Walk into some convenience stores across San Antonio and you may find walls lined with machines that look more at home in a casino.
The electronic gaming machines — known as eight-liners — have operated for years in a gray area of Texas gambling law, but on Friday, District 5 Councilwoman Teri Castillo filed a Council Consideration Request calling for San Antonio to ban their operation within city limits.
The CCR also calls for stronger inspections and enforcement and new ways for residents to report suspected illegal gambling. It will now be placed on the next available agenda of the Governance Committee before it can move forward for council consideration.
Castillo said the proposal grew out of conversations with constituents who raised concerns about the growing presence of the machines in their neighborhoods, the financial toll on people who use them and other criminal activity they believe is associated with locations where eight-liners are concentrated.
Among them was a constituent who sought help from Castillo’s office after repeatedly spending money intended for household bills on the machines.
“Because of that constituent services case, it prompted us to research regulations throughout the state of Texas for eight-liners, to better understand the landscape, the impact and where there’s opportunity for the removal and regulation of eight-liner machines,” Castillo said.
Castillo said it is unclear how many eight-liners are currently operating in San Antonio. Under the city’s current system, owners and operators are responsible for ensuring their machines are not being used as illegal gambling devices.
The city does issue permits for coin-operated amusement machines, but it does not track eight-liners separately from other machines such as jukeboxes and pool tables, Castillo said.
And while gambling is largely prohibited in Texas and San Antonio’s own development code already prohibits gambling establishments within city limits, eight-liners have long skirted those regulations under a provision of state law commonly known as the “fuzzy animal” exception.
The exception allows certain amusement games to award noncash merchandise, toys or novelties worth no more than $5 or 10 times the cost of a single play, whichever is less. The provision is commonly associated with arcade and carnival games that award small prizes, such as claw machines.
Eight-liner operators have long argued their machines can fall under the same exception when winnings are paid out in low-value merchandise or vouchers redeemable for prizes within the limits rather than cash.
Castillo acknowledged that not every eight-liner is necessarily operating illegally, but said constituents have reported machines operating outside the scope of the exemption.
“The trend that we’re hearing from constituents is that these machines are issuing cash that goes beyond the gray area of the ‘fuzzy animal’ [exemption],” she said.
The legal status of the machines under that exemption — and how far cities can go in regulating them — has also generated years of litigation.
One of the most consequential legal fights over eight-liners played out in Fort Worth, where the city adopted strict zoning and licensing restrictions on game rooms in 2014. Operators sued, arguing that their machines were protected under the state’s amusement-game exception and that state law prevented the city from imposing some of those restrictions.
The case spent nearly a decade moving through the courts, largely over how far cities could go in regulating machines that operators argued were protected by state law. In 2022, the Second Court of Appeals ruled that the eight-liners at issue were instead unconstitutional lotteries because players paid for a chance to win a prize. The Texas Supreme Court declined to review that decision and denied a final request for rehearing in 2024, leaving the appeals court ruling in place.
The decision removed a key legal obstacle to Fort Worth’s regulations and ultimately cleared the way for the city to ban eight-liners and game rooms altogether in 2024. Other Texas cities have since moved to ban or more heavily regulate the machines.
Castillo said her preference would be for San Antonio to follow that example and move forward with an outright ban, though she acknowledged the final policy could look different as it makes its way through the council process.
“Our goal and expectation is to ban eight-liner machines,” she said. “But I also understand that there is opportunity for more regulation, and the concerning part of this conversation is that there is not much regulation.”
Alternatives could include tighter zoning restrictions, additional permitting requirements or other rules governing how and where the machines can operate. Details of an outright ban, including how it would be enforced and what penalties operators could face, would still have to be worked out as the proposal moves through the Governance Committee.
Castillo acknowledged that a ban could also affect businesses that believe they are operating their machines within the state’s amusement-game exception. She said those concerns don’t outweigh what she has heard from residents about the machines’ financial impact and other activity surrounding locations where they are concentrated.
“There are serious constituent concerns regarding crime and illegal activity surrounding these eight-liner machines,” Castillo said. “And I have a responsibility to identify solutions for my constituents that are feeling the impact of these machines in their communities.”
This story first appeared in the San Antonio Report.