Legal poker clubs in Texas? Don't bet big just yet

Clubs are opening across Texas promising legal games in a state where gambling has long been illegal. Are they as advertised? The answer isn't crystal clear.

HOUSTON – Daniel Kebort’s business is hard to spot behind all the construction and traffic barricades on Post Oak Boulevard. Tucked at the end of a small strip center, behind an Al’s Formal Wear and a linen shop, is Post Oak Poker Club: a private, membership-based poker room that Kebort claims skirts Texas’ laws that prohibit gambling. And he’s going all-in on the business.

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Inside is a former steakhouse renovated into an intricate poker operation: multiple tables spread out across the various rooms for games of Texas Hold ‘em or Omaha. The club is open to members only, which Kebort said helps make it legal because it’s not open to the public—though anyone can walk in, pay the $15 daily membership and $10 initiation fees and join a game. In addition to those fees, all players pay a $15-an-hour seat rental fee at the table on top of their buy-in.

But are the hundreds of hands played each day actually legal? The answer isn’t so black and white.

A dealer at Post Oak Poker Club shuffles cards after a hand of Texas Hold 'em.
Greg Ramierz / KHOU

On any given night at Post Oak Poker Club, there are as many as 12 games running, with more on weekends when the club hosts tournaments that guarantee upwards of $10,000 in prize money. Kebort said the goal is to take the poker games out of the homes, country clubs or even the underground—high-stakes games held in the back room of businesses or warehouses—and bring them to his club.

“The games all operate the same as they would in any other setting,” Kebort said. “We just have the food-and-beverage component, and then a couple of other revenue streams that are build around it.”

Read for yourself: A brief look at Texas' gambling laws

There’s a long history in Houston of poker played in underground games, which have no semblance of legality. The clubs are played in the shadows, away from the big blue lettering donning the tan exterior walls that call attention to Post Oak Poker Club. Because of that, underground games are much more prone to robberies or police raids. And with those added risks, a large cut—sometimes as much as 30 percent—is taken out of each hand that goes back to the house, making them illegal under state law.

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A July 2014 underground game turned deadly in Fort Bend County when masked gunmen stormed in through the backdoor of a business and shot and killed Donald Leonetti, a respected businessman in the community. Stafford police said the gunmen got away with $20,000.

Leaning in a black chair in the VIP lounge at Post Oak, Kebort said he wants to take the games out of the underground and provide a legal, regulated game at Post Oak without the risks and dangers. He swears by the club’s legality, which is why he said he’s invested so much time into the private-membership concept and in building up his club.

Daniel Kebort, co-owner of Post Oak Poker Club, said playing poker at his club is legal, in part, because it's a private business that's not open to the public. But not all agree about the club's legality.
Greg Ramirez / KHOU

He claims to have created the idea in 2012 while living in Austin. At the time, Kebort was working with Sam Von Kennel, a poker fan who once worked for the Texas House of Representatives and was a member of the Licensing and Administrative Procedures Committee.

Von Kennel told KVUE-TV, KHOU’s sister station, that he watched people try to draft destination casino bills through the years, but realized that casino gaming—slot machines and blackjack—was years away from ever coming to Texas.

“I decided to take a look at what we could do,” Von Kennel told KVUE in 2015. (Von Kennel didn’t return requests for comment for this story.)

The idea is that because these clubs don’t make money by taking a rake—a term for pulling money out of every pot that goes to the club—they aren’t open to the public, and all players have the same chances of winning and losing, that makes the games legal.

Post Oak isn’t the only club in the state operating under that model. There are at least 40 others, spanning from Houston to Austin to San Antonio and, at one time, North Texas.

MAP: Texas poker rooms

Von Kennel opened the first poker room in the state, Texas Card House, in Austin in 2015.

Though Kebort is confident these clubs—his specifically—are operating legally, there are others who are quick to point out they’re skirting a fine line of the law, if not outright illegal.

In North Texas, at least five poker rooms have closed—whether voluntarily or because of pressure from law enforcement.

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Poker Rooms of Texas in Plano is one of those clubs. In a statement on its website, owners said the club "is working with local authorities to resolve operational issues so we remain a private, social, card club. While going through the process, we have closed our doors to ensure the safety of our members and employees.”

Curtis Howard, a legal adviser for the Plano Police Department, said the law is clear.

“Playing poker for money—it’s a gambling business, they’re making money off of it,” Howard said. “The way we read (the law), in conjunction with the district attorney’s office, is it violates Texas’ gambling statute.”

When Kebort opened Post Oak Poker Club in July 2017, he hoped to get Houston city council members’ support for his business. He went as far to speak in front of council members in August during public session to promote his club. But the meeting didn’t come without pushback.

Councilman Greg Travis, whose District G includes Post Oak Poker Club, has spoken out against the poker rooms—specifically the one in his district. During Kebort’s comments to council, Travis told him: “I think it’s illegal, I think it’s harmful to my district and I think it’s harmful to my city.”

Near the end of his comments, Kebort conceded, “I understand that if my business is deemed illegal, we need to remove it from the public space.” But, he added, “it’s my understanding that it’s currently legal.”

The Texas Attorney General’s Office could soon shed some light on the ambiguity that exists in the law.

State Rep. Geanie Morrison, R-Victoria, requested an opinion from Attorney General Ken Paxton on the legality of these clubs.

“It has been brought to my attention that some poker gambling enterprises in this state, while not taking a ‘rake,’ are nevertheless compensated by charging poker gamblers fees such as per-seat or time-based fees, membership fees, subscription fees and entry fees,” Morrison wrote in her request. “Are poker gambling enterprises that charge membership or other fees or receive other compensation from gamblers playing poker—but do not receive a ‘rake’—permitted under Texas law?”

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While Kebort is watching the opinion closely, he said either way Paxton’s opinion sways won’t necessarily make or break his business.

“A favorable opinion seems on the surface great for us, but it still doesn’t give us anymore of a leg to stand on without it,” he said. “On the other hand, a negative opinion isn’t the end of the world for us. It doesn’t mean we have to shut our doors the next day.”

Although an opinion from Paxton could provide some clarity to the law, any change has to come from lawmakers or a judge’s ruling.

Read: Rep. Morrison's request for opinion

Kebort said in order for his business to succeed and grow, the ambiguity has to be clarified. His long-term vision, he said, is to bring something similar to the Vegas strip to Post Oak and expand the Post Oak brand beyond Houston.

“I can take a risk on one or two (clubs), but I can’t put 20 of them out there when we’re still working in that gray area,” he said.

Until the law is clarified, Kebort plans to continue to push forward with Post Oak Poker Club.

“If I wasn’t confident from the beginning in what I interpreted (the law) to be and what I saw there, I wouldn’t have gotten this far with it,” he said.

And, he adds, “I’m a gambler anyways, so I enjoy it.”

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