As the second-most populous state in the country but with few legal gambling options, Texas is the definition of untapped potential. Horse racing betting, the state lottery and limited forms of charitable gaming are the only forms of explicitly legal gambling.
Texas is also home to two tribal casinos whose legality has been questioned by authorities over the years. However, both casinos seem to have finally established firm legal footing for the foreseeable future.
Private card rooms also operate in Texas, but those too are under fire and the future of such poker rooms is uncertain.
However, discussions regarding the legalization of casinos hit the Texas legislature every year. Pro-gaming lawmakers note that every neighboring state has casinos that siphon tax money out of Texas every year. There is clearly interest among some lawmakers, but so far these efforts have failed to gain the traction needed to make a serious push for legal gambling.
Forms of gambling available in Texas today:
- Horse Racing Betting: Live, off-track and mobile at tracks
- State lottery: Tickets only sold at retailers
- Charitable gaming: Bingo and raffles spread by registered charities
- Tribal casinos: Kickapoo Lucky Eagle Casino and Naskila Gaming
- Social gaming: Includes private poker clubs, although these face increasing scrutiny and some have been raided in recent times
Online Gambling in Texas
There is not much by way of mobile gambling in Texas. Racetracks allow customers to place wagers via mobile device while physically present as a convenience (no waiting in line), but all such apps disable wagering functionality as soon as the customer leaves racetrack property.
Daily fantasy sports sites such as FanDuel and DraftKings operate in Texas but even here their legality is questionable. Attorney General Ken Paxton issued an opinion back in 2016 declaring fantasy sports to be a form of gambling. It was a non-binding opinion, but FanDuel voluntarily left the market for two years while DraftKings remained operational throughout.
Both sites are now back in Texas, but the state still has not passed legislation to formally legalize daily fantasy sports.
Land-based Casinos in Texas
Two tribal casinos make up the extent of land-based gambling in Texas. Both have been involved in litigation for years as the controlling tribes contend they are within their rights to offer gambling on tribal land while the State of Texas argues their operations violate state law.
The tribes have suffered legal defeats in recent years but their casinos remain open to the public as of today, partially due to support at the county level.
Both casinos operate as Class II gaming facilities, which means they offer slot-like games based on bingo and non-house-banked card games such as poker.
540 State Park Road 56
|Kickapoo Lucky Eagle Casino & Hotel
794 Lucky Eagle Drive
Sports Betting in Texas
Sports betting is not legal in Texas. There has been no serious push in the state government to change that.
Lawmakers have introduced legislation to authorize sports betting, but those efforts have been met with little success in the face of strong, state-level opposition to all things gambling. The fact that even legislation to regulate fantasy sports has failed to gain traction shows the state is likely a long way from legalizing full-on sports betting.
Poker in Texas
Sadly, poker falls into a legal grey area in the state from which Texas Holdem poker derives its name. Social poker games are legal if they are held in a private place and no one makes money off the game other than through personal winnings.
Things become much more questionable when it comes to poker at bars and private clubs. Certain loose interpretations of the law have led to a preponderance of membership poker clubs in which customers pay for a membership or seat at the table and then play against one another with no rake taken out of the games.
Dozens of poker rooms operate under this belief, but law enforcement officials do not always see it the same way. A pair of Houston poker rooms raided in 2019 resulted in the arrests of nine people who were accused of money laundering and engaging in organized crime.
It seems these two poker rooms in particular attracted attention from law enforcement following complaints of “theft and terroristic threats,” but a statement from the Harris County District Attorney made it clear how TX law enforcement views poker:
“Poker rooms are illegal in the State of Texas. We are changing the paradigm regarding illegal gambling by moving up the criminal chain and pursuing felony money laundering and engaging in organized crime charges against owners and operators. Players are not being targeted.”
The only legal poker room in Texas that may take a rake is at Kickapoo Lucky Eagle Casino. It offers two weekly no-limit Texas Hold’em tournaments. Cash games are typically 3/6 fixed limit and 1/2 no-limit Hold’em. Busier times may find a pot limit Omaha game or larger no-limit Hold’em game.
Home Poker Games
Texas Penal Code § 47.02 provides an exemption from anti-gambling laws for social games as long as the following requirements are met:
- The game is hosted in a private place
- No person receives any economic benefit other than personal winnings; and
- Except for the advantage of skill or luck, the risks of losing and the chances of winning are the same for all participants
Fantasy Sports in Texas
Daily fantasy sports sites such as DraftKings and FanDuel accept customers from Texas, but the entire industry remains on very unstable legal footing.
A 2016 opinion from Attorney General Ken Paxton stated online fantasy contests meet the state’s definition of gambling and are therefore illegal. The opinion even mentioned DraftKings and FanDuel by name, but it was a nonbinding opinion and no enforcement action was ever taken against fantasy operators.
FanDuel exited the market for a time but rejoined in 2018, likely due to watching DraftKings operate for a solid two years with no legal repercussions.
The Texas Lottery was established by a constitutional referendum on November 5, 1991 that passed by a two-to-one margin. The first scratch-off ticket was sold on May 29, 1992 and the first lottery drawing tickets were sold later that year.
Lotto and scratch-off tickets are sold today by the Texas Lottery. Tickets must be purchased at authorized retailers. The TX Lottery does not sell tickets or offer instant win games online – all purchases must be made in person.
