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Opening a Card Room in Houston (1 Viewer)

Av8tion

Av8tion

3 of a Kind
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So after contributing to @TwoHomie 's post about opening a card room in Texas... it got me going back to the drawing board on my idea of opening one on my own... and the more I talk with my co-workers about it, the more of a real possibility it becomes.

Here are the initial thoughts:

Relatively small space, probably no more than 2,000-3,000 sq ft

Located within walking distance of the IAH airport hotels that are frequently occupied by airline crew members.

5 regular tables and a "feature table" for high-stakes games, tournament FTs and maybe a weekly/monthly live-stream

Lounge area with couches, food/beverages, maybe one of those coin-operated pool tables and some arcade games.

Catered to attract transient airline crewmembers and travelers, who will in turn attract regs looking to make money off of them.


If I end up going ahead with the idea of getting this off the ground, I will share the journey here on the forum and elicit suggestions/ideas from the members here. This would be a unique chance for the forum to help with the formation of a poker room... making sure it's built and run the way poker players would want it to be run.


Let me get the obvious comments/questions out of the way...

NO, I am not getting Paulsons... the reasons for that are many and obvious... most likely they will be ceramics...

YES, I will offer to sell our $1s and $5s at face value + shipping to the membership if there is interest for it.... and I will order enough chips to handle a massive harvesting operation if need be... I might even add in a Grand Opening run for this purpose...

I will be contacting PokerAtlas for a quote for their TableCaptain system to allow for live waitlists, player-tracking, etc... it seems like good system and a lot of card rooms around here use them.



I am curious to see what some of you have to say about the idea. While the Houston poker scene does seem to be a little crowded, the only one reasonably close to the airport is The Hangar, and they aren't going after the same player type and they aren't as conveniently located for those without cars as I plan to be. Any and all constructive feedback is welcome.

If you live in the Houston area and are interested in partnering up to get this off the ground, let me know and maybe we can work something out. Also, anyone who would like to help out in the design of the chip labels, custom cards / cut cards / dealer buttons / etc. let me know and I'll get in touch with you if this does actually launch.
 
Aren't Texas cardrooms fairly prone to getting raided due to them operating in a fairly grey area of the law?

Or can you just get a licence to operate legitimately?
 
No gaming license needed... dealers and servers would be contractors instead of employees... and yes... the initial investment would be fairly sizable and it would take a month or two to build out... nowhere near a year...
 
Av8tion said:
No gaming license needed... dealers and servers would be contractors instead of employees... and yes... the initial investment would be fairly sizable and it would take a month or two to build out... nowhere near a year...
Click to expand...
no gaming license? wow. Texas is the wild west. Well, obviously I know nothing about TX. But if you need any help with the operations side of running a room I'd be happy to help.
 
Very interesting watching this for future update.

However like most business getting the crowd or player to visit the area will be most important concern after this initial capital output

Poker is not fun if there is no crowd playing

GLWP
 
Obviously this would be awesome if successfully pulled off, but I'll revert to my true form and be a contrarian lawyer:

  1. Poker rooms in Texas are currently operating in a legal grey area. While they are starting to pick up some steam and gaining a greater amount of "legitimacy," you'll likely find yourself in the unenviable position of waiting for the other shoe to drop. You could tie up a lot of $$$$$ into this endeavor only for the state/local governments to take some action to close the legal loophole. Also, some enterprising local prosecutor could decide to litigate a case and win, or at the very least get a ruling from a judge that makes it clear these clubs could be closed and their owners prosecuted. Finally, the raids that happened back before COVID didn't result in prosecution, but the card rooms weren't operating for nearly 3 months while the legal process played out...Harris County could try it again, and even if you don't get closed or convicted, you could be out of action for months.
  2. The market is already pretty loaded, what are you going to do to set yourself apart? You'll likely operate at a loss for a reasonable amount of time while you try to establish yourself.
  3. Where are you going to get your dealers, floor personnel, etc....? You're not in Vegas where you have an ample number of those people in close proximity. Are you going to spend time and money training your own? Or are you going to throw money at people to leave their current gigs to come to you?
  4. Are you going to quit your day job to run this full time? Any small business requires a lot of time and effort to get started, especially in a market like this where you will be playing catch up with more established rooms and will be dealing with other new rooms popping up. If you are going to pay someone to run it for you, who is it? Are they capable? How much will you pay them? How will their pay eat into your razor thin margins when first starting?
My biggest concern is that the legal loophole will be closed sooner rather than later. COVID and the election drew a lot of attention away from this issue. There is absolutely no way the current status quo will be allowed to persist. There is too much money at stake and the existence of these loophole card clubs is a dent in the egos of the politicians and prosecutors who want them gone. Either the rooms will be shut down, or the current gaming commission will be expanded to regulate the rooms which will add significant costs and red tape to your operation. There's also no guarantee that you would be granted a license or have the resources to meet what ever requirements they might set.
 
chicubs1988 said:
Obviously this would be awesome if successfully pulled off, but I'll revert to my true form and be a contrarian lawyer:

