The state of Texas has a legislative session every two years and there is an attempt every time to legalize commercial casino gambling, most notably the card game that bears the state’s name. It’s a four-step process to get the games approved, but no one ever gets to step no. 1, according to Sam Von Kennel, the owner of a card room in Austin that operates by collecting membership dues rather than a rake.
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It was a bold move to open the room in a state that is just one of 10 in the country to not have traditional gambling. The only non-tribal gambling present in Texas is the lottery, pari-mutuel wagering, and some charitable gaming that includes bingo and raffles. The only casino in the state is the Kickapoo Lucky Eagle Casino Hotel located on tribal land near the town of Eagle Pass, close to the Mexican border. It has a 12-table poker room, but it isn’t open 24 hours during the week. It has $2-$5 and $5-$10 no-limit hold’em, according to its website.
Two hundred and twenty miles away, Von Kennel opened his Texas Card House earlier this year, and it was dubbed the only legal stand-alone poker room in the Lone Star State. There’s a reason for this.
“I’ve seen firsthand the lobbying efforts from Louisiana, Nevada and Oklahoma to make sure Texas license plates come to their states,” Von Kennel said. “Gaming bills don’t get a chance to get heard.”
Commercial casinos in Nevada and Louisiana win roughly $13.5 billion each year from gamblers. Tribal casinos in Oklahoma take in nearly $4 billion a year from gamblers.
Von Kennel, a poker player himself, used to work for the Chairman of the Licensing and Administrative committee. His background there gave him the confidence to open up his poker room, because when he asked around if a membership-only poker facility was within the law no one gave him any “red flags.”
Still, “the threat isn’t not there to get shutdown,” Von Kennel said.
In 2013, Von Kennels then business partner Daniel Kebort drafted and lobbied a bill to explicitly legalize “social poker gaming” like what Von Kennel does. Kebort designed the bill and the ensuing business model after he discovered an opening in the language of Chapter 47 of the Texas Penal Code. The bill didn’t pass, but Von Kennel and Kebort figured there was room within the law to go ahead anyway.
“I’ve worked for a lobbying and consulting company with my dad, and one of our clients was a gaming company, and for them we tried to pass a couple of gaming bills,” Von Kennel said. “In doing that, along the road, we got a full understanding of what is legal. I’ve worked with restaurant and bar associations around town. They have their poker nights where you can win prizes or a free bar tab. It’s promotional. I then looked deeper into it to try to find the exact illegal aspect of it. In Texas, it’s all about the rake. We went from there. It’s a country club, where members pay their dues. We provide them with the chips and the chairs and everything they need for a poker experience with real money.”
Around Austin the main poker draw are still the home games. “If someone is looking to get into this business, they are doing it home-game style with a rake,” he said. “They say, ‘Why should I do it legally?’”
Player safety is one good reason. It’s not uncommon for underground poker games to be targeted by criminals across Texas and elsewhere. In one of the latest such cases, which happened in July, police were called after a shooting at poker game running behind the tinted windows of an establishment called Man Cave Entertainment Austin. Instances like that are reported at least several times a year in Texas.
Von Kennel is actually hoping his business model catches on, because his games are out in the open. He believes that Texas is surely large enough to support a dozen poker rooms like his. According to Von Kennel, there have been attempts in the past to run poker rooms like his Texas Card House, with a notable case a decade ago involving a room getting shut down because dealers were taking tips from players. That also isn’t allowed under state law. Only the players in a poker game can profit directly from the game, and that’s pretty crystal clear.
“We’ve learned from their mistakes,” Von Kennel said.
The only real hope for casino gambling in the Lone Star State is if lawmakers finally decide to keep the money in-house. Von Kennel said it’s “obvious” to keep the money in Texas and spread it around the state, with casinos or card rooms in various locations. Unfortunately the anti-casino campaign isn’t just levied by those outside of Texas. The state’s religious base also is against casinos.
For now, Von Kennel is focused on growing his poker business. He said that a concession stand is the other source of revenue for his room, but that he can eventually expand with a bar or restaurant. He isn’t in a hurry, though. “My personal passion is poker, and for now it can just be what it is,” he said.