Dallas was right to try to shut down poker business, judge says - The Dallas Morning News

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A Dallas poker club could be forced to close its doors after a judge reversed a citizen board’s ruling that allowed the business to keep operating despite the city’s efforts to shut it down.

City officials allowed at least three poker businesses to operate in Dallas as of 2020, but changed their stance a year later amid public pressure and the city now deems them illegal, citing the state’s ban on gambling.

District Judge Eric Moye wrote in an order signed Oct. 25 that Dallas’ Board of Adjustment “abused its discretion and made an illegal decision” when it overturned the city’s revocation of Texas Card House’s certificate of occupancy.

The judge sided with the city’s top building inspection official, who sued the Board of Adjustment in the spring to throw out its March decision to allow the poker business to keep its certification.

The city also has a lawsuit against the Board of Adjustment and another active poker business, Shuffle 214, which also had its revoked certification reversed in May. The suit is currently scheduled to go to trial next summer.

Dallas is paying for outside lawyers to represent the Board of Adjustment and Andrew Espinosa, the city’s chief building official, in both cases.

Attorneys representing Texas Card House asked Moye on Nov. 1 to block the city from enforcing the judge’s order while launching an appeal. Brian Mason, one of the attorneys representing the poker business, wrote in his motion that an immediate shutdown would lead to the loss of jobs and health benefits for 235 employees, a loss of $2 million invested into the Harry Hines Boulevard property and lost revenue and profits.

Texas Card House, which has other branches in Austin, Spring and the Rio Grande Valley, was livestreaming poker games from its Dallas location on Oct. 30 and is advertising Dallas tournaments on its website for the next week.

Mason said there are 80 poker businesses operating around the state. He said the continued operation of other Dallas businesses, Shuffle 214 in Lake Highlands and Poker House of Dallas in the Stemmons Corridor near Dallas Love Field, undermines any argument the city may have about potential harm Texas Card House would cause by staying open.

“The judgment in this case is just the tip of the spear with respect to the legality of private poker clubs in Texas,” Mason wrote. He said the issue of whether private poker clubs comply with Chapter 47 of the Texas Penal Code is likely to be resolved by the legislature or the Texas Supreme Court.

A court hearing on whether to suspend city enforcement of Moye’s ruling is set for Nov. 28.

Tom Brandt, one of the attorneys representing Espinoza in both lawsuits, said he was aware of Texas Card House’s plans to appeal, but declined to comment on how soon the city would require the business to close since its certificate of occupancy is no longer valid.

“We’re pleased with the result,” Brandt said of Moye’s Oct. 25 ruling.

Attorneys representing the Board of Adjustment and Texas Card House didn’t respond to messages seeking comment. Dave Neumann, chair of the Board of Adjustment, and City Attorney Chris Caso declined to comment, citing pending litigation.

Gambling is illegal in Texas, including betting money or anything of value at any game played with cards, dice, balls or other devices. But it is legal if the games occur in a private place, if no person receives any economic benefit other than personal earnings and if all players have an equal shot at winning except for the advantage of individual skill or luck.

Supporters argue that poker is a game of skill and doesn’t fall under explicit gambling. Poker businesses have been allowed to legally operate around the state by charging membership or access fees to patrons instead of directly collecting money from the games. The profit for businesses and employees comes from membership fees, food and beverages served, and cash tips.

The businesses argue that any winnings players give directly to workers don’t violate the law because tips aren’t mandatory, and players are free to spend their winnings any way they see fit.

But the ambiguity in a section of the law on who is and isn’t allowed to receive financial benefits from the games is among the key issues in dispute between some cities, like Dallas, and operators.

Texas Card House entered into a lease for its site in northwest Dallas near Farmers Branch in December 2019 and received its city-issued certification in October 2020.

But after backlash last summer from some Far North Dallas residents who opposed plans for another poker business near their neighborhood, city attorneys and building officials said they again reviewed the state’s law on gambling and determined they improperly allowed poker businesses to operate because they misinterpreted the law.

Caso told City Council members during a public meeting in 2019 that the businesses were perfectly legal.

Brandt in court documents said there was “significant outcry” in opposition to the planned Champions Club, which described itself as a members-only high-end dining and entertainment establishment with a poker room.

“The city received numerous communications from many citizens, including legal opinions explaining how the poker houses do not comply with Texas law prohibiting gambling… and the Collin County District Attorney indicated that poker houses are illegal and would not be allowed,” Brandt wrote in October.

Champions Club had planned to move into the former space of III Forks restaurant, which sits in Collin County.

Champions Club had its certificate of occupancy application denied by the city in August, a month after the owners applied. Three other groups, Dallas Poker Club, 52 Social and Sportsbook Poker Club, also couldn’t get city approval.

Texas Card House and Shuffle 214 appealed the revocations of their certificates of occupancy to the Board of Adjustment, which hears challenges to development code decisions. A five-person panel of the 15-member board overturned the city’s decision in both cases, saying the businesses did nothing to warrant their certificates of occupancy being taken away.

The owners of Champions Club and Dallas Poker Club also appealed their denied applications to the city’s Board of Adjustment. Two separate panels of the citizen board upheld the denials last fall, citing the city’s new stance that the businesses are illegal.

The owners of Champions Club, Dallas Poker Club, 52 Social and Sportsbook Poker Club have since sued the city. The Board of Adjustment is also a defendant in the Champions Club and Dallas Poker Club lawsuits.

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Dallas was right to try to shut down poker business, judge says - The Dallas Morning News
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