Most forms of gambling in Texas are illegal, but there are some exceptions. Chapter 47.02c of the Texas Penal Code provides several carve-outs:

1. The Texas Lottery

2. Gambling at three Class II (aka mostly bingo) tribal casinos — Kickapoo Lucky Eagle Casino in Eagle Pass, Naskila Casino in Livingston, and Speaking Rock Casino in El Paso

3. Sanctioned horse and greyhound racing

4. Bingo halls

5. Charitable raffles

6. Professional sports team charitable foundation raffles

7. Drawings for the opportunity to participate in a hunting, fishing, or other recreational event conducted by the Texas Parks and Wildlife Department

The Kickapoo Traditional Tribe of Texas, the Alabama-Coushatta Tribe, and the Tigua Indians of the Ysleta del Sur Pueblo own and operate the aforementioned tribal casinos, respectively. Each is recognized by the federal government and are therefore exempt from Texas’ prohibitions on gaming.

How Private Poker Clubs Have Operated

The lifeline afforded to the dozens of private poker clubs across Texas is enshrined in the preceding section of the Texas Penal Code — specifically, Chapter 47.02b.

The clause provides a defense to prosecution for gambling offenses. It states that a person shall not be considered to have run afoul of Texas’s gambling laws if:

1. The actor engaged in gambling in a private place

2. No person received any economic benefit other than personal winnings

3. Except for the advantage of skill or luck, the chances of winning and losing were the same for all participants 

The words “private place” and “economic benefit” are at the heart of what some perceive to be a loophole in Texas law. That’s because they offer private poker clubs the opportunity to qualify as legitimate businesses.

Since the clubs don’t take a rake (or percentage) for hosting a poker event, there is no economic benefit. Instead, the clubs make money by levying membership fees and other charges, such as for the amount of time a player is at the tables — typically at half-hour or hourly rates. Some clubs also serve food and alcohol.

In a nutshell, Private poker clubs in Texas operate in a legally gray area.

It should be noted that Texas isn’t the only state with private poker clubs. According to the American Gaming Association (AGA), so-called card houses also operate in five other states — California, Florida, Minnesota, Montana, and Washington state.