Texas Lottery Intrastate Lotto Games
- Pick 3
- Daily 4
- Cash Five
- Lotto Texas
- Texas Two Step
- All or Nothing
Texas Lottery Interstate Lotto Games
- Mega Millions
Games of Skill
Texas Penal Code § 47.01 states:
“Bet” means an agreement to win or lose something of value solely or partially by chance.
An offer of a prize, award, or compensation 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.
The gambling definition also excludes items valued at lower than $25 given away by a legitimate charity in a contest. Another notable exclusion is betting on races involving animals or vehicle racing.
Games of skill in Texas are legal but must be entirely based on skill. The state’s definition of gambling includes winning or losing money “solely or partially by chance.” This excludes anything that is not entirely skill.
As such, two participants may legally bet against each other on a game of chess or a contest of skill, strength or other athletic abilities. Trivia and other knowledge contests could also fall under this interpretation.
On the other hand, any game with cards or dice is bound to include at least some chance and would be illegal under Texas law. This relates back to the argument Attorney General Paxton used to declared fantasy sports as illegal gambling.
In his opinion, he noted that although skill does play a role in predicting the performances of players in sporting matches, Texas law states that an activity does not need to be determined primarily by chance to meet the legal definition of gambling. The existence of any luck at all is all that’s needed for an activity to be classified as gambling in Texas.
Texas gaming law does not address esports and esports betting.
Participating in a paid esports competition would likely fall under skill gaming exemptions the same as paying to participate in a real-world golf tournament with prizes would. However, spectators placing wagers on an esports event would violate Texas law.
Large player-vs-player esports betting sites such as GamerSaloon.com and PlayersLounge.co openly operate in Texas and have faced no legal issues to date.
Traditional Online Skill Games
Online skill sites are legal in Texas if the games are not based on any element of chance. This means GSN’s WorldWinner accepts Texans, as well as King Games. WPT Online also accepts players from Texas.
Skill-based Gaming Machines
Skill-based gaming machines are not legal in Texas.
There are three horse racing tracks in Texas, as well as some fairgrounds that offer betting on horses during special events. Sam Houston Park is the most active, with racing for more than half of the year. Ratama Park offers some races during the summer. Lone Star Park holds races in the spring and early summer.
These three racetracks have off-track betting parlors. This allows bettors to place wagers on horse races in other states. Each track has a mobile betting app. However, it may only be used on the premises of the track.
Texas Gambling Laws
Texas has little in the way of legal gambling. Charitable gaming was the first form to be legalized, back in 1982. Live horseracing was authorized in 1987. This later included off-track betting (on races held elsewhere) if it occurred on the property of licensed racetracks. Voters affirmed a state lottery in 1991 and Kickapoo’s Lucky Eagle Casino opened in 1996.
The following agencies regulate gambling in Texas:
On November 5, 1991, Texas voters ratified Referendum 11, the constitutional amendment that created the Texas Lottery. It passed by a 64 to 36 margin. Scratch-off and lotto tickets are permitted for sale by the state lottery. Tickets must be sold at retailers and internet sales are not permitted. Players must be at least 18 years of age.
Tribal Gambling Law
Tribal gaming is a contentious issue in Texas marked by long-running court battles and legal uncertainty.
There are three federally recognized tribes in Texas, but the Kickapoo Traditional Tribe of Texas is the only one that is formally authorized to conduct Class II gaming (bingo-based slots, live bingo and poker).
The Kickapoo Lucky Eagle Casino in southern Texas is the largest and longest-running casino in the state with 3,300 slots, a dedicated poker room and bingo in addition to an attached hotel. This casino faces no immediate threat of legal action.
The Alabama-Coushatta Tribe and the Ysleta del Sur Pueblo Tribe also either operate casinos now or have in the past. The Alabama-Coushatta Tribe operates Naskila Gaming, which offers Class II gambling games.
The Ysleta del Sur Pueblo Tribe operates Speaking Rock Entertainment Center, which is open but lacks gambling at the moment.
Both tribes have had a much more difficult time offering gambling with some lawmakers claiming they are not allowed to offer gaming. Unfavorable court rulings for these two tribes have put both casinos at risk of closure.
At issue for these two tribes the 1987 Restoration Act, which restored the tribes’ status as federally recognized tribes. The problem is the Restoration Act also includes text preventing the tribes from offering any form of gambling not legal anywhere else in Texas.
This issue does not appear in other states thanks to the Indian Gaming Regulatory Act, which allows tribes to offer Class II games (bingo and non-house-banked card games) with or without the state’s permission. However, multiple courts have ruled that the Restoration Act takes precedence in this case and the tribes would need new legislation either at the state or federal level to allow them to offer bingo or other forms of gambling.
Texas Monthly provides a more detailed explanation of the legal battle here.
Texas law permits charities recognized by the state or federal governments to spread bingo and raffles. There may only be two raffles per year. Cash may not be given as a prize. Charities do not have to register to offer raffles.
Bingo is also permitted. This requires licensing that is dependent on the level of revenue raised by the charity. Annual fees start at $132. It goes up $132 for every $25,000 generated by the games. Organizations may hold three bingo sessions per week. Players must be at least 18 years of age.
Racing Betting Laws
Horseracing was legalized in Texas by in 1987 after a 50-year absence in the state. In 1937, the state legislature repealed pari-mutuel betting and reversed course in 1987 to bring it back. All bets must be made at a racetrack. Mobile betting on interstate races is only permitted on the racetrack’s property. Horseracing venues may also have off-track betting parlors. Bettors must be at least 21 years of age.