Texas Gambling Commission – Gambling In The Lone Star State
By
Jane Shaw
Senior Editor Updated: 10/31/2022
We count on Jane to inform our readers about the latest slot games in the US market. With her passion for video games and a degree in engineering, she’s our gambling tech expert. Jane’s also active in our blog section, where she tackles the curiosities and changes in the industry.
Legality of Gambling in Texas
Texas gambling laws are complicated to enforce since only certain forms of gambling are legal in the state, and many look to exploit loopholes in the law. That begs the question – who exactly regulates legal gambling and lays down the law?
Summary
Most forms of gambling are illegal in Texas, thanks to their strict laws that only permit a few forms of gambling. The fact that some forms of gambling are exempt from the rules in Texas, makes the rules more challenging to fully understand. In this article, we cover all Texas gambling laws.
- 🎰 Is Gambling Legal in Texas?
- 🔍 Gray Areas of Texas Gambling Laws
- đź‘® The Texas Gambling Commission
- 🕵️‍♀️ Who Enforces Legal Gambling in Texas?
- 🎴 Indian Casinos in Texas
- âť“ FAQs
Is Gambling Legal in Texas?
The short answer is yes and no. Only certain forms of gambling are legal in Texas – namely, charitable bingo, the Texas Lottery, parimutuel betting on horse and greyhound racing, raffles, pull-tabs, and three Indian casinos. All other forms of gambling, including sports betting, poker, blackjack, roulette, and so on, are illegal under Texas gambling laws.
This doesn’t mean that efforts haven’t been made to legalize more forms of gambling in Texas. In 2021 – two years after the Supreme Court order that permitted states to legalize sports betting – representatives tried to introduce legislation to legalize sports betting in Texas. The bill didn’t get the support it needed and the effort was put on hold, despite elite sports teams such as the Dallas Cowboys, Dallas Stars, and the Texas Rangers pushing their support for legalizing sports betting. The effort to legalize sports betting can now resume only in 2023, and it looks like a long road ahead before any forms of gambling are legalized in Texas soon.
Gray Areas of Texas Gambling Laws
It would make sense for one to wonder why and how there would be gray areas in laws that seem so categorical, but they do exist.
Eight-liners
Slot machines in the odd mom and pop gas station or in “gaming rooms” aren’t an uncommon sight. These slot machines are illegal on paper – but as always, it’s rarely as simple as that. Eight-liners started to pop up around Texas in 1993, following the passage of the “fuzzy animal law” – which states that a slot machine can be operated if it only deals out non-cash prizes not worth more than $5 to $10.
While every gaming room says that they run eight-liners under these rules, it is an open secret that most rooms do offer large cash prizes for winning with these machines. Efforts to ban eight-liners altogether have been unsuccessful – both in terms of legislation and enforcement – so don’t expect illegal slot machines to end anytime soon in Texas.
Casino Cruises
From time to time, several cruises have tried to offer gambling packages where they’d take customers to international waters in the middle of nowhere, free from the concept of gambling laws. These casinos have come and gone by the dozen, with most of them having failed either due to not being profitable or the misinterpretation of a key anti-gambling law.
The law used to state that ships carrying gambling equipment could only dock in a Texas port if they had stopped at a foreign port prior to arrival. This effectively barred any hopes of a casino cruise legally operating in Texas. However, resistance to this law,including from several ports and port officials, led to it being rolled back after a push for a repeal by Galveston officials in 1989.
While this was a victory on paper, the enforcement of this law has been inconsistent – to say the least. In 1991, federal prosecutors said they would enforce a law requiring ships carrying gambling equipment to dock if they visited an international port or sail for 24 hours if this requirement wasn’t met. This was directly responsible for two such cruises – the Sea Palace and the Pride – shutting their operations in Texas down.
Following this, casino cruises didn’t return to Texas till 1993 when the Star of Texas received permission from the U.S. attorney’s office under the condition that less than half of its space was dedicated to casinos while non-gambling activities were promoted by the organizers. This business also tanked not long after it started its operations, and it was the first of a long list of failed gambling cruise offerings in Texas after the law was correctly implemented.
Private Gambling Events
Gamblers will be happy to know that private gambling events are legal in Texas, provided that the public has no access to these events and the host earns no profit or remuneration from them. Organizers cannot collect rakes from any poker and casino games, and all money must be redistributed amongst participants. These events won’t invite penal action from the Attorney General’s office, provided these conditions have been strictly met.
The Texas Gambling Commission
With such strict laws that have layers of complexity, you must be wondering who exactly implements these laws and watches out for violations. We also wouldn’t blame you for thinking that there should be a Texan central body that does so.
However, there is no such body as the Texas Gaming Commission. Since most forms of gambling are illegal in the state, the state didn’t see it fit to have a regulator to only supervise the few gambling activities that are legal.
This doesn’t mean that there are no regulators in Texas. There are several smaller regulatory bodies that organize and regulate legal gambling events in Texas, but there’s no central body at the state level overseeing all gambling activities. When it comes to disputes involving Indian casinos, matters have typically been settled in court.
There have also been efforts to set up a Texas Gaming Board. These efforts center around the Texas State Gaming Commission Amendment (2015) that also seeks to amend the Texas Constitution. However, this Amendment is yet to pass – so the future of the Texas Gaming Board is still uncertain.
