Texas has had a long and complex relationship with gambling. Laws have come and gone and continue to be highly divisive in the state that has an infamous record with resisting the legalization of gambling. In this article, we explore all the legal - and gray - areas of gambling currently available to players in the state, alongside a brief history of how gambling has evolved in the state over the last century or so.
Legal Online Gambling in Texas
The status of legal online gambling confuses a lot of Texans. That's because online gambling isn't strictly banned, though it isn't legalized and regulated. With that in mind, let's analyze Texas' online gambling industry.
Is Online Gambling Legal in Texas?
- Online Gambling Isn't Legal: As of June 2022, online gambling is not legal in Texas. In the simplest of terms, any online gambling avenues or games of chance that involve wagering real money are not recognized legally in the state.
- Sports Betting Isn't Legal: The same applies to sports betting, which has taken off at rapid speed around the USA, but is still facing stiff resistance in Texas. However, like most major states, there does exist a gray area in which online gamblers could operate.
- Offshore Online Casinos: The law around online gaming doesn’t explicitly state that signing up on offshore websites is illegal. In principle, that gray area means that any residents of Texas could easily get onto some of the online casinos listed above, make deposits, and place wagers; there is nothing written in the law that prohibits a Texas resident from doing so.
Having said that, section 47.02 of the Texas Penal Code states that:
a) A person commits an offense if he:
(1) 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;
(2) makes a bet on the result of any political nomination, appointment, or election or on the degree of success of any nominee, appointee, or candidate; or
(3) plays and bets for money or other thing of value at any game played with cards, dice, balls, or any other gambling device.
This same section of the code also states that marketing and advertising that “furthers gambling” will be considered illegal and subject to relevant penalties. So, if you’re looking to place an online wager, keep these in mind.
- Texas Online Gambling Enforcement: While the laws haven’t quite gotten up to speed with the global nature of online gaming, there is still a risk if the authorities catch wind of online real-money gaming activities.
- No Legal Protection: On a more practical level, the risks of engaging with offshore platforms exist. While there is scope for treating the legal gray areas as a loophole, the potential downside of engaging with operators who aren’t licensed in the USA is considerable. You will lack legal protection against fraud and other issues, and there is the possibility of running into bad-faith actors in the industry.
- Avoid Texas Online Casinos: For that reason, it's best to avoid online casinos in Texas.
What Is Banned and What Isn’t?
As things stand, only land-based casinos have any kind of leeway when it comes to gambling in Texas.
- Pari-Mutuel Betting: Gambling is legal for horse racing and greyhound racing.
- Daily Fantasy Sports: Daily fantasy sports are also allowed - the latter, however, is not explicitly laid down in law.
- Lottery Betting: Texas has a state lottery, while it's also a member of the Powerball and Mega Millions multistate lotteries.
- Charitable Gambling: Bingo halls and charitable raffles are legal in Texas, if the organizer is a licensed charity.
- Social Wagering in Texas: Office pools (social wagering) are also allowed in Texas.
- Ban on Online Gambling: The only explicit bans are on online gambling.
- Legal Gambling Age in Texas: You must be at least 21 years old to gamble in Texas.
Poker Clubs in Texas
A lot of private poker clubs have emerged in Texas since 2015, when Texas Hold’em player Sam von Kennel found a loophole in Texas’ gambling laws; the law says that it is illegal for casinos to take a cut of the pot. Von Kennel’s way around this stipulation was to charge players a membership fee upfront to enter his private club, instead of the traditional commercial casino standard of taking a cut of the pot.
How Texas Poker Clubs Work: This is the standard procedure for poker clubs - they technically offer games in private settings, which is legal, charge people by the hour to play in their establishments, and remove the concept of a house. In essence, it is players taking on other players, which brings in an element of skill to the whole situation, rather than the traditional setting where players are betting against the house.
- Texas Poker Club Licenses: There are poker clubs in Texas who have professional licenses based on these tenets that they will not rake. As of now, the only way these establishments are policed is based on whether or not there is a house element to it.
- Texas Restaurants and Poker Clubs: To add an additional layer of safety, there are poker clubs that operate as subsidiaries of steakhouses, for instance, which offer members-only poker games.
- Local Law Enforcement: While there is resistance to this concept by local law enforcement officials who don’t want gambling establishments anywhere near their communities, there is no legal resistance to the idea of these clubs.
- Texas State Attorney General: The State’s Attorney General, in fact, has not made any major interventions in recent history. There have, however, been poker club owners over the years who were charged with money laundering as part of engaging in organized crime activities. Do your due diligence before putting in your money.
Sweepstakes Casinos
Real money gambling in online casinos is neither legal nor regulated in Texas at the moment, though participating in sweepstakes casinos exists in a legal gray area.
- Sweepstakes and Federal Law: Sweepstakes are allowed in the USA by Federal Law, and this is based on the fact that there is a social gaming element to it. The underlying condition on which sweepstakes contests are allowed is that no money is required for a player to enter a sweepstakes contest.
