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 47.03 Gambling Promotion 47.04 Keeping a Gambling Place 47.05 Communicating Gambling Information 47.06 Possession of Gambling Device, Equipment, or Paraphernalia 47.07 Evidence 47.08 Testimonial Immunity 47.09 Other Defenses 47.10 American Documentation of Vessel Required 47.11 Deposits in Certain Accounts Not Consideration.
• Laws Surrounding Game Rooms and Eight-Liner Machines. The Texas Penal Code strictly forbids most forms of gambling. Chapter 47 of the code specifically forbids betting money or anything else of value on the outcome of a card game or any game of chance. According to section 47.02, a person commits an offense if he or she.
• Penal Code Section 47.02 outlaws gambling 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.” The only exceptions to this statute exist where a bettor places a bet in a private place or pursuant to a raffle, a bingo game/contest, or a raffle.
• Under Texas law, a person who unlawfully allows gambling to take place in a building or on property he owns or controls can be charged with a class A misdemeanor. If convicted, he faces a fine of up to $4,000 and a jail term of up to one year.

Gambling in Pop Culture

National Gambling Impact Study Commission. 3, 1996, 110 Stat. 1482, as amended by Pub. 105–30, § 1, July 25, 1997, 111 Stat. 248, established the National Gambling Impact Study Commission to conduct a comprehensive legal and factual study of the social and economic impacts of gambling in the United States on Federal, State, local, and Native American tribal.

Pop culture has drawn a distinction regarding gambling that has become an urban legend. That is, there is a perception that somehow 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.”

Molly’s Game (2017)

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

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?

One of the most common federal statutes used to prosecute interstate gambling crimes is 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.

Federal Law: Prohibition of Illegal Gambling Businesses

In terms of gambling prohibitions, federal law is largely based upon state law. That is, federal law prohibits activity that is already prohibited in a given state. 18 USC 1955 prohibits a person from conducting, managing, supervising, directing, or owning “all or part” of an illegal gambling business. Thus, the operative question becomes what constitutes an “illegal gambling business?” Under 1955(b)(1)(i), such a business is one which operates in “violation of the law of a state or political subdivision in which it is conducted” and involves 5 or more persons who conduct or finance such business and has a gross revenue in excess of $2,000 in a single day. In other words, federal law prohibits gambling activity at a higher threshold than most state laws.

Violation of 18 USC 1955 carries a penalty of up to 5 years imprisonment and a fine up to twice the pecuniary gain of the enterprise.

While the statutory sentencing boundaries include sentences between 0-5 years, the United States Guidelines envision sentences shorter than five years. Even though the Guidelines are no longer mandatory, they are consulted by judges in every case. Violations of this statute involve a base offense level of 12 which envisions anywhere from a 10-month sentence to a 37-month sentence, depending upon the criminal history of the particular person charged.

Under the same section, any property used in violation of Section 1955 may be forfeited to the United States. This would include all money involved in bets as well.

Trends in Federal Prosecution of Gambling

These statutes often intersect the ever-growing landscape of the internet. In the last several years, the U.S. Government has prosecuted people from all over the country for the operation of an illegal gambling business. These prosecutions often include accusations that bookmakers and other participants engaged in acts of money laundering under 18 USC 1956 and 1957.

Illegal Gambling Texas Penal Codes

It is not uncommon for cases to be based upon people taking bets and relaying such bets to offshore gambling websites. These sites can track bets, wins, losses, lists of persons owed and persons owing.

Even individuals who take bets and do not place money in the sites may still be prosecuted. People who use the sites to simply serve as a ledger have been prosecuted.

Illegal Gambling Texas Penal Code

Also controversial is the government’s use of 1955 to pursue per head players. This is a term that describes a compensation arrangement whereby bookmakers pay for a service per month per player to set betting lines and tracking wins and losses and amounts of such.

Ultimately, state and federal authorities still retain the power to prosecute a fair amount of gambling activity.

People facing charges under 1955, 1956, or 1957 need to take immediate action to counteract the government’s case. It is important to differentiate money and accounts involved with any betting activity and those that do not. It is also important to consult tax payment history and take other steps to evaluate whether the government can establish that more than five individuals were actually involved in the alleged enterprise. It is also important to gather and examine records pertaining to assets and accounts that may have received deposits from sources that are not traditional or look like gambling activity.

These steps are critical in any challenge to an accusation that a person engaged in the operation of an illegal gambling business. It’s also important to begin a dialogue with government prosecutors and agents to examine case discovery. It is also necessary to have a working understanding of federal law, federal procedure, and advocacy within federal courts.

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Is Gambling Illegal in Texas?

In step with federal law under Dicristina, the State of Texas defines the term “bet” as “an agreement to win or lose something of value solely or partially by chance.”

The definitions under Texas Penal Code 47.01 describe gambling in Texas:

47.01(2)(B) defines bookmaking as acts where a person (or entity) receives and records or forwards offers to bet totaling more than $1,000 in a period of 24 hours.

47.01(2)(C) defines bookmaking as a scheme by three or more persons to receive, record, or forward a bet or an offer to bet.

47.01(3) defines a gambling place as “any real estate, building, room, tent, vehicle, boat, or other property whatsoever, one of the uses of which is the making or settling of bets, bookmaking, or the conducting of a lottery or the playing of gambling devices.

These definitions become important in both Texas and federal courts because federal law largely bases its rules upon state standards for gambling activity.

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 on the performance of a participant in a game or contest. A bet is an agreement to win or lose something of value solely or partially by chance. It specifically excludes an offer or a prize or award to the actual contestants in a bona fide contest for the determination of skill, speed, strength, or endurance or to the owners of animals, vehicles, watercraft, or aircraft entered in a contest. It is a defense to prosecution if no person received any economic benefit other than personal winnings. Under Texas Penal Code sections 47.01 through 47.06, the state also criminalizes gambling by disallowing any bookmaker to record or forward more than five bets in 24 hours. Operating establishments that qualify as gambling places or possessing gambling devices is also illegal.

Texas State Offense: Gambling

Penal Code Section 47.02 outlaws gambling 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.” The only exceptions to this statute exist where a bettor places a bet in a private place or pursuant to a raffle, a bingo game/contest, or a raffle.

Illegal Gambling Texas Penal Code Statutes

A violation of Texas Penal Code 47.02 is a Class C Misdemeanor which carries a penalty of a fine up to $500.

Texas State Offense: Gambling Promotion

Penal Code 47.03 creates an offense for gambling romotion. 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.

Texas State Offense: Keeping a Gambling Place

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.

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.

Illegal Gambling Texas Penal Code 459

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.

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.

(a) A person commits an offense if he intentionally or knowingly does any of the following acts:
(1) operates or participates in the earnings of a gambling place;
(2) engages in bookmaking;
(3) for gain, becomes a custodian of anything of value bet or offered to be bet;
(4) sells chances on the partial or final result of or on the margin of victory in any game or contest or on the performance of any participant in any game or contest or on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or
(5) for gain, sets up or promotes any lottery or sells or offers to sell or knowingly possesses for transfer, or transfers any card, stub, ticket, check, or other device designed to serve as evidence of participation in any lottery.
(b) An offense under this section is a Class A misdemeanor.

Terms Used In Texas Penal Code 47.03

• Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
• Misdemeanor: means an offense so designated by law or punishable by fine, by confinement in jail, or by both fine and confinement in jail. See Texas Penal Code 1.07
• Person: means an individual or a corporation, association, limited liability company, or other entity or organization governed by the Business Organizations Code. See Texas Penal Code 1.07