Is Gambling Illegal in Texas or under Federal Law?

Is Gambling Illegal in Texas?

In Texas, a person commits the offense of gambling if the person makes a bet on the partial or final result of a game or contest or the performance of a participant in a game or contest.

What is Considered Betting in Texas?

The State of Texas defines “bet” as “an agreement to win or lose something of value solely or partially by chance.”

When Will Texas Legalize Sports Betting?

What is Considered Gambling in Texas?

In Texas, gambling is defined under Penal Code Section 47.02 as betting on the outcome of a game, contest, or any other event where the outcome is uncertain or a matter of chance. It includes activities such as betting on sports games, playing poker for money, or gambling on casino games.

To be considered gambling, the activity must involve:

  1. A bet: There must be an agreement to win or lose something of value based solely or partially on chance.
  2. Chance: The outcome must be uncertain or dependent on chance, rather than skill alone.
  3. Prize: There must be a prize or something of value that can be won.

Not all gaming activities are considered illegal gambling in Texas. For example, private games where no one makes money from hosting the game, which is played with a “legitimate social relationship” among participants, are generally allowed.

What is Bookmaking in Texas?

In Texas, under Penal Code 47.01, “bookmaking” is defined as:

  • Recording or registering bets or wagers, or
  • Receiving, holding, or forwarding money or other valuable thing to be wagered on the result of a race, contest, or game, or on the performance of a participant in a race, contest, or game.

In simpler terms, bookmaking involves taking bets from others on the outcome of various events, such as sports games, races, or other contests. This activity typically includes recording the details of the bets, holding onto the money wagered, and then paying out the winnings based on the results of the event.

Bookmaking is considered illegal in Texas unless it is conducted in accordance with state laws that regulate legal gambling activities, such as the state lottery or betting on horse and dog races at licensed venues.

Punishment for Gambling in Texas

Penal Code Section 47.02 outlaws gambling including sports bets in the state of Texas with very limited exceptions. Specifically, it is illegal to make a bet on a sporting event or “game played with cards.” A violation of Texas Penal Code 47.02 is a Class C Misdemeanor which carries a penalty of a fine up to $500.

Punishment for Gambling Promotion in Texas

Penal Code 47.03 creates an offense for gambling promotion. That is, it is an offense to knowingly “operate or participate in the earnings of a gambling place,” “engage in bookmaking,” or even “become a custodian of anything of value” related to a bet.

Violation of Texas Penal Code 47.03 is a Class A Misdemeanor which carries a penalty of up to a year in jail and a fine up to $4,000.

Punishment for Keeping a Gambling Place in Texas

Penal Code Section 47.04 creates an offense for keeping a gambling place. That is, it is an offense to use or permit another to use any real estate, building, room, or other property whatsoever as a gambling place. There is a limited exception for persons who use a private place and receive no economic benefit other than personal winnings.

Learn more about keeping a gambling place.

In Texas, it is illegal to operate a casino. Keeping a place of gambling, communicating gambling information, or possessing a gambling device with intent to further gambling (such as renting slot machines for parties) are all illegal actions that are punishable by the Texas law. There is an exception for Indian reservations, where casino-style facilities are allowed in some locations.

Violation of Texas Penal Code 47.04 is a Class A Misdemeanor which carries a penalty of up to a year in jail and a fine up to $4,000.

Understanding Gambling Charges

The federal government, and to a lesser extent Texas, expends a vast amount of energy and resources prosecuting individuals associated with gambling crimes. This includes bookmakers and companies that assist in the placement of bets and collection of gambling debts.

Gambling in Pop Culture

Pop culture has drawn a distinction regarding gambling that has become an urban legend. That is, there is a perception that poker, as a game, does not necessarily constitute gambling because it is a game of skill rather than chance. The following two examples set the stage.

Rounders (1998)

Matt Damon’s character asks, “Why do you think the same five guys make it to the final table in the world series of poker?” What, are they the luckiest guys in Las Vegas? It’s a skill game, Jo.”

Is poker a game of skill

Molly’s Game (2017)

Jessica Chastain who plays Molly Bloom states, “Poker is a game of skill, not a game of chance.”

molly's game gambling

While the contrast between skill and chance makes for great theater, it is not necessarily recognized in courtrooms.  Federal law has consistently applied 18 USC 1955, a statute outlawing the operation of a gambling business, to poker. One case out of New York, United States v. Dicristina, contains a long list of such cases. In fact, in Dicristina the Second Circuit Court of Appeals specifically rejected the distinction between games that are predominantly games of chance and games that involve some measure of skill.

Put simply, the legal question is not whether an activity is predominantly based on chance versus skill. Rather, federal law applies the definition of gambling to games that contain some measure of chance. An examination of Texas state law and federal law illustrate the fallacy of the urban legend shielding poker from criminalization based upon its inclusion of elements of skill.

Is Gambling Illegal under Federal Law?

PASPA Ruled Unconstitutional

The Professional and Amateur Sports Protection Act (PASPA) was a federal law enacted in 1992 that effectively banned sports betting in most of the United States. The act was intended to protect the integrity of sports by preventing the spread of legalized sports gambling.

Under PASPA, it was unlawful for a governmental entity or a person to sponsor, operate, advertise, or promote betting or wagering schemes based on competitive sporting events. However, the act provided exemptions for states that already had legal sports betting in place before the law was enacted. As a result, Nevada was the only state where people could legally bet on individual sports games, while a few other states had limited forms of sports lotteries or pool betting.

