By this time last year, the city of Victoria had issued more than three times the number of game room permits approved so far in 2019.
Seven months after the debut of a more thorough and stringent permitting ordinance that went into effect in January, the number of game rooms in Victoria remains in the single digits. And police raids targeting suspected illegal game rooms have for the time being ceased.
“I do believe the new ordinance has been successful in strengthening the application and review process for game room operations,” Victoria Police Chief J.J. Craig said in a written statement. “Since the moratorium last winter, we have not served any criminal search warrants at any game rooms.”
In 2018, the city granted 26 yearlong permits and 33 the year before, prompting some to wonder whether Victoria game rooms were operating legally. So far in 2019, seven permits have been granted.
Friday afternoon, five of those seven permitted game rooms were open, and customers escaped the blazing summer heat by playing the buzzing, flashing eight-liner machines under the watch of attendants. Some of the locations, like Diamond Game Room at 1501 N. Main St., had packed parking lots and as many as a dozen customers inside.
At each game room, employees and owners declined to comment, and phone calls requesting interviews went unanswered.
But not a single one of the five open game rooms displayed its ordinance-required sign warning of the penalties of gambling.
According to Victoria’s game room ordinance, “At all times during operation of the game room, a permittee shall display signs which ... include written language identical to the following in English and in Spanish: ‘Gambling is a crime. If you win more than $5 per play, you may be arrested and fined $500.’”
Game room critics, which include the police chief, say illegal gambling is not victimless because it can attract other crime and prevent sales tax from reaching the city. Permitting began in 2015 after a series of police raids for suspected illegal gambling.
“The VPD will continue to monitor game rooms for illegal activity and take appropriate actions on those that break the laws,” according to a statement issued by the department.
But the owner of a Victoria game room that closed in 2019 said the ordinance has not done enough.
“We could not compete with the illegal game rooms in Victoria,” she said, adding, “I’m frustrated that we were trying to operate legally, and that didn’t work for us.”
Anonymity was granted to that game room owner because she worried speaking out about illegal activity could result in violent reprisal against her.
At first, operating a game room legally seemed like a good idea to the woman. With an emphasis on having a “good, clean atmosphere,” the woman said she hoped those who loved gambling would want to play the two dozen legal eight-liner machines there for the opportunity to win prizes that included detergent, tools, toys, food, and various other items common to a discount retailer like Walmart.
According to the Texas Penal Code, game rooms can pay “not more than 10 times the amount charged to play the game or device once or $5, whichever is less,” meaning prizes also must be valued at less than $5. Breaking that law can land game room owners and their employees in jail with misdemeanor and even felony charges.
After completing the new 2019 permitting process that she described as “hard to meet,” the owner said she hoped to recoup her investment. Instead, she said, she lost money in the endeavor when customers slowed to a trickle, and the business was forced to close.
The former owner said customers told her other game rooms were illegally paying out cash.
Abul Azad, 40, said he opened Main Street Amusement in 2018 but closed the business after nine days because customers kept asking to be paid in cash.
“If I go to jail for five to 10 years, who will take care of my family?” he said.
Although Azad has since moved to New York City, he said many game rooms in Victoria illegally give cash payouts.
“Most of them are illegal,” he said, adding he thinks game rooms in Victoria are still giving cash-outs despite the new ordinance.
Passed by City Council members in November after a months-long permit moratorium and amid concerns that many game rooms were operating illegally, the ordinance placed stricter accountability on game room owners.
It required applicants to acknowledge they understood the illegality and consequences of operating an illegal game room, which the city attorney said would make potential prosecution easier. It also required property owners leasing to game rooms acknowledge they could be held criminally liable for illegal gambling there.
The changes also mandated game rooms must display signs in their windows requiring customers be warned of illegal gambling and its penalties.
Completing those requirements and paying a $780 fee, which was increased from $25, was difficult but worth it – if it meant that illegal game rooms would be kept out of Victoria, said the owner of the closed game room.
Victoria County Assistant District Attorney Jordan Fries said prosecuting owners of illegal game rooms is important.
“Not only are these institutions illegal in and of themselves under state law when they dispense cash, but they are also hubs of criminality,” he said. “Violent crime such as robberies and assaults are extremely common at these businesses because criminals know they carry cash.”
Fries also agreed that illegal game rooms can take sales tax revenue from the city.
“Most if not all of the owners are not from the community, so it could be argued that they are driving out local businesses and preying on local citizens to generate profits that do not benefit Victoria or Victoria businesses,” he said.
But investigating game rooms is not as simple as walking inside and checking for illegal activity, said Calhoun County Chief Deputy Johnny Krause.
In Victoria, police have relied on undercover investigations with police officers posing as players. After game room employees offer undercover investigators illegal payouts, police obtain warrants and return to seize property and make arrests. Getting those investigators past the wary eyes of illegal game room owners can be difficult, Krause said.
“It’s like somebody who wants to buy illegal narcotics. They are not going to sell just to anybody,” said Krause, adding, “They are very particular with who they will allow in to that circle.”
Although illegal game room activity is periodically interrupted by Calhoun County sheriff’s investigations and raids, Krause said, it tends to return after a time.
“We are expecting it to happen again,” Krause said.
Part of that reason, he said, is illegal gaming is simply profitable despite the legal consequences.
“It’s lucrative,” he said. “It’s the reasons casinos operate.”