They operate mostly under the radar.
Usually in nondescript buildings or gas stations with their windows covered up, they are full of the whirling electronic games similar to those at Chuck E. Cheese’s. But these machines, instead of a ticket or token for a stuffed animal, offer store credit and other prizes.
Exactly how many of these game rooms exist, no one really knows, since they are largely unregulated.
But City Councilman Danny Scarth worries about how these gaming rooms are affecting neighborhoods — especially in light of the criminal activity found at some of them — so he wants to make the industry more transparent and easier to monitor.
“We need to be real clear that there are legal ways to operate game rooms,” Scarth said. “Unfortunately, people will use that to disguise the fact that they are operating an illegal gaming room, where they are giving away cash prizes and prizes that exceed the value of the law.”
The Fort Worth Police Department has documented 131 game rooms in the city, and those came to the attention of the department through residents’ complaints, officer discovery and reported criminal activity, according to a March report presented to the council.
Potential city-imposed regulation could include defining a game room, establishing a license and application process, and imposing an occupation tax per machine.
Requiring inspection and licensing fees, regulating for unobstructed windows, limiting the hours of operation and imposing age restrictions are among the other suggestions being considered.
But Scarth wants the city to talk about regulating game rooms through zoning ordinances, such as limiting the use of such businesses to industrial zoning districts and imposing distance restrictions from churches, schools, hospitals and other game room locations.
The Star-Telegram visited five gaming rooms in east Fort Worth, but none of the owners or patrons were available to speak or wanted to speak about the issue.
Though gambling is illegal in Texas, gaming machines are legal if they are used “only for bona fide amusement purposes” and award the player with only noncash prizes.
Chuck E. Cheese’s and other amusement arcades are examples of stores that award players with noncash prizes and are legal in Texas.
But regulation of gaming machines can be tricky to enforce. The report says that the “law is unclear as to when a gaming machine’s pay-outs are illegal” and that “the costs and logistics of investigating and prosecuting cases” makes the law difficult to enforce.
Scarth said he is concerned about crimes that can surround illegal game rooms, such as drug activity and prostitution.
“We are not able to track how much money is going in and out, so obviously there are taxes and things like that we are not able to enforce. And the second thing is whenever there is illegal activity going on, it tends to attract people who engage in illegal activity,” Scarth said.
The Police Department has used inspections by working with the state comptroller’s office, the state health department, Fort Worth code compliance and the Fire Department, and by going undercover to make a gambling case against the establishment.
Two cases generated by the vice section this year led to the confiscation of $13,231 in cash and the seizure of 64 motherboards from gaming machines.
Roger Woerner, president of the Eastern Hills Homeowners Association, said his neighborhood and others in the area have been fighting game rooms, but it’s tough because of the lack of city regulation.
“I can’t be against the owners; they are just trying to make a living and the city has allowed this to happen. They don’t have any strong laws for us to go by,” Woerner said. “We need the city government to do something here, but it is the state as well, they are the ones who look the other way.”
Lack of oversight
Markus Kypreos, a Fort Worth attorney who worked for the Texas District and County Attorneys Association from 2003 to 2006, said the state is not doing enough to regulate game rooms, so the city could help with additional regulation.
“You want to start out strict, probably the stricter the better, because this is going to be a test case for the city,” said Kypreos. More regulation, however, will require adding money to the budget for enforcement, Kypreos said.
Kypreos thinks the state should legalize gambling so that it can be more effectively regulated and taxed.
Because of the budget issue, Scarth said he would support adding regulations to the zoning ordinance, because that method would the least costly but would still allow city officials to know where game rooms are and would force them to operate openly.
Having city regulations could also help control crime, Kypreos said.
“I think with the regulation will come oversight and with oversight will come some sort of legitimacy. Now you are operating with the blessing of the city of Fort Worth and when you have regulations and you have specific rules to follow, then you are less likely to have this potential criminal element there,” Kypreos said.
Arlington cracked down on game rooms in 2007 with a zoning ordinance that allows businesses to offer games of skill, such as billiards, but not games of chance. Arlington officials used building and fire inspectors to close stores that violated the ordinance.
Scarth said he expects the issue to come back to the Fort Worth council in two to three months.