April 19, 2023 718 PM
PRESIDIO — At Tuesday night’s meeting, council members were slated to hear a second reading of the city’s new game room ordinance — but were left with more questions than answers after hearing a presentation from Robert Flores of the Texas Game Room Owners Association (TGROA), a nonprofit organization specializing in the issue.
Game rooms are a form of legal gambling in Texas — a state where gambling is illegal. Game rooms skirt the law by offering low or no cash prizes, commonly referred to as the “fuzzy animal exception” after the practice of offering small stuffed animals to winners. Its proponents say that game rooms simulate the fun of gambling without violating the law; detractors say they’re a magnet for violent crime, money laundering and other unsavory activity.
Presidians may be more familiar with game rooms elsewhere in the region — there are currently only two in town clustered along Highway 67. The establishments are popular in the Permian Basin, so much so that the City of Odessa recently voted to decline any game room permit renewal after December 2022 — essentially banning the businesses altogether.
Presidio city officials have been slow and deliberate in the drafting of their ordinance. City officials have stressed that they aren’t seeking to limit legal business — but aren’t currently collecting any revenue from game rooms other than utilities. “We’re poor and we need the money,” Councilmember Nancy Arevalo said at the last reading of the proposed ordinance.
Permit requirements would go into effect once the ordinance is officially passed — Presidio’s currently operating game rooms won’t be required to pay for permits retroactively.
The current draft of the ordinance assigns annual permitting fees to game room owners on a tiered scale based on the number of machines in their establishment.
Back in November — when the topic first came up at city council — City Administrator Pablo Rodriguez reached out to TGROA for advice after a tip from another small border town who had enlisted their services. He did not receive a response until the morning of Tuesday’s meeting but said he was still looking forward to their presentation.
TGROA drafts regulatory ordinances on the behalf of cities and offers game room operators legal counsel against the cities regulating them as well as advice for people “apprehensive” about investing in Texas game rooms. “We assist counties and cities with establishing sustainable state-of-the-art ordinances that have a positive community impact and our [sic] mutually beneficial [sic],” the organization’s website reads.
Flores began his presentation by explaining what the ideal “mutually beneficial” relationship between city and game room owner could look like. His group specializes in “charitable gaming” that encourages members to invest back in their communities.
He told council that he would encourage Presidio’s game rooms to form a “coalition” of operators who would pool some of their profits into a collective 501c3 nonprofit to serve the greater good. “They could put shoes on the feet of children who have never worn shoes before,” he said.
If Presidio were to opt in, TGROA would draft their ordinance and then shoulder the responsibility of compliance inspections. In a small town where code enforcement officers are hard to come by, Flores felt that would be a helpful service. “Cities get into trouble when you don’t have compliance or enforcement officers who understand how these machines work,” he said.
City of Presidio Finance Specialist Malynda Richardson was curious to know how — if all of TGROA’s services to the city were free — how the organization stayed afloat. “How do you pay yourself?”
Flores explained that each game room owner would have to pay $50 a machine quarterly for a compliance sticker. TGROA would be responsible for inspecting for noncompliance, and any penalties would go back to the city.
Flores also explained that as the game room industry grows, TGROA’s resources and clout could be beneficial to the city in navigating relationships between owners and the city. “We’re based out of Austin, we’re right across the street from the Capitol,” he said. “We have our own GPAC (general political action committee) to support state and local candidates who support our vision of charitable gaming.”
In private practice, Flores’ resume boasts eight years specializing in “game room law,” with $2.5 million recovered by game room operators over the course of “wrongful raids.” Presentation materials provided to the city council say that he is “currently suing three counties for wrongful raids.”
Flores clarified to Marfa Public Radio that the organization itself does not provide legal assistance to game room operators, though some of its individual members do. “Texas Game Room Owners Association does not represent game room owners in litigation,” he said.
Councilmembers ultimately took no action — but were grateful for the food for thought. “I definitely want more education on this from someone who specializes in it,” said Mayor Pro Tempore John Razo.
Councilmember Joe Andy Mendoza agreed. “The first question that comes up when someone mentions game rooms — is it legal?” he said. “What we want to do is to ensure that we have a system and a process so that [owners] can do what they do and entertain for profit.”
Flor Montoya, Presidio game room owner, was also grateful for Flores’ perspective — she has been extremely active in public discussion about the new regulations, which she feels are an effort to push her out of town. “It hurts me to think about leaving my job,” she said. “It’d be like if I built my house and then somebody else came in and lived in it — for me, it’s really hard.”