Who enforces legal gambling in Texas?
There are numerous smaller regulators and associations that regulate legal gambling activities in Texas. Let’s look at a few examples of some of these legal gambling activities, how they are regulated, and by whom.
Texas Lottery
Texas lottery is the government-owned and organized lottery that also happens to be the only legal lottery in Texas. The lottery organizes several lotteries, including a number of famous events like the Mega Millions.
The Texas Lottery was started in 1991, following a constitutional amendment that legalized lottery sales in the state of Texas. The lottery is operated by a regulatory body called the Texas Lottery Commission or the Texas Lotto Commission.
The Texas Lotto Commission started the Texas Lottery with its first game in 1992, called the Lone Star Millions which sold its first ticket to then-governor Ann Richards and went on to sell 23.2 million tickets on the first day – a world record. The first-week sales skyrocketed to 102 million tickets, which was also a world record.
The Texas Lottery Commission has only seen one threat to its existence, which was in 2013 when the House voted against recommissioning the Commission. In a U-turn on their own decision, the House started a fresh vote that recommissioned the Texas Lotto Commission.
Bingo
Around 1,227 charitable and community organizations are permitted to organize charity bingo tournaments in Texas. Individual counties are required to organize local referendums to legalize bingo for the activity to be permitted – 226 of the 254 counties have done so.
Bingo is allowed with certain restrictions in Texas. Bingo games and Instant Bingo (i.e, pull-tabs) can be organized provided bingo sessions are only organized thrice a week, giving out not more than $750 in prize money per game. $533 million in prizes has been distributed through the licensed organizations since 2011.
Bingo in Texas is also regulated by the Texas Lottery Commission, by its Charitable Bingo Operations Division. Having a license issued by the Texas Lottery Commission is a mandatory prerequisite to organize bingo games in Texas. Since there is no separate Texas Bingo Commission, this makes the Texas Lottery Commission a body that has a larger scope of responsibilities other than just organizing the Texas Lottery.
Raffles
Raffles are a type of lottery, but there is a small distinction between the two. While both lotteries and raffles work on the same principle of buying numbered tickets, lotteries only give out cash prizes while raffles give out both cash and non-cash prizes. Licensed organizations are permitted to organize raffles up to four times a year, provided the prizes are non-cash and worth less than $50,000. Raffles were legalized in 1990.
While raffles in Texas aren’t regulated by a specific body, they are governed by the Charitable Raffle Enabling Act (CREA). In addition to this, the Sports Team Charitable Foundation Raffle Enabling Act is another law that enables the charitable foundations of sports teams to organize raffles during home games.
Parimutuel Wagering
Parimutuel betting on horse races is legal in Texas. Under state laws, an unlimited number of racing days can be granted to Class 1 horse tracks while there’s an upper limit of three races in the three largest metropolitan areas in Texas – namely, the Sam Houston Race park (Houston), Lone Star Park (Grand Prairie), and Retama Park (Selma).
There are no Class 2 licenses since tracks are still being developed, while there are no Class 4 licenses either. However, there is one county that has a Class 3 license – the Gillespie County Fair in Fredericksburg.
Parimutuel wagering is regulated by the Texas Regulatory Commission. The organization states on its website that its purpose is to protect the integrity of horse racing by “enforcing the Texas Racing Act.”
Greyhound Racing
Texas state laws permit greyhound racing in greyhound tracks in Cameron, Nueces, and Galveston. These counties are permitted to have up to three such tracks. The following tracks are licensed to organize greyhound racing in Texas:
- Gulf Coast Racing (Corpus Christi)
- Gulf Greyhound Park (La Marque)
- Valley Race Park (Harlingen)
Greyhound racing has seen a major dip in popularity since 2010 – and so in practice, it is mostly the Gulf Greyhound Park that still organizes live races while the other tracks offer simulcast betting. Just like parimutuel wagering on horse racing, greyhound racing is governed by the Texas Racing Act, enforced by the Texas Racing Commission.
Indian Casinos in Texas
Indian casinos are allowed to operate in Texas, and their rights are protected under the Indian Gaming Regulatory Act (IGRA). Texas has three tribes that are federally recognized, and all three of them operate a casino. The Tigua tribe of the Ysleta del Sur Pueblo owns the Speaking Rock Entertainment Centre in El Paso, while the Kickapoo Traditional Tribe of Texas owns a casino in Eagle Pass known as the Kickapoo Lucky Eagle Casino. The Alabama-Coushatta Tribe owns Naskila Gaming in Livingston.
Two of these three casinos have been at the center of years of litigation, since the state of Texas holds the opinion that both these casinos are illegal. What makes the legal aspect of Indian casinos in Texas interesting is how the disputes with the state have been handled in the absence of a centralized regulator.
Casinos in Texas have tried to expand their offerings over the years, in a push to legalize class 3 gaming in their establishments. However, courts have sided with the State on the matter, and this precedent has led to a cycle of closures and reopenings of casinos ever since. With these restrictive laws, the chances of online casinos becoming legal in Texas is near future are almost zero.
As of 2017, the state has filed a suit to close the casinos owned by the Alabama-Coushetta and the Tigua tribes – shortly after the National Indian Gaming Commission held the opinion that the two tribes were allowed to organize casino games in their properties. This opinion was contrary to court rulings that stated otherwise.
