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Texas’s Underground, Speakeasy-Land of Gambling

In Texas, it is illegal for casinos to pay cash for slot-machine winnings. But it is lawful to play on the machines, and receive non-cash prizes, like a stuffed bear.

Despite this ban, The New York Times reported Wednesday that those illegal cash payouts (which were observed by their reporter) are typically gleaned from underground, “speakeasy” type casinos -- featuring eight-liner machines -- are sliding by due to lax oversight from local authorities who say, among other things, they lack the resources to uncover every site where operators are making these payouts.

“They frankly are turning a blind eye to illegality,” a county attorney told the Times. “As pretty much everybody in the county knows, there are cash payouts. You see postings on Facebook of people winning.”

The Texas Lottery Commission estimates that the state has 30,000 to 150,000 illegal slot machines that make close to $2 billion per year. And many of those machines are played on under the guise of fake businesses.

“It’s like the poor man’s speakeasy in Texas,” Richard B. Roper III, a former federal prosecutor told the Times about the establishments, which appear to function as a variety of stores like tire shops or karate schools. “If the guy’s willing to pay off a cop, there’s got to be some money to be made.”

Carlos Bullock, a spokesman for the Alabama-Coushatta tribe, one of three tribes in Texas, has seen first-hand how these casinos operate. “They may be shut down one night and move to another place the next night,” Bullock told ICTMN. And once they are found out, they face little or no consequences. “Usually they’re just slapped with a fine,” he said.

But instead of the so-called blind-eye treatment that these individual operators receive for illegal gaming in the state, the tribes are having an altogether different experience as they pursue legal gaming.

The Alabama-Coushatta tribe and the Tigua tribe (Ysleta del Sur Pueblo) have had long legal battles with Texas over the right to operate casinos on their land. The third tribe, the Kickapoo Traditional Tribe, which is close to Houston, has fared better because they are not subject to the same state law restrictions -- currently, the tribe operates the Lucky Eagle Casino, a Class II gaming facility on their reservation.

Years ago, the Texas constitution prohibited gambling of any kind, and as a condition of their recognition (they were recognized under the Restoration Act in 1987) both tribes agreed not to allow gaming on to their reservations. The constitution was eventually amended to allow some Class II gaming like bingo, pari-mutuel race tracks, eight liner, and even the lottery to be legal, so the Alabama-Coushatta opened a casino, which was thriving, and profitable.

“We had lines around the casino with people waiting outside the door to get in,” said Bullock, a former chairman for the tribe. But in 2002, the Alabama-Coushatta, and the Tigua Indian tribe (that had set up a casino in El Paso), were forced to shut their casinos down. Since that time, Bullock said they have been in and out of litigation.

“We can’t do anything without state approval,” he said. “We can’t even do Bingo.”

Bingo is legal in Texas, but Bullock said the tribe wants to set their own limits on playing the game, operating under tribal authority not state authority. For example, in Texas, Bingo has a $750 maximum prize value and a four-hour per session playing time. The tribe would potentially want to change those rules and set their own.

RELATED:Texas Tribe Willing to Forgo $270.6M From Congress for a Casino

The Kickapoo’s Lucky Eagle Casino currently advertises Bingo: “special Saturday sessions with 10 games each paying out $1,000!”

But there is some hope for Bullock’s tribe. In March, Texas lawmakers introduced a bill to ensure that tribes are treated equally. "We are proposing a constitutional amendment that will bring equal treatment, fairness and equity to our three Texas tribes. We already have gaming in Texas, but for only one tribe, and that’s not right," Sen. Jose Rodríguez (D) said at a news conference March 12. “The Alabama-Coushatta in southeast Texas and the Tiguas in El Paso deserve equal treatment with the Kickapoos in Eagle Pass, who support this effort."

The bill is in committee.

“We’re not giving up on the state or the federal effort,” Bullock said. “We’re working on the right to get bingo.”