Game room operators, local governments watch court case on 8-liner legality
Whether or not game rooms are legal operations may well end up before voters in a few years based on a recent court ruling involving the city of Fort Worth. If outlawed by voters, game rooms in the Highland Lakes, including Marble Falls, Burnet, Kingsland, Buchanan Dam, and Llano, would most likely have to shut down.
The Court of Appeals Second District of Texas at Fort Worth recently denied a motion to reconsider its decision declaring eight-liner machines illegal. The next step in the case would be to go before the Texas Supreme Court and then voters, who approved charitable bingo in 1981 and the state-run lottery in 1991. Until then, regulation can only come from the local level with limited power.
Earlier this year, the Llano County Commissioners Court voted to regulate game rooms, requiring owners to pay $1,000 a year for a permit. As of Aug. 1, five game rooms have applied for permits. Four were granted and one was denied because the owner filed after the grace period in the new ordinance had passed.
“We had four locations, including the one denied, that voluntarily reduced the number of games to less than six so they wouldn’t require a permit,” said Rick Sniktin, the game room administrator for Llano County.
The city of Granite Shoals also enacted a game room ordinance this year, asking for a $25 annual permit fee. So far, only one person has applied, but the building proposed did not meet requirements, according to Interim City Manager Peggy Smith.
District Attorney Sonny McAfee told DailyTrib.com his goal is to have all four of the counties in the 33rd and 424th Judicial Districts put ordinances in place to regulate game rooms. Only half have done so. Llano and Blanco counties both have ordinances, while Burnet and San Saba counties do not.
The case that could put game rooms on the ballot is the City of Fort Worth and David Cooke, in his Official Capacity as Fort Worth City Manager v. Stephannie Lynn Rylie, Texas C&D Amusements, Inc., and Brian and Lisa Scott d/b/a TSCA and d/b/a River Bottom Pub (No. 02-17-00185-CV). The case was originally filed in 2014 in the 17th District Court in Tarrant County by game room operators seeking to reverse city council-approved regulations. A 2020 decision that the machines were legal was appealed by the city of Fort Worth to the Court of Appeals Second District of Texas.
In March 2022, the appeals court overturned the 2020 ruling, declaring that eight-liners are illegal by the standards of the Texas Constitution. The court further upheld that ruling in July when it denied the appellees’ motion for reconsideration.
“Because we conclude that these eight-liner video slot machines are lotteries — a term more expansive than most would assume — they are unconstitutional,” reads the opinion written by Justice Elizabeth Kerr.
Arguments were brought before a three-judge panel from the seven-judge court that included Chief Justice Bonnie Sudderth and Dabney Bassel.
George Christian, president of the Texas Civil Justice League, wrote in an online article that he expects the game room operators involved in the case to appeal the decision to the Texas Supreme Court.
“For years, the industry has tried to get the Legislature to give its blessing to eight-liners, either statutorily or through a constitutional amendment,” he wrote after the court’s first ruling that the devices were illegal. “The court of appeals’ decision, if upheld, reduces the options to one: the voters will get the final say.”
Snitkin has been following the Fort Worth case with interest.
“We have all been kind of waiting for when that’s going to go to the Supreme Court,” he said. “It will do away with a lot of this stuff we are having to deal with. This case is a statewide case, which is what makes it interesting.”
One issue is the definition of an eight-liner. The game rooms opening in the Highland Lakes are mostly sweepstakes games run on computer software. The games are played on PCs with typed-in codes and are not coin-operated slot-machines.
“The sweepstakes games are a gray area for interpretation,” Snitkin said. “We don’t have an eight-liner in the county. In some of the more urban areas, they are mostly eight-liners.”
According to Burnet County Attorney Eddie Arredondo, the term eight-liner includes computers.
“Eight-liner is a common term for machines/devices/computers that award cash prizes after a bet,” Arredondo said, adding that the definition includes computers with gambling software.
Recently, a new game room opened in Marble Falls, Hill Country Tunes II, bringing the total by DailyTrib.com’s count to three in the city limits. In this version, customers who buy music downloads earn the right to play a sweepstakes game for free. The game operates like a slot machine, with images lining up vertically, horizontally, or diagonally.
The game is not played with coins. After buying the downloads, customers are given two different numbers: one to download the music from a website and one to type into the sweepstakes computer to play. The game stops when the points run out or players decide to redeem their points for money.
“This is not pay-to-play,” said Jon Deba, director of operations for Restaurant Streaming Solutions in Austin, which owns two game rooms in the Highland Lakes, one in Buchanan Dam and one in Kingsland. “The sweepstakes is something you receive as a bonus when you buy music downloads. You play for free.”
Like the McDonald’s restaurant Monopoly game, “you receive something tangible for your money.”