- Texas Sweepstakes Casinos: Based on this, sweepstakes casinos have gained popularity - they simulate real money gambling, winnings from which can then be turned into real money in a roundabout way.
- Virtual Currency: There is only one major distinction between playing in a regular online casino and a sweepstakes casino. With the former, there is a pretty well-set process worldwide - you register on the platform, make a real money deposit, and head into the casino’s various rooms to gamble. With sweepstakes casinos, however, there is a middle step in the form of virtual currency and chips.
- Sweepstakes Coins: In general, when you sign up for a sweepstakes casino, you get a welcome bonus consisting of a little pot of the virtual currency that the casino offers. These are most commonly known as sweepstakes coins, and they are your access to the various games that the casino offers. As you play and win, this pot grows, without you having spent any money but being eligible for prizes. This is the most widely available model of sweepstakes casinos in the market.
- Buying Virtual Currency: There is another model, used by the more seasoned players, in which you pay upfront to buy the sweepstakes casino’s virtual currency, and get yourself an amount of that casino’s virtual currency; once this step is done, the process remains the same - you get access to the various gaming avenues, and build up your pot.
- Are Sweeps Coins Real Money?: Depending on the platform you’re using, this pot of casino-sanctioned virtual currency can be traded in for either real money that you can withdraw - which is taxed by the IRS - or claim other prizes.
- Legal in 30 States: According to the US sweepstakes laws, this is a legal way of gambling and making winnings legal in 30 US states thanks to the Federal laws that govern it. For Texans, in particular, it is the simplest and safest way of going around the complex and opaque laws that have a stranglehold on gambling in the state.
- Withdrawing Full Winnings or Not?: The downside of using this method is that you don’t always get to withdraw your full winnings, with the platform generally taking a small cut. But, all things considered, that downside is a lot more palatable than the downsides from engaging in any other kind of gambling.
Key Differences between Real Money Casinos and Sweepstakes Casinos in Texas
| Online gambling in Texas with real money | Sweepstakes gambling in Texas |
| Illegal and doesn’t come with protections; lots of gray areas in the laws | Legal in all states, recognized by the Texas Gambling Commission |
| Participation completely at the discretion of the platform owners; no strong protections for players who are offshore | Can be accessed from any location in the United States, no laws related to residency |
| Requires real money to be deposited in offshore accounts | Can be played either with or without real money; legal solutions available in case of trouble |
| Generally, requires an element of experience and expertise, with little room to learn without taking losses | Virtual currencies form the core of this gaming method and you learn on your time without real-world financial consequences |
| Operated by for-profit businesses who generally only offer incentives and freebies up front | Almost all sweepstakes casinos give you free virtual currency to continue playing if you contact them directly |
Other Forms of Legal Gambling in Texas
While online gambling in Texas may not be formally legalized, there are several ways to gamble legally.
Horse Racing
The state of Texas has had many encounters with the law that allowed pari-mutuel betting at race tracks.
- 1933: Texas Pari-Mutuel Betting Legalized: Betting at the race tracks was first written into legislation in 1933.
- 1937: Texas Bans Horse Race Betting: Under the next governor, pari-mutuel wagering ewas deemed illegal again in 1937. It had to endure a decades-long fight before it was allowed again in 1987.
- 1987: Texas Legalizes Racebook Betting Again: Alongside greyhound racing, it is one of the few completely legal forms of gambling in Texas.
- 2022: Online Sports Betting Remains Banned: The catch is that placing online bets on horse racing is still illegal. However, that isn’t too much of a deterrent in Texas because there are several top-notch tracks around the state that aren’t difficult to get to.
- 2022: Texas Race Tracks Still Operating: Texas still has a few land-based race track facilities. They are Lone Star Park (Grand Prairie), Retama Park (Selma), and Sam Houston Race Park (Houston) are among the most popular horse race tracks in the state.
Daily Fantasy Sports
DFS has a complicated recent history in Texas. Here's how it works at present, and how the current laws came to be.
- 2019 DFS Law: Daily fantasy sports enthusiasts in Texas received their first thumbs up from the state in 2019, when the Texas House voted 116-27 in favor of legalizing daily fantasy sports being a game of skill and not a game of chance. Daily fantasy sports operators now face little resistance from the state.
- 2016 Ban by Ken Paxton: However, that wasn’t the case in 2016 when Ken Paxton, the Texas attorney general, claimed that operators like Sportsbook and Sportsbook were operating businesses that were illegally legitimizing bets under the garb of calling fantasy sports a game of skill. The companies contested this in court and won, having briefly been in danger of losing their businesses in the state, setting the tone for the bill that was later passed.
State Lottery
Texas began a state lottery in 1992 that is governed by the Texas Lottery Commission. The state regulates these lotteries and uses the revenue to fund public goods. Under the law, the following are legal and governed by the state: scratch-off tickets, Mega Millions, Powerball, Lotto Texas, Texas Two Step, Pick 3, and Daily 4.
