Shutting Down The Only Game In Town: The Future Of Eight-Liner Game Rooms In Texas

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At the height of the COVID-19 lockdown, the Supreme Court of Texas issued an opinion that may lead to the shutdown of “eight-liner game rooms” across Texas.

In the City of Fort Worth v. Rylie, 602 S.W.3d 459, 463 (Tex. 2020), the Court considered whether Chapter 2153 of the Texas Occupations Code, which provides comprehensive and uniform statewide regulation of skill or pleasure coin-operated machines, preempted the City of Fort Worth’s (the “City”) ordinances aimed at restricting the operation of “eight-liner” game rooms.

Eight-liners, which most people associate with truck stops, operate like a video slot machine: a patron pays to play the machine, which displays nine symbols arranged in three columns and three rows; the machine records the payment as credits; and the player bets credits by pushing a button to cause the three columns to spin. If the columns stop with three of the same symbols in one of eight possible lines—three vertical, three horizontal, and two diagonal—the player wins an amount of additional credits, redeemable for more “plays” or for a prize.

Although the Texas Constitution requires the legislature to maintain laws banning most gambling and gambling devices, under the so-called “furry-animal exclusion,” a machine that would otherwise constitute a “gambling device” is excluded from the definition if (1) it is used solely for bona fide amusement purposes, (2) it rewards only noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, and (3) the reward for a single play of the game or device is worth no more than the lesser of $5 or ten times the cost of the single play. Eight-liner games have been permitted to operate under this exception.

In an effort to curb the proliferation and use of these machines, the City passed two ordinances: a zoning ordinance restricting where the machines can operate; and a licensing ordinance, which requires game-room operators to obtain a license from the City and pay a licensing and inspection fee.

Dueling motions for summary judgment eventually brought the case to the Supreme Court, which determined that Chapter 2153 does not apply to unconstitutional or illegal machines. However, because the Court of Appeals had not considered the constitutionality of the machines and the furry-animal exception in its decision below, the Court declined to address the constitutionality of the machines and remanded to the Court of Appeals to rule on the constitutional question with the benefit of full briefing on the issue.

The parties are now briefing the Court of Appeals on the constitutional question. The odds for either party’s success are uncertain, so at this point, it’s anyone’s game.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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