Establishing A Card Club

Some forms of gambling are legal and other forms are illegal in nearly every state. Some states recognize exceptions to illegal gambling laws and permit certain forms of gambling to be legal. The states that recognize exceptions have statutes making certain forms of gambling illegal. In other states, exceptions are recognized in practice. This means that although they may be technically illegal, an individual is unlikely to be arrested for participating in them.

Common forms of legal gambling vary by state but often include:

• Social gambling;
• Lotteries;
• Charitable raffles;
• Bingo; and/or
• Horse or dog race betting.

Card clubs are a form of legal gambling known by many names including card rooms and card houses. These are places where individuals can go to play a limited selection of card games for money. These are typically open to the public or a portion of the public. Card rooms are regulated by both federal and state laws.

The majority of card clubs are located in Montana, which had more than 200 licensed card clubs as of 2013. California has the second most, with 88 licensed in 2013. In some cases, these card rooms are operated illegally, called underground card rooms.

What Types of Gambling are Allowed in Card Clubs?

Under card club gambling laws, only gambling with card games is permitted in card clubs. Which card games are permitted varies by state. Usually, types of poker and blackjack are allowed. Coin-operated machines, including slot machines, are prohibited in card clubs.

What are Examples of Federal Laws that Relate Gambling?

Gambling laws have evolved over the years according to acts passed by Congress. These acts regulate different aspects of gambling. The most prominent federal gambling acts include:

• The Wire Act of 1961, which involves using wire communications such as phones, faxes, etc., to place bets in interstate or foreign commerce;
• The Travel Act of 1961, which involves interstate travel for the purpose of committing illegal activities, including illegal gambling;
• The Interstate Transportation of Gambling Paraphernalia Act of 1961, which makes it illegal to transport certain items used for illegal gambling such as betting tickets or sports books;
• The Illegal Gambling Business Act of 1970, which imposes heavy penalties for large scale illegal gambling organizations;
• The Racketeer Influenced and Corrupt Organizations Act of 1970, which imposes heavy fines and jail sentences for people who participate in racketeering;
• The Professional and Amateur Sports Protection Act of 1992, which makes it illegal to place certain kinds of sports bets; and
• The Interstate Wagering Amendment of 1994, which regulates state laws on lotteries and prevents out of state residents from participating in state run lotteries.

How Do I Legally Establish A Card Club?

Every state has their own rules regarding the establishment of a legal card club. Some counties have further restrictions with the state. In most cases, an individual must obtain a license or permit from the city where they wish to open a card club. Usually, the chief of police determines whether an individual’s request to open a card club is granted or denied.

What are Some of the Things I Need To Know Before Filing a Request For a Card Club License?

The governing rules and restrictions for card clubs are similar to those for casinos. The requirements vary by state, but common application components include:

• The business status of applicant, including whether they are an individual, a sole proprietorship, a partnership, or a corporation;
• The application for a pointholder’s permit;
• The application for a key management employee’s permit:
• A description of the games to be played;
• A description of any other types of business to be conducted on the premises;
• A statement of the applicant’s experience with other card clubs; and
• A description of the security measures to be taken.

A pointholder is an individual who has an interest in the revenue or profits of a card club. Applicants for a card club license must list all pointholders and their personal histories.

A key management employee is an individual with the power to direct operations and/or direct supervisory and general employees of a card club. All key management employees must be listed along with their personal histories.

An attorney can assist with requesting a card club license. They will be able to review the specific requirements for the jurisdiction in which the individual is applying.

What Happens if I am Caught Running an Illegal Gambling Business?

Federal gambling laws prohibit the running of an illegal gambling business. Federal and state laws apply to gambling regulation. These laws carry steep penalties.

Federal law applies to nearly every type and aspect of gambling. It attempts to cover any gaps in state gambling laws. Areas regulated by federal laws include:

• Transportation and possession of gambling devices and/or paraphernalia across state lines;
• Sports betting in a state that is different from the state the event is held;
• Where and how bets can be made; and
• Some aspects of internet gambling.

Depending on the activities the individual engages in, penalties for violating federal gambling laws may include:

• Jail time;
• A felony conviction;
• Large fines; and/or
• Forfeiting any winnings.

Running an illegal gambling business violates federal gambling laws. An individual who owns or manages an illegal gambling business may face fines and/or imprisonment for up to 5 years.

Can I be Prosecuted for Gaming if I Have a License?

An individual who legally obtained a card club license can not be prosecuted for running the club according to the terms of the license. However, slot machines may be seized as they are not permitted in card clubs.

Running the card club outside the terms of the license may result in the license being revoked and/or the owner being charged with a crime for misuse of the license.

Once I Obtain a Card Club License, May it be Revoked?

Yes, a card club license may be revoked or denied under certain circumstances. In most cases, the card club license is valid for one year. Circumstances that may cause that license to be revoked include:

• An applicant withholding information on the application;
• An applicant making material false statements on the application; and/or
• An operator’s willful operation of the gambling site without a license.

Do I Have to Be a Certain Age to Legally Gamble?

Yes, most states require that an individual be over the age of majority to legally gamble. In other states, an individual must be 21 or older to gamble. In most states, it is illegal for minors to gamble and/or play games of chance, including professional or college sports pools, poker games, and/or betting on school sports.

The consequences for illegal gambling vary by state, but may include:

• A misdemeanor charge;
• A felony charge;
• A fine; and/or
• Jail time.

Do I Need An Attorney Experienced In Gaming Law?

Yes, if you are interested in obtaining a license for a card club, you should consult an experienced entertainment lawyer for assistance. They can review local laws and ensure you comply with the application process and license requirements once obtained. It is important to know what the requirements are in your area to avoid any type of criminal liability.

If you are facing charges as a result of a card room license, it is important to consult with an attorney. They may review your case, determine if any defenses are available to you, and represent you during any court proceedings, if necessary.