The legality of PASPA was challenged in the case of Murphy v. National Collegiate Athletic Association. The state of New Jersey argued that PASPA violated the Tenth Amendment of the U.S. Constitution, which reserves to the states all powers not explicitly granted to the federal government. New Jersey contended that by prohibiting states from legalizing sports betting, PASPA was commandeering state legislatures by forcing them to maintain and enforce a federal ban on sports betting.

In May 2018, the Supreme Court ruled in favor of New Jersey, striking down PASPA as unconstitutional. The court’s decision was based on the principle of state sovereignty, holding that Congress could not compel states to enforce federal sports betting prohibition.

UIGEA Still Applies

The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 does not make online gambling illegal for individuals; instead, it targets the financial transactions related to online gambling. It prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.

The UIGEA has had a significant impact on the online gambling industry, particularly in the area of online poker and casino games. It led to the withdrawal of many online gambling operators from the U.S. market, as they faced difficulties in processing payments from U.S. customers.

However, the UIGEA does not affect all forms of online gambling. For example, online horse race betting and online lotteries are explicitly exempt from the restrictions of the UIGEA. Additionally, the law does not apply to online gambling that is legal under state law. In recent years, several states have legalized online gambling, including online poker and casino games, and these activities are not subject to the UIGEA’s restrictions within those states.

Federal prosecutors can use a violation of UIGEA to prosecute someone for wire fraud found in 18 USC 1084, which criminalizes using any wire medium, such as phone lines or the internet, to transmit wagering information. This statute also makes the proceeds associated with gambling subject to asset forfeiture.

For example, if a bookmaker uses the internet to place a bet online on behalf of customers and does so from a state where such a wager is illegal, then that person transmitted wagering information is in violation of federal law. Many online poker sites have been targeted for such prosecutions.

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Is gambling illegal in texas?

Gambling and Forfeiture of Assets

In both the federal and Texas systems, these offenses can support the forfeiture of any proceeds or equipment linked to gambling crimes. Further, crimes associated with gambling, such as money laundering and wire fraud, often accompany internet gambling cases.

Under Article 18.18(a) and (b) of the TCCP, all gambling proceeds and equipment are subject to forfeiture to the State of Texas. This is the case regardless of whether a criminal prosecution takes place for the underlying offenses.

Social Gambling in Texas

On the other hand, a Texas resident cannot be penalized for social gambling. This is considered gambling in games such as bingo or in raffles that are sponsored by charitable organizations. Also, bona fide contests of skill where money is involved are also allowed in the state.

There are also racetrack licenses for greyhound racing in the state. Those who participate in simulcast races and on-track pari-mutuel wagering are not breaking the law and will not be penalized for their actions. Also, licensed horse racing is permitted in the state of Texas and residents are permitted to bet on simulcast races and on-track pari-mutuel wagering.

Crimes Related to Lotteries in Texas

It is a crime to steal, forge, or alter tickets for the lottery, and to sell tickets at a greater price than originally listed. Also, it is considered fraud to influence the selection of the lottery winner. Individuals who attempt to do this can be penalized. In addition to this, in Texas it is illegal to sell lottery tickets to minors or to make lottery ticket sales over the phone.

How Gambling Prosecutions are Initiated

Not surprisingly, gambling cases often begin the same way most white collar crimes begin. That is, sometimes people are named as co-conspirators by targets of already existing federal investigations. Another common method federal agents use to locate targets is through the massive Currency Transaction Reporting Requirement apparatus that exists. Financial institutions, including casinos, are required to report various cash transactions. More important than such transaction reports are Suspicious Activity Reports (SARs). Casinos and banks are required to report any activity they deem suspicious. Oftentimes, people will purchase a lot of chips at a casino and then cash in those chips without engaging in much gambling activity. Ironically, this is a situation where choosing to gamble too little can actually put a person on the Government’s radar.

Regardless of how a case is started. Once a person is a target, agents will likely examine bank records, credit reports, and other financial documents to begin to develop the names of potential bettors who placed money with the target. If such named people cooperate, a case prosecution could result. Obviously, these types of actions are taken without the target’s knowledge. This means that if a federal agent approaches a person that person should assume the agent knows a significant amount about the person’s employment history and finances.

Gambling Defense

Are you or a loved one facing charges related to gambling? Call us today at (817) 203-2220 or reach out online. for a complimentary strategy session. Our team of former prosecutors and Board Certified Criminal Lawyers are here to help. During this call we will:

  • Discuss the facts of your case;
  • Discuss the legal issues involved, including the direct and collateral consequences of the allegation; and
  • Discuss the defenses that apply to your plan and in general terms discuss our approach to your case.
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About the Author Board Certified Lawyer Benson Varghese

About the Author

Benson Varghese is the managing partner of Varghese Summersett. He is a seasoned attorney, highly esteemed for his comprehensive knowledge and expertise in the field. He has successfully handled thousands of state and federal cases, ranging from misdemeanor driving while intoxicated cases to capital offenses, showcasing his commitment to preserving justice and upholding the rights of his clients. His firm covers criminal defense, personal injury, and family law matters. Benson is also a legal tech entrepreneur. Benson is a go-to authority in the legal community, known for his ability to explain complex legal concepts with clarity and precision. His writings offer a wealth of in-depth legal insights, reflecting his extensive experience and his passion for the law. Not only is Benson an accomplished litigator, but he is also a dedicated advocate for his clients, consistently striving to achieve the best possible outcomes for them. His authorship provides readers with valuable legal advice and an understanding of the complexities of the criminal justice system. CriminalPersonal InjuryFamily Law Contact
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