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The Royal Card House LLC, which operates a private poker club at 7616 Culebra Road in San Antonio, filed for bankruptcy after the Texas Comptroller of Public Accounts froze the business\u2019 bank account for failing to pay sales tax on memberships and \u201cseat fees.\u201d<\/p>\n
Fairfax Media via Getty Images<\/p>\n
San Antonio poker club Royal Card House<\/a> attributes its bankruptcy<\/a> to a state tax dispute that led to more than $400,000 in liabilities and a frozen bank account.<\/p>\n The business was told when it opened in 2018 that it did not have to collect sales tax on memberships and \u201cseat fees\u201d because it operated as a private social club, San Antonio attorney Dean Greer<\/a> said during a U.S. Bankruptcy Court hearing.<\/p>\n Article continues below this ad<\/p>\n \u201cThat information appears to be wrong,\u201d the company said in a court filing.<\/p>\n The Royal Card House LLC filed a small-business Chapter 11 bankruptcy on April 6. The filing allows the business to continue operating while restructuring debts under court supervision.<\/p>\n The business had \u201crocked along until 2022,\u201d Greer said, when an audit by the Texas Comptroller of Public Accounts<\/a> found the club should have been collecting sales tax, resulting in about $200,000 in liabilities.<\/p>\n San Antonio Express News Logo<\/p>\n Make us a Preferred Source on Google to see more of us when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n The Royal Card House worked out a payment arrangement while also appealing the comptroller\u2019s\u00a0determination.<\/p>\n Article continues below this ad<\/p>\n READ MORE: The house reshuffles: San Antonio\u2019s Royal Card House files for bankruptcy protection<\/a><\/p>\n A subsequent audit found an additional $250,000 in unpaid taxes, Greer told U.S. Bankruptcy Judge Aubrey Thomas<\/a> at Wednesday\u2019s hearing.<\/p>\n The company sought to set up a second payment plan, but the comptroller indicated it would have to pay $40,000 \u201cjust to initiate a discussion,\u201d the court filing said.\u00a0<\/p>\n So the Royal Card House borrowed $40,000 from a merchant cash advance lender to pay the comptroller\u2019s office, Greer said. Such loans typically carry high interest rates.\u00a0\u00a0<\/p>\n Article continues below this ad<\/p>\n The comptroller, the state\u2019s chief tax collector, ultimately declined to allow a second installment agreement, declaring that the more than $400,000 was due, he said.<\/p>\n The Royal Card House was unable to pay the amount, prompting the comptroller to freeze the business\u2019 bank account at Security Service Federal Credit Union<\/a>, according to the court filing.<\/p>\n That spurred the club to file for bankruptcy protection despite operating profitably, Greer said during the hearing. He didn\u2019t respond to emails seeking comment.<\/p>\n Eric Terry<\/a>, a San Antonio lawyer, has been appointed the bankruptcy trustee.<\/p>\n Article continues below this ad<\/p>\n \u201cThis is going to be a tough case because of the comptroller issue,\u201d Terry told the judge.<\/p>\n SA Inc.: An insider\u2019s guide to business in San Antonio<\/a><\/p>\n Kevin Lyons, a spokesman for the comptroller\u2019s office, referred questions about the bankruptcy to the Texas Attorney General\u2019s Office, which didn\u2019t respond to a query. The attorney general\u2019s office represents state agencies.<\/p>\n<\/p>\n