Barely Noticed by Cops, Non-Tribal Poker Rooms Thrive in Phoenix

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Lee aspired to own a franchise of poker-room locations ("Poker Wars," April 16, 2009). Because of his grand ambitions and loud criticism of state gambling laws, the ex-JP was targeted for prosecution and convicted by a Maricopa County jury this year on three felony counts.

Under gaming compacts with the state signed in 2002, only Native American communities are allowed to run gambling operations that include regulated poker games. State authorities say, in general, all poker establishments outside Indian casinos operate illegally.

Lee's activism and business ideas have been crushed by failures in the legal arena.

Yet Lee's punishment was no more than a slap on the wrist: one year of unsupervised probation. Two co-defendants earlier pleaded guilty to reduced charges. Still, Lee's club was closed and his probation terms bar him from opening another, under threat of a prison term. Another of Lee's former associates, Christine Korza, was sentenced this month to a year of probation and an $18,433 fine. Her club, Poker Nation, which Lee helped set up and which was mentioned prominently in "Poker Wars" and in the Arizona Republic, was shut down.

The 69-year-old former JP still is feisty despite his conviction. He's demanding that the federal government respond to his petition that aims to abolish the U.S. Bureau of Indian Affairs, take away the gambling monopoly from Indian reservations, and give poker lovers the right to run games and poker-related businesses wherever they want. He's written long screeds and the beginning of a book about his poker activism for his various websites.

Schnaubelt, with a wife and young twins to help support, is nearly as obsessed with Arizona's poker laws. He opened a card room in 2010 with a novel "co-op" angle to maintain the appearance of social gambling, which isn't banned under state law as long as only players benefit from games.

The business failed and closed last month. Lately, Schnaubelt has petitioned Phoenix and other cities to allow the regulation of card rooms, which he and Lee claim cities can do legally if they stand up to the state Department of Gaming. For a day job, Schnaubelt uses his computer skills for web marketing and other services. In his spare time, he threatens poker operators with citizen's arrests and informs on former competitors and partners.

Despite the wishes of Schnaubelt and Lee, the illegal status of non-tribal poker isn't going to change anytime soon. But, then, neither is the illicit poker-parlor industry itself.

A few high-profile busts of card rooms and their operators have occurred in the past three years, including Lee's, Korza's, and the Nuts Card Room's in Goodyear, raided last December. The enforcement actions occurred under Mark Brnovich, appointed director of the Arizona Gaming Department by Governor Jan Brewer in 2009.

Though Brnovich vowed he would wage war on off-reservation poker rooms in the state, authorities continue to have a lackadaisical attitude toward the establishments. The 16 poker clubs that the Gaming Department estimates do business in the Valley seem to exist in peace. Complaints about the rooms have decreased. They're not a law-enforcement priority — and, indeed, police face no shortage of more serious crimes to investigate.

A worker at one northwest Phoenix poker room says patrons enjoy the establishment because it's entertaining and closer than driving to Indian casinos.

"We get to know people, their style of playing — it's a lot of fun," she says.

She admits that she can only hope authorities continue to look the other way.

As long as no one makes a fuss, poker enthusiasts can get their fix, a few entrepreneurs can make money, and almost everyone's happy.

Schnaubelt and Lee, of course, plan to keep raising a ruckus.

Three years ago, Lee acted as though he held a royal flush, boasting far and wide that he was eager to take on the authorities in court.

"If they have to toss this old grandpa into the slammer before we get to make our point, fine with me," Lee blustered back then.

The state called his bluff.

A former Navy enlisted man, Lee used to be known as the "the rock 'n' roll judge" because he liked to play rock music in his chambers while serving as a JP for Maricopa County's Northeast Phoenix Justice Court. He took office in 1973, serving three four-year terms. Over that time, his libertarian views evolved, and he railed publicly against victimless crimes such as marijuana possession.

"I was surprised I got re-elected the first time and stunned the second time," he says.

Before life as a JP, he had obtained a marketing degree from Arizona State University. After his time in office, he founded several "network marketing" businesses, though he "never got filthy rich like some of my friends."

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.