The social-club poker scene in Houston has taken a turn for the strange after the unannounced shuttering of the Johnny Chan's 88 Social poker club on the city's west side. Three weeks ago, Poker.org reported on the unexpected cancellation of the room's planned Winter Classic. Now, the room itself has been closed, at least temporarily, leaving employees a reputed three weeks in arrears on pay and hundreds of thousands of the rooms chips being held by various high-rolling players, waiting to be cashed out.
Who is to be blame for what remains a heated but somewhat uncertain topic throughout the Houston poker scene. The situation involves an ongoing feud of sorts between 88 Social and the Legends Poker Room that opened directly across the street from 88 Social following an ownership dispute between Chan and some of his business partners, in a matter that briefly involved a lawsuit, filed by Chan.
Further muddying the waters is a 14-minute video posted on YouTube by an account formerly associated with another Houston poker club, Prime Social. The video was posted by Dolcefino Consulting and alleges widespread illicit behavior throughout the Houston social-poker scene, including the Legends Poker Club that is co-owned by David La. La, a former co-owner of 88 Social, was sued by Chan in 2019.
David La had previous settlement with California Gambling Commission
The Dolcefino video reports that La's involvement in the Houston poker scene may be due solely to poker's unregulated nature in Houston and throughout Texas. La was previously licensed through the California Gambling Commission at the Normandie Casino, where he served as a key employee. That ended in 2013 when the California investigation found evidence of wrongdoing.
La played a central role in the money-laundering scandal at Normandie that eventually forced the casino's owning family to be ordered to sell the casino. (Normandie was purchased by Larry Flynt in 2016 and was renamed Larry Flynt's Lucky Lady Casino.) According to the CGC settlement with La, he introduced a high-stakes baccarat player known as "Sunny" to the Normandie in 2013 to play at baccarat with bets often in excess of $10,000 per hand. "Sunny," who was never publicly identified, reportedly won roughly $2.5 million at Normandie, none of which was reported to the state as required by California gambling law.
These and other infractions led California regulators to suspend La's license in a settlement not signed until 2019. The first part of the Dolcefino Consulting video shows La dodging questions about his California past after being questioned by the interviewer.
The video than goes on to explore other widespread abuses allegedly occurring at other social-poker clubs in Houston. The allegations, supported by hidden-camera footage, include widespread (and illegal) rake, illegal jackpot drops, and even the illegal serving of alcohol.
While the Dolcefino vide has a "Gotcha!" feel, it's unclear whether the video was funded by other parties. The video does feature a brief interview with Prime Social tournament director Justin Hammer, and the video cites Prime Social as a club operating the proper way under Houston (Harris County) and Texas state law. However, widespread debate by players on a prominent Facebook group dedicated to Houston's social-poker scene offers a consensus that the video may have been funded by some other party.
Chan had bitter split with La, others over 88 Social ownership
The Dolcefino video also notes in its later stages that Chan and La are now bitter foes. It even includes a brief interview with Chan regarding La's various misdeeds. The video also touches on but does not detail the lawsuit Chan filed in 2019 against La, Ho Jun "June" Sin, and the company La and Sin formed, JJJ Vision, LLC.
In the lawsuit, which Poker.org has obtained, Chan details how he met with La and Sin at the Bellagio in September 2019 to discuss buying into the club, which was then known as 52 Social. Chan asserted in the lawsuit that he was promised a 20% share in exchange for $40,000 and use of his name and likeness. However, Chan then claimed that "June" Sin refused to sign any documents that acknowledged his 20% ownership stake, despite La acknowledging Chan's ownership stake.
Chan's lawsuit alleged several torts including fraud, breach of contract, and the misappropriation of Chan's likeness. Chan also alleged that Sin tried to buy him out of the 88 Social operation at one point for $100,000.
The larger bomb in the lawsuit, however, involved Chan's allegations against Sin. Chan described Sin's failure to acknowledge Chan's part ownership as "the result of Mr. Sin's greed and his desire to continue looting the company for his benefit and to the detriment of all shareholders." Chan went on to describe an operational scheme wherein La and Sin were "distributing hundreds of thousands of dollars monthly to numerous owners and employees characterized as 'house players,' and these players use this free money to play in poker games, either keeping the winnings or kicking them back to one or more of the Defendants." Chan also alleged that Sin purchased a car for himself with company funds.
Lawsuit's resolution may have contributed to 88 Social's current financial woes
Whether or not Chan's allegations were true never went to court. The two sides reached a settlement which was not at all amicable, according to veteran Houston-area players. La then went on to open the Legends club directly across the street from 88 Social and offered numerous special deals to attract business away from Chan's 88 Social Club. (Whether Sin also owns part of Legends remains unclarified.)
That increased competitive pressure may have cut into 88 Social's daily traffic, though several Houston poker regulars have alleged mismanagement and graft by 88 Social's management as the primary factors for its current shuttered state. The room's recent cap on chip cashouts by players of $2,000 per day has also lowered players' incentive to play at the room.
The exact operational shortage faced by 88 Social remains publicly unknown, though estimates given to this reporter have ranged from $850,000 to $1.2 million. Three high-stakes players are reputed to be holding uncashed chips with a cumulative value of more than $500,000, and others surely exist as well. The payroll freeze adds significantly more to that amount. According to sources, Chan himself has contacted several people about investing into the club as a way of reopening and righting the operation. Whether he is successful in that venture won't be known for some time, and 88 Social continues to face an uncertain future.
Featured image source: Facebook / Johnny Chan's 88 Social