  1. Poker rooms in Texas are currently operating in a legal grey area. While they are starting to pick up some steam and gaining a greater amount of "legitimacy," you'll likely find yourself in the unenviable position of waiting for the other shoe to drop. You could tie up a lot of $$$$$ into this endeavor only for the state/local governments to take some action to close the legal loophole. Also, some enterprising local prosecutor could decide to litigate a case and win, or at the very least get a ruling from a judge that makes it clear these clubs could be closed and their owners prosecuted. Finally, the raids that happened back before COVID didn't result in prosecution, but the card rooms weren't operating for nearly 3 months while the legal process played out...Harris County could try it again, and even if you don't get closed or convicted, you could be out of action for months.
  2. The market is already pretty loaded, what are you going to do to set yourself apart? You'll likely operate at a loss for a reasonable amount of time while you try to establish yourself.
  3. Where are you going to get your dealers, floor personnel, etc....? You're not in Vegas where you have an ample number of those people in close proximity. Are you going to spend time and money training your own? Or are you going to throw money at people to leave their current gigs to come to you?
  4. Are you going to quit your day job to run this full time? Any small business requires a lot of time and effort to get started, especially in a market like this where you will be playing catch up with more established rooms and will be dealing with other new rooms popping up. If you are going to pay someone to run it for you, who is it? Are they capable? How much will you pay them? How will their pay eat into your razor thin margins when first starting?
My biggest concern is that the legal loophole will be closed sooner rather than later. COVID and the election drew a lot of attention away from this issue. There is absolutely no way the current status quo will be allowed to persist. There is too much money at stake and the existence of these loophole card clubs is a dent in the egos of the politicians and prosecutors who want them gone. Either the rooms will be shut down, or the current gaming commission will be expanded to regulate the rooms which will add significant costs and red tape to your operation. There's also no guarantee that you would be granted a license or have the resources to meet what ever requirements they might set.
Click to expand...

1) There is a basically 0% chance of them shutting the poker social club thing down... there is far too much money that has gone into this over the past few years, and the municipalities desperately need the tax revenue these places generate. They've learned their lesson from trying to challenge these places in the past... it didn't go well, and they aren't about to try again.

2) Yes, the space is pretty dense, but as I said I'm using the location to target airline crews. IAH is a major hub for United and a bunch of regional carriers as well as a major overnight place for the other airlines as well. To make it a crew-friendly location (50% off daily fee and 10% off seat rental with airline ID or something like that) it has the potential to generate tons of transient traffic... pilots and flight attendants there to have fun and play for the night. That will attract some regs and pro players with all the extra dead money coming in each week. I will be floating the idea to the boards of the airline crews in the area to see if there is enough interest in the idea for it to "take flight"... and with crews always looking for something to do during their overnights (especially within walking distance) I think there's a good chance of success.

3&4) I am looking to start dealers a little above the current market rates in order to entice them to come over. $10/hr + tips for dealers, $15-20/hr + tips for the floormen and one salaried General Manager to handle the day-to-day operations so I can still work my airline job.

Also @casinochipper22 I have a feeling that as this goes on from theory to planning to execution I'll be having quite a few conversations with you :)
 
Av8tion said:
1) There is a basically 0% chance of them shutting the poker social club thing down... there is far too much money that has gone into this over the past few years, and the municipalities desperately need the tax revenue these places generate. They've learned their lesson from trying to challenge these places in the past... it didn't go well, and they aren't about to try again.

2) Yes, the space is pretty dense, but as I said I'm using the location to target airline crews. IAH is a major hub for United and a bunch of regional carriers as well as a major overnight place for the other airlines as well. To make it a crew-friendly location (50% off daily fee and 10% off seat rental with airline ID or something like that) it has the potential to generate tons of transient traffic... pilots and flight attendants there to have fun and play for the night. That will attract some regs and pro players with all the extra dead money coming in each week. I will be floating the idea to the boards of the airline crews in the area to see if there is enough interest in the idea for it to "take flight"... and with crews always looking for something to do during their overnights (especially within walking distance) I think there's a good chance of success.

3&4) I am looking to start dealers a little above the current market rates in order to entice them to come over. $10/hr + tips for dealers, $15-20/hr + tips for the floormen and one salaried General Manager to handle the day-to-day operations so I can still work my airline job.

Also @casinochipper22 I have a feeling that as this goes on from theory to planning to execution I'll be having quite a few conversations with you :)
Click to expand...
You're probably right that they won't shut everything down, but I would bet my life that they will take control of the market through regulation. What happens when the gaming commission requires an expensive license, sets a other standards that increase operating costs significantly, and then starts taxing the shit out of you? The other issue will be that once this leaves the legal grey area and poker gets the blessing from the state government, major operations will move in and set up shop. I'm not saying you can't make it, I'm just saying that for a small room that is starting up and being operated as a private business without a major entity backing it, any change to the status quo will be bad for you. Right now is your ideal; they aren't shutting the rooms down and their isn't much regulation, so you have lower operating costs, no real licensing standards, and larger gaming companies are sitting on the sidelines waiting to see what happens. An expansion in legal gaming in Texas would be a gold mine and would result in your competition not being The Hangar Poker House, but rather something massive like The Hard Rock Houston.
 
