not a photo of the APC bustWell, it finally happened… the Austin Slot Gampang Menang Club got busted. It had a good run of 6+ months of regular poker action. It will probably not re-open.

I expected this to happen, as it wasn’t operating in a way likely to be legally defensible under Texas penal code. I actually did a lot of research into Texas gambling law and legal cases involving Section 47 before I joined the APC.

I came to two conclusions: 1. the club was probably not fully legal, and was probably going to be shut down some time in the future, but 2. if the club did get busted, no patrons would be arrested, and the worst thing that would happen is that you would lose your buy-in that night. (I read most of the cases in Texas history going back to the early 1900’s; no gamblers have ever been prosecuted in any bust of gambling places.)

So it was a low-risk proposition, and gave me the opportunity to play a little more regularly than I had been. I didn’t play there as often as some of my other poker buddies, but it was a great place — well-run, friendly staff and players, and excellent saturday tournaments.

Incidentally, I do believe that it’s possible to operate a poker club similar to APC in a way that’s totally legal under Section 47. It’s a pretty attractive proposition: I estimate APC probably booked over $150k in revenue in under 6 months and probably made over 50% margin. But I’ll never do it, because even a club operating in a way legal under Section 47 is virtually guaranteed to be busted in Texas, and might still lose a trial, making the owner a felon. My desire to not have a felony on my record slightly outstrips my desire to own a poker club.

Update: John Ogilbee pointed out that there are no felony gambling offences unless organized crime is involved; keeping a gambling place is a Class A Misdemeanor.

Section 47 has an overriding philosophy behind it that while social home gambling (with some important restrictions, like not playing “house games” such as blackjack) is perfectly legal, nobody should ever be profiting from gambling in Texas outside of their normal winnings. I’d like to think getting a group together to lobby for legal poker clubs in Texas would be a fruitful venture, but I doubt it would. The APC’s method of operation and really clean record of no bad stuff occurring there probably would help a case to legislators, though.

more on state-owned gaming

Minnesota Governor Tim Pawlenty has some things to say that would be well at home in the Illinois debate over the state taking over casinos:

If the only objective is to get money, then why don’t we have a government Wal-Mart or a government Target or a government Wendy’s? They all would make money for the government and they would have less negative impact on people’s lives.

Link to article on Minnesota gaming.

While Pawlenty is a staunch opponent of expanded gaming, he makes a good point. If Illinois Governor Blagojevich had suggested the state taking over Wal-Marts or Targets to expand tax revenue, he probably would have been instantly impeached.

The crazy thing about Illinois gaming is that the state already imposes a 50% tax on casinos — and which Blagojevich recently proposed increasing to 70%. This is not a tax on profit — this is a tax on all revenue above $200 million that a casino takes in (which Blagojevich wants to also lower to $100 million). So if the state thinks even that isn’t enough, you know people are really getting screwed.

States think that casinos are licenses to make money. They impose ever-increasing taxes on them to make up for their poor financial planning. This causes the casinos to make the rules to their games more favorable to the house, crank down payouts on slots, raise food and drink prices, and more aggressively target new customers. And then the states complain about the huge social cost of gambling and how everyone is losing their money in casinos.