History of Legal Gambling in Texas
It stands to reason that as the birthplace of Texas Hold’em, there is a long history of gambling in Texas.
- Texas Horse Betting History: Its first brush with legal gambling came in 1933 with the legalization of parimutuel betting on horse races. That reality is widely recognized to be a consequence of the Great Depression era, when the state’s coffers were running thin. That form of gambling is still prominent to this day.
- Tribal Gaming in Texas: Between then and now, however, there have been some complex issues. When the state of Texas seized tribal lands in the 50s and 60s, there began a long-standing dispute that continues to linger. With the nominal re-integration of the tribes into federal and state relationships, the Indian Gaming Act was formed, which gave the Indian tribes the right to operate gambling centers of the kind that were permissible anywhere else in the state.
- Texas Native American Tribes: However, multiple administrations with differing views subdued the growth of the casinos opened by the three major tribes of the state - the Kickapoo Tribe, the Tigua tribe, and the Alabama-Coushatta Tribe. The administration’s foibles typically centered around their belief that these casinos violated the Indian Gaming Regulatory Act.
- Speaking Rock Casino: Among the consequences was the shutting down of the Tigua tribe’s Speaking Rock Casino in 2002, which was rebranded and opened as the Speaking Rock Entertainment Center in 2016.
- Naskila Gaming: Additional prominent litigation occurred in 2016, when the state of Texas tried to shut down Naskila Gaming - which is run by the Alabama-Coushatta Tribe. In September 2021, a federal court ruled that Naskila Gaming is legal under a 1987 Restoration Act. It is among the prime land-based casinos that operate in the state, alongside the Kickapoo Lucky Eagle Casino.
Top Texas Land-Based Casinos
Kickapoo Lucky Eagle Casino (Eagle Pass)
Location: 794 Lucky Eagle Dr, Eagle Pass, TX 78852, United States
Gaming options: 1200+ slots games, roulette, Blackjack, Craps, Live Keno
Naskila Gaming (Livingston)
Location: 540 State Park Rd 56, Livingston, TX 77351
Gaming options: Slots and electronic games
Lone Star Park (Grand Prairie)
Location: 1000 Lone Star Pkwy, Grand Prairie, TX 75050, United States
Gaming options: Live horse race wagers
Retama Park (Selma)
Location: 1 Retama Pkwy, Selma, TX 78154, United States
Gaming options: Live horse race wagers
Sam Houston Race Park (Houston)
Location: 7575 North Sam Houston Pkwy W, Houston, TX 77064, United States
Gaming options: Live horse race wagers
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Online Gambling Texas FAQ
What happens if you gamble online in Texas?
While online gambling is not legal in Texas, players have traditionally not been fined or prosecuted. Like many states where gambling is illegal, the government prioritizes action against operators as opposed to individual players. That said, online gambling always carries a risk, so it's up to you whether you'd like to take that risk.
Are gambling apps legal in Texas?
As any sort of real money online gambling is illegal in Texas, use of gambling apps that require real money is not legal in Texas. However, there are many free-play gambling apps available for both iOS and Android, so players can still enjoy the thrill of gambling with none of the risk.
How can I legally bet online in Texas?
As there are no specific laws permitting legal gambling, you cannot legally bet online in Texas. However, many offshore casinos welcome players who live in Texas. These are often licensed and regulated entities with an international presence, but playing at them is something of a grey area, and there are no legal protections should you choose to do so.
What happens if you get caught gambling online in Texas?
The State of Texas does not expressly forbid online gambling, though it certainly doesn't legalize and license online gambling sites. If you're talking about illegal gambling in general, the fine for a first-time offender is $500. Theoretically, an overzealous local prosecutor might charge a Texas online gambler with illegal gambling and fine them $500, though this has never happened in the past.
Can you play at casino onlines for real money in Texas?
You can at offshore online casinos or sweepstakes casinos, but Texas does not license online casinos, so you do so without legal protection or consumer protections. While Texas officials have never prosecuted residents for gambling online, that does not mean they won't in the future. We recommend that players avoid playing at casinos online for real money.
What forms of online gambling are allowed in Texas?
Sweepstakes casinos operate in Texas. These sites use a sweepstakes game mechanic to pay off Sportsbooks at online casino games. Sweepstakes are legal in 30 US states. The typical sweepstakes casino offers sweeps coins and real coins. What players should realize is these sites are not licensed by the State of Texas at present, though they are deemed legal pending a court case to the contrary.
How are online casinos expected to benefit Texas?
Legal online casinos would benefit Texas by offering more revenues to the state government. This would lift the property tax and sales tax burden on Texas citizens. States like Georgia have laws that direct state lottery funds to the HOPE scholarship program. Texas online casino gambling could set up similar programs, so many potential benefits exist.
