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It’s no secret that Texas is largely unfriendly to casino-style gaming, but poker is definitely on the upswing in the Lone Star State.
On Saturday Aug. 5, Texas’ latest poker club opened its doors for business. Located in a wealthy area of Houston, the Post Oak Poker Club has big plans for its business model, said its owner Daniel Kebort. His club, which charges for membership/entry and has seat rental fees by the half hour, is one of about eight poker rooms like it in the state, according to Kebort.
Kebort was instrumental in pushing for a path toward card playing in the state that bears the name of poker’s most popular variant. Kebort’s club follows Austin’s Texas Card House, one of the first clubs to test the rake-free model. Under Texas law, it would be illegal for the club to profit directly from the poker play, so clubs make their money from the fees, as well as food and beverage sales and other amenities.
Kebort wants his club to be a popular place to hang out not only for poker players but also for their friends and family. There are 12 poker tables at the Post Oak Poker Club, with a capacity for 20, he said. The establishment can hold 230 people. Card Player had the chance to speak to Kebort about his business model and how he plans to grow poker under Texas’ rules.
Brian Pempus: Can you talk about the market for poker in Houston?
Daniel Kebort: Houston is a massive market. Harris County has a population of about 6.5 million people. If Harris County was a state it would be the 25th largest in the country. Up until now, the options for poker players have been to drive out of state or to have private games which are hard to advertise and sometimes hard to find.
BP: How similar is this club to the room in Austin that you have been involved with?
DK: It’s a similar model; it operates on the same membership model and half-hour seat rentals for the cash games, and the seat cards for the tournaments are rentals of the seats themselves as well. Outside of that, it’s a different model as far as the segment of the market that it’s skewed toward. This is a much more upscale club. It’s in a very prominent location. Our location at San Felipe and Post Oak is pretty much the Rodeo Dr. of Houston. It’s a high-visibility, high-income area. It’s going to tap into the market the neighborhood provides us with. It’s going to give poker exposure at a different level. It’s known really well to the poker crowd, but putting something like this out there is going to open doors for the general public at large.
This isn’t the end of the line for what we are doing, we have a long-term vision for what these can do, including a way to create a licensing structure that can help the state regulate as these clubs grow. One of the biggest challenges of this all along has been perception. When you mentioned what we are doing in the beginning we were lumped in with liquor stores, gentlemen’s clubs and poker dens. We have been battling this perception. We have struggled to get the clubs perceived as the style, level of a country club. Now that we have this location, it’s going to be a much more casino-quality environment, and the goal is to change that perception and build around it. Our model isn’t just built on bringing in poker players. It’s set up to be an entertainment destination, where for every one poker player we have one non-poker player hanging out. We have a great menu, with a great kitchen staff. Right now we are BYOB, but we are working on getting a liquor license from the state. We have a full-service bar even with the BYOB concept. From that, we want to build a larger space and eventually have a spa component and some type of high-end shopping component.
BP: Given the neighborhood, do you plan on having high-stakes games? On your website it states that you have $2-$5 no-limit hold’em, but I imagine you’d get interest for bigger games.
DK: One of the rooms we have set off to the side to be exclusive is to try and draw some of the bigger games we have in Houston. There are a lot of [underground] games that are looking for a home, so we are trying to cater to that segment of the market as well. We are providing a full-service staff around games at any level the players are willing to bring it to. We have a lot of business people, oil and gas individuals who like to play poker here. We get a lot of poker pros coming through town. We’d like to provide an environment that makes them feel welcome and safe. Eventually, we’d like to see if we could get a tour stop, WPT or WSOP, one of the circuits to make use of our model somehow and do tournament series memberships where people can join during the length of the series that comes through.
BP: How does your membership and seat rental model compare with a traditional rake?
DK: In Houston, there are games that, as an unregulated rake, could be taking four or five times what is being regulated [in casinos] in other places. It’s not just about the money you are saving; it’s the safety and security. There are a lot of players who want to play more, but who don’t feel comfortable in some of the underground settings. So this is going to give a lot of those players a place to come to. I think the seat rental is paying for the peace of mind. If someone is winning a lot of hands they are going to be saving a considerable amount of money for the [poker room] features.
BP: Over in Oregon, the poker clubs have come under scrutiny and a big issue was over dealer compensation, including accepting tips. Can you do that at your club?
DK: The two things we have to really ensure to keep going with these clubs is that poker is taking place in a private place and that other than [the effects] of skill or luck there is no economic benefit to anybody. That means that 100 percent of what goes on the table wagered on poker must leave with the players. That includes money for tips. The minute you take a dollar out of that pot and hand it to the dealer or hand it to the waitress, that’s an economic benefit directly from the poker that the [state] can say is a violation of the law. We are trying to educate our players. Our dealers will have $1 coins, and they’ll be able to sell those for cash to players at the table. The players can keep a stack of golden dollars next to their chips to tip the dealers. Cash doesn’t play on the table, so it’s separate from the money used for the wagering. It gives the players a way to show their appreciation for the dealers when they need to.
BP: If Texas had poker widely available, do you think the state could have a poker market that could rival any of the other markets in the country?
Poker Rooms In Dallas Texas
DK: I think you could point to the fact that to the north of Dallas you have two massive poker rooms. You have the Choctaw Casino, which I believe is a 30-table room regularly. Card Player has stops there, the World Series comes there. They have massive stops because everyone knows it’s not the southern Oklahoma market, it’s the Dallas market. And then there’s WinStar Casino, which is not too far from there, and it has a massive 46-table poker room. That’s all within a 45 minute drive of Dallas. The fact that you can point to the Dallas market alone supporting 76 poker tables or more, plus these massive tournament stops, speaks to the size of the market in Texas as a whole. You have Dallas and Houston, two of the largest cities in the country, plus San Antonio and Austin, which are also very large markets and they are separated geographically. You have quite a drive to get to Louisiana, Florida and Oklahoma. There’s a huge market for these clubs in Texas. We want to tap into the tourist market, so we want people to know we are here when people come into Houston for business.
BP: Do you think the club model is going to be the way it is for poker in Texas for quite some time? I know every couple of years there are talks of legalizing casinos, but it seems like this will be the way it is for the foreseeable future, right?
DK: I think so. What we will try to do from here is work with the state to create some type of regulating language to license the clubs, and we can work with them to let them know what we are doing. I don’t see any large gaming intuitions coming into Texas given the political climate of the state. Maybe further down the road that could be a conversation to be had. It’s still an uphill battle for a casino to come into the state. There are now three poker clubs in Houston, and the three of us recently met to put together a singular effort on how to develop this model and move it forward from here. While we all agree that we are competition and want to compete for the best poker club in the state, we also see that there’s a purpose to unifying what we are doing to build momentum for us continuing forward together.
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