Casinos are illegal in Texas. But the Texas Lottery Commission estimated 30,000-150,000 illegal slot machines in the state make .9 billion a year. The so-called eight-liners are located in abandoned or fake businesses, including spaces that look like karate schools, car dealerships, lawn mower repair shops and even a molecular laboratory.
In Texas, the only legalized forms of gambling are the state lottery and charitable bingo. State law forbids any other business to pay out prizes worth more than $5 or more than $5 in cash. The law dates back to 1993 when state legislators approved a measure intended to ensure amusement games like those at Chuck E. Cheese’s or a carnival that awarded stuffed animals would not be considered unlawful gambling devices.
Today the state collects $10 million a year on legal eight-liners, pool tables and other devices under a tax on coin-operated machines. But it’s impossible for state officials to know which slot machine operators are making illegal cash payouts. They say local authorities must enforce gambling laws but local officials lack the resources to investigate if cash is being exchanged. Some poorer communities raise revenue by requiring casinos to pay for costly permits.
The industry has grown so large, especially near the border, that it has attracted the attention of the federal Department of Homeland Security. For example, in 2011 in Brownsville in Cameron County, the department began investigating money-laundering activity associated with eight-liner parlors. Officials discovered an estimated 9,000 machines making $300 million annually. Kevin W. Benson, assistant special agent in charge of Homeland Security Investigations in the Brownsville area said, “That amount of money is just a huge red flag for us at the federal level.”
Federal investigators shared their intelligence with District Attorney Louis V. Saenz, who authorized about 40 raids since April 2013 as part of Operation Bishop which effectively put an end to Cameron County’s eight-liner industry. “I’m not here to judge morally. I’m the chief law enforcement officer of the county, and it’s my job to enforce the law. We hit this place in La Feria that had been called ‘Little Vegas.’ It was like a compound where they had three different gaming rooms. They had their strobe lights, and their blinking lights and their signs. They’re doing it out in the open, blatantly. I wanted to steamroll them to send a message,” Saenz said.
Charitable bingo operations have felt the impact of illegal eight-liner gambling rooms. The state began regulating charitable bingo in 1981 and regulates bingo operators “to prevent fraud and protect the public,” according to the Texas Lottery Commission’s Charitable Bingo website.
Bingo operators are hopeful that House Bill 1127, which passed in 2013, will be extended to the entire state. A legislative committee report said that bill gave Harris and Willacy counties greater authority to regulate eight-liner game rooms, and provided civil and criminal penalties that “encourage stronger enforcement.” It noted “House Bill 1127 has been successful in driving illegal eight-line gaming rooms out of Harris County. This will have the two-fold benefit of decreasing illegal gambling in Texas and increasing the benefits of charitable bingo.”
But in some areas the law actually has had the opposite effect. A representative from the charities of Americana Bingo in McAllen said profits decreased by more than $347,000 in 2014, and in the last two quarters of 2014, Americana Bingo could not make any donations to their seven charities. “The charities of Americana Bingo attribute this almost completely to the proliferation of eight-liners in Starr County. 2015 promises to be much worse if enforcement action isn’t taken in Starr County and continued in Hidalgo County,” the bingo official said.
