The Common Law

Under Texas criminal law, it is a Class C misdemeanor to bet money or any other thing of value on any game played with cards, dice, balls, or any other gambling device. Normally, this would be bad news for home poker tournaments. However, Texas has carved out an exception for informal home games. In order to qualify for this exception, you must satisfy three requirements.

First, the gambling must occur in a private place. In most cases, residences would be covered, however the law specifically excludes common areas of apartment buildings, hotels, and motels.

Second, no person may receive any economic benefit other than his or her own personal winnings. This means that the "house" cannot receive any monetary compensation for hosting the tournament. This would include "raking the pot" (claiming a percentage of the amount bet for the house) or charging an entry fee, separate from the amount being gambled, to participate in the game.

Finally, except for the advantage of skill or luck, the risks of losing and chances of winning must be the same for all participants. So if you're winning because you are an exceptionally good poker player or you happen to keep getting dealt good hands, then you are within the bounds of the law. However, if your winnings are based on cheating, then you have fallen outside this exception and can be held criminally liable.

This exception also applies to wagers made on the results of a sporting event, political election, or some other cultural event. So if someone wants to place bets on the NCAA tournament or whether Hillary will run for president in 2008, this is generally legal as long as it is done privately, nothing is taken in addition to legitimate winnings, and play is fair.