingly uses or permits another to use as a gambling place any real estate, building, room, tent, vehicle, boat, or other property whatsoever owned by him or under his control, or rents or lets any such property with a view or expectation tha
Right, but the fact that the defense exists for both offenses indicates it isn't only specifically tied to the operator. They could have put in the defense in gambling "the person operating the place did not receive any economic benefit" but they didn't.
I've read today on poker news that Polk will refund from his pocket all the players that were on the Lodge at the raid time. Personally, I think this is great but what authorities will think? It is right to do such a move at this step of the investigation?
Right, but the fact that the defense exists for both offenses indicates it isn't only specifically tied to the operator. They could have put in the defense in gambling "the person operating the place did not receive any economic benefit" but they didn't.
They outlined various parties who would be guilty of illegal gambling, including operators and players, and provided the same defense for both. Whataburger in your example would not fall in any of the parties specified as being guilty of gambling because they're neither an operator nor a player.
They outlined various parties who would be guilty of illegal gambling, including operators and players, and provided the same defense for both. Whataburger in your example would not fall in any of the parties specified as being guilty of gambling because they're neither an operator nor a player.
I feel like I could explain this in 2 minutes in person but text is harder. Whataburger obv wouldn’t be guilty of gambling or having a gambling place. They could be a person having economic benefit FROM the gambling and thus making the players and hosts guilty. The statute doesn’t require a player or operator get economic benefit. It says “no person”. So that’s so broad that a reasonable reading is that it’s narrowly tailored to the actual monies gambled.
Maybe a good example to show that the person getting economic benefit doesn’t have to be a defendant or breaking the law themselves:
I host a $100 tourney. I take $10 out of the pot per entry and pay a dealer. The dealer is getting economic benefit, making this unlawful gambling, even though the dealer can’t be charged with either of these offenses.
I agree this is close to what Lodge did and the question would hinge on if they charged separate fees or took from the pot. I also am not saying “this is the only reasonable way to read the law” I’m saying “this is one of several plausible ways to read a vague statute”
Maybe a good example to show that the person getting economic benefit doesn’t have to be a defendant or breaking the law themselves:I host a $100 tourney. I take $10 out of the pot per entry and pay a dealer. The dealer is getting economic benefit, making this unlawful gambling, even though the dealer can’t be charged with either of these offenses. I agree this is close to what
I don't want to belabor the point but again the law specifically calls out parties to the gambling, either those directly participating or those facilitating. The dealer in your example is facilitating the gambling so he's absolutely receiving an economic benefit that would be illegal under the statute.
I don't want to belabor the point but again the law specifically calls out parties to the gambling, either those directly participating or those facilitating. The dealer in your example is facilitating the gambling so he's absolutely receiving an economic benefit that would be illegal under the statute.
The law does not in fact call out anyone "facilitating" the gambling as someone who can't get economic benefit where other people can. I mean, I am a Texas lawyer who's been teaching the law to Texas judges for over two decades so I'm not just pulling this out of my arse.
The law identifies as defendants people gambling and people keeping a gambling place. Dealers are neither. The section on economic benefit says "no person." It doesn't say "No person who is gambling or no person who keeps a gambling place."
Would it be implausible for a poker club to succeed by just charging a monthly membership like a gym? Perhaps having professional dealers would be a larger personnel expense, but you could also just have the games be self-dealt like the old California card rooms.
The law does not in fact call out anyone "facilitating" the gambling as someone who can't get economic benefit where other people can. I mean, I am a Texas lawyer who's been teaching the law to Texas judges for over two decades so I'm not just pulling this out of my arse. The law identifies as defendants people gambling and people keeping a gambling place. Dealers are neither.
Dealer would fall under "operates or participates in..." of 47.03:
Sec. 47.03. GAMBLING PROMOTION.
(a) A person commits an offense if he intentionally or knowingly does any of the following acts:
(1) operates or participates in the earnings of a gambling place;
Sec. 47.04. KEEPING A GAMBLING PLACE.
(a) A person commits an offense if he knowingly uses or permits another to use as a gambling place any real estate, building, room, tent, vehicle, boat, or other property whatsoever owned by him or under his control, or rents or lets any such property with a view or expectation that it be so used.
(b) It is an affirmative defense to prosecution under this section that:
(1) the gambling occurred in a private place;
(2) no person received any economic benefit other than personal winnings; and
(3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants.