How much does an appropriate security system (initial capital) and security program (staff to operate it correctly) cost? That seems like a department that can’t be hourly positions? I don’t know anything about it so just asking. Just seems like lots of cash on hand pretty much all the time and someone has to keep up with it. Internally and externally.
 
LeLe said:
You will need support staff like accounting / logistic / marketing

It going to cost you more money in long run if you think u can just hired someone that is a non specialist to cover this field
Click to expand...

Accounting would be the responsibility of myself and the GM with the help of software and tax professionals to make sure it's done right.

Logistics isn't that hard to handle as the operation isn't going to be all that complex... food would be delivered from nearby restaurants (I could even negotiate some sort of kick-back deal for having their menus in our room) and snacks and drinks can be ordered in bulk (BYOB BYOL so no need for a liquor license)

Marketing is actually the easy part. With my connections, I essentially have access to all the airline message boards and crew rooms. I can shower the crew rooms with cheap free stuff advertising our room (we love anything that's free or discounted) and word-of-mouth advertising in the airline industry travels fast... all we need to do is create an environment that they would want to visit and come back to.
 
Omar65 said:
How much does an appropriate security system (initial capital) and security program (staff to operate it correctly) cost? That seems like a department that can’t be hourly positions? I don’t know anything about it so just asking. Just seems like lots of cash on hand pretty much all the time and someone has to keep up with it. Internally and externally.
Click to expand...
The poker rooms in here aren't really actively monitored by a security department. The cameras, equipment, and software are certainly an expense, but the recurring costs is minimal compared to the scale of the operation.
 
Av8tion said:
NO, I am not getting Paulsons...
Click to expand...
idiocracy.jpg
But seriously, what a cool venture. I hope it's wildly successful!
 
TheB00T said:
So let's say you have a Dallas branch, then we can get GPI interested, no? (gaming license thing aside)
Click to expand...
If the Houston location launches and it goes good for a year or so, we can talk about opening up a location near DFW.... same concept... plenty of crew bases there...
 
chicubs1988 said:
You're probably right that they won't shut everything down, but I would bet my life that they will take control of the market through regulation. What happens when the gaming commission requires an expensive license, sets a other standards that increase operating costs significantly, and then starts taxing the shit out of you? The other issue will be that once this leaves the legal grey area and poker gets the blessing from the state government, major operations will move in and set up shop. I'm not saying you can't make it, I'm just saying that for a small room that is starting up and being operated as a private business without a major entity backing it, any change to the status quo will be bad for you. Right now is your ideal; they aren't shutting the rooms down and their isn't much regulation, so you have lower operating costs, no real licensing standards, and larger gaming companies are sitting on the sidelines waiting to see what happens. An expansion in legal gaming in Texas would be a gold mine and would result in your competition not being The Hangar Poker House, but rather something massive like The Hard Rock Houston.
Click to expand...
But Casinos hate Poker. You think they would really open a casino that only dealt poker? According to the current management of casinos you would go broke because poker doesn’t pay.
 
ekricket said:
But Casinos hate Poker. You think they would really open a casino that only dealt poker? According to the current management of casinos you would go broke because poker doesn’t pay.
Click to expand...
Poker rooms can make some decent money. But looking at a poker room vs slot machines (which is what casino execs do) its night and day difference. A poker room takes up waaaay to much space and has a ton of payroll. Slots is a couple square feet and an outlet.
 
ekricket said:
But Casinos hate Poker. You think they would really open a casino that only dealt poker? According to the current management of casinos you would go broke because poker doesn’t pay.
Click to expand...
Only poker? Probably not, but I wouldn’t be shocked if a clear legalization of poker morphed into an overall expansion in legal gaming. Most states tend to be more accepting of slots and video gaming, so I wouldn’t be surprised if they expanded all gaming options
 
Will there be Omaha and double board bomb pots every dealer change? Is the target customer a degen or an OMC?
 
Anything I'd add here is duplicative - but it would surprise me if more than only a few rooms in town were making significant money, and even then the returns are likely pretty thin. I did some business model development on this several years back (before Post Oak/Prime etc.) on a similar membership based business model and although cool, couldn't make it make sense as a solid investment. It's like the restaurant business - high up front investment, low margin, and the 'cool, popular place' is going to shift every couple of years so it's going to cost money to both acquire a player base (that's likely already entrenched elsewhere) and retain your player base.

As others have mentioned you've got the dealers, the floor, the cage, security, and all the general administration costs of running a business. All being paid for by tables, if full, generating in the range of $70-$100 an hour in revenue x number of tables x busy hours per week. It can sound like alot until you are realistic about the costs that are going to go into generating that revenue - it's high.

On the staff side, you'd have a hard time classifying these people as contractors in a defensible way if any of them ever filed an unemployment claim or an EEOC complaint.

I'd be hesitant to build a business around this. The only way I've thought you could really make this work is make it exclusive and charge a serious annual or monthly membership fee, but then you'd have to invest in all the amenities that crowd would expect too.

Happy to chat further over PM if you have interest.
 

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