Although poker rooms are closing in Las Vegas and in other casinos around the world, one spot where they seem to be doing well is in Texas. These “social clubs,” which have been created under a very gray area in Texas law, have thrived during the COVID pandemic. There is one, however, that has recently closed under questionable circumstances, and it is notable because of some sort of ties with a former World Champion.
What We Know About Johnny Chan’s 88 Social Club
Approximately six weeks ago, noted poker podcaster/raconteur Todd Witteles spoke on his Poker Fraud Alert podcast about the travails of Houston’s Johnny Chan’s 88 Social Club. According to Witteles and others, players were cashing out their boxes on hold at the “social club,” leading to a cash shortage on the property. They were reportedly heading to another prominent “social club” that had just opened nearby.
That story faded into the background until recently. On Friday, players went for some action to the “social club” and found the doors locked up tight. This is problematic because many players still had cash in their boxes on the site and apparently many players had removed chips from the establishment and were holding them. Most players will do this with chips from a major casino or other legal poker room to have them at the ready when they hit the felt.
A phone call on Saturday brought an unofficial response from the club. After several rings, someone who did not identify themselves to Poker News Daily stated that the club was “undergoing an ownership change” and that the club would “reopen next week” after the ownership change was completed. The unidentified individual also did not seem receptive to any further questions, so we were unable to ask about any monies that may be on the property for players or whether the chips from the previous ownership would be honored. The potential is there that hundreds of thousands in chip markers could be in question.
What We Don’t Know About Johnny Chan’s 88 Social Club
The biggest thing that is not known about the business is just how much former World Champion Johnny Chan is a part of it.
It could very well be possible that Chan has simply allowed for his name to be contractually licensed for the “social club,” allowing them to use his name to garner both legitimacy and name recognition. In exchange for using his name above the door, Chan may have gotten several thousand dollars up front and has no hand in the ownership of the club. The other possibility is that Chan is the full owner of the club and has not been running it properly, something that is possible from allegations that have been raised.
Stories have arisen that part of the reason for the exodus from Johnny Chan’s 88 Social Club is that Chan himself allegedly backed a major player in several sports bets. When those bets failed to come in, the “major player” allegedly reneged on the bets and angered many members of the club. Those players that left were supposedly a major part of the larger game action at the “social club.”
Don’t Expect Texas Law to Come to the Rescue
The reason we have used “social club” in quotation marks through this article is that the laws regarding these groups in Texas is very much a gray area.
Gambling as a whole is outlawed in Texas, but a few years ago some entrepreneurial spirits found what they believed is a loophole in Texas law. Under the guise of a “social club,” people could pay a membership fee to enter an establishment and partake of the offerings of the business. In this case, the offering was poker.
These entrepreneurs had to follow some strict rules. There could be no rake taken from the games and there could be no fees taken from the player’s monies – in essence, all money would be returned to the players when they left the “social club.” How did the business make money? By selling food and beverages to the players, something that they could legally do without risking running afoul of the laws.
These “social clubs” have blossomed across the Lone Star State, and they have been allowed to with little to no resistance from district attorneys across the state. Because of the gray area of the laws, the DAs are not willing to try to bring prosecution against the businesses, which the businesses would welcome (in an odd way) because it would set a precedent for the activity. Furthermore, lawmakers in Austin have not touched the subject, allowing it to flourish unchecked.
Because of the lack of legal status, it would make any claims against Johnny Chan’s 88 Social Club exceedingly difficult. There is a “clean hands” law in many states that says you cannot sue for money that you obtain through illegal activities. Those who participated in the poker games at the “social club” would not have a recourse because they were participating in an illegal activity.
As of press time, people in Houston are waiting to see just what happens with Johnny Chan’s 88 Social Club. Will they reopen and, if they do, will the markers that players had – and the money that players had on site in their boxes – be accepted by the “new owners?” Regardless of these things, it is another tarnish on the world of poker and definitely a blemish against the name of one of poker’s legends.