Strip Club News

The Comptroller of the state of Texas has sent out letters to strip clubs in the past few days demanding that they continue to pay a $5 per patron tax while the state appeals a ruling late last month that invalidated the tax.

On March 28th, state district Judge Scott Jenkins ruled that the “pole tax” is an illegal tax on constitutionally protected expression and issued an injunction barring collection. An appeal by Texas Attorney General Greg Abbott automatically suspended the injunction, resulting in a demand for payment on April 21st.

Last week, a state district judge in Texas struck down the state’s $5 per patron strip club tax that took affect at the top of this year. The “pole tax”, as it was jokingly dubbed, required clubs to pay a $5 fee for every patron who entered any establishment that offers live adult entertainment.

Travis County Judge Scott Jenkins ruled the tax unconstitutional and prohibited the state from collecting or imposing the fee. In his ruling, Judge Jenkins wrote that the fee taxes “expression that, while politically unpopular, is nevertheless protected by the First Amendment.”

Texas state Attorney General Greg Abbott plans to appeal the ruling. The backers of the law also plan to rewrite it so they can find a way to circumvent the argument of constitutionality. Democrat State Representative Ellen Cohen of Houston (pictured at right), the original sponsor of the bill, said she will work to find a way to amend the law so it sticks the next time she tries to get it passed.

Strip clubs may be politically unpopular, but judging by the millions of customers who patronize them each year and the thousands of dancers who entertain at them, they appear to us to be very popular. The strip club tax was expected to raise $40 million per year. At $5 a head, that means that eight million visits were expected to strip clubs in Texas each year.

I recently ran across this shocking story of a 12-year-old girl who got a job at Diamonds Cabaret strip club in Dallas, TX, where she reportedly danced nude for over a week. According to the story, she was able to pass the audition without showing proper identification.

There is absolutely no excuse for this type of thing ever happening. Whoever allowed this preteen to dance nude should go to prison. Unfortunately, this one example casts a pall over the entire industry.

You can read the story here:

Underage Stripper Shocks Dallas

The US Supreme Court has refused to hear an appeal of a suit challenging the ordinances in Houston, TX, which could put most strip clubs out of business, effectively upholding the dangerously restrictive 1997 law.

Clubs have been battling the Houston ordinance for the past ten years. Houston law restricts strip clubs from operating within a completely arbitrary distance of 1,500 feet from residential neighborhoods, schools, parks, and day care centers, and prevents other strip clubs from operating within a certain distance of a similar business.

The goal of this ordinance is not to protect the populace from naked women writhing behind closed doors, unseen by passersby. The intent is to shut strip clubs down by making it impossible to find any land that satisfies the distance requirements, which is nearly impossible in most urban areas, and this is by design.

When the police in Houston begin enforcing the law, many clubs will be forced to close. The city, in typical fashion, argues that strip clubs create negative secondary effects on neighboring areas. But how does a woman removing her clothing cause crime, graffiti, and blight? Nobody knows.

More lawsuits are expected to be filed by club owners when enforcement action begins.

We here at Strip Club Central have never heard of anyone going on a crime rampage because they saw a woman without her clothes on. Have you?

“Look, there’s a booby! I better go shoot someone!” Sorry, but that king of thing does not happen.

The Houston, Texas, Vice Squad is out in full force cracking down on strip clubs after a recent federal court ruling gave the city the go-ahead to begin enforcing its decade-old sexually oriented business ordinance. Just this month, several arrests have been made and a few clubs have been cited for various ordinance violations.

Undercover Houston police posed as customers at Treasures on Westheimer Road for weeks gathering evidence on suspects who allegedly offered to sell sexual services, resulting in several arrests. Police also hit Solid Platinum and arrested a half dozen employees for various charges such as prostitution, drug possession, and outstanding warrants.

(Let’s be fair: often allegations of prostitution at strip clubs are nothing more than a dancer sitting on an undercover officer’s lap or inadvertently brushing her breast against his him while giving a dance. These arrests aren’t always made for offers of real sex acts such as oral sex, hand jobs, or intercourse, but often made for things nobody in their right mind would call prostitution.)

Houston law prohibits nudity or the display of the female areola in any establishment that is within 1,500 feet of any school, church, public park, or licensed daycare center or is within 1,000 feet of a similarly licensed establishment. The fact that these exposed breasts are behind closed doors and are unable to be seen by passersby is of no consequence. Just the fact that there are exposed nipples behind closed doors where only consenting adults can see them makes them illegal.

Some people think that Houston’s ordinance could result in the closing of most of the city’s strip clubs. Some gentlemen’s clubs that are currently topless may be forced to convert to bikini clubs because they are too close to schools or churches. This distance of 1,500 feet is completely arbitrary and is intended stamp out the strip clubs that are enjoyed by many thousands of free-thinking, consenting Houston adults every year. Why did Houston stop at 1,500 feet? Why not 15,000 feet?

Houston police promise more crackdowns and raids in the near future.

Houston, TX, Sexually Oriented Business Ordinances

New Mexico state Senator John Grubesic (DFL, pictured on the right) has proposed a $5 tax on strip club patrons similar to one currently on the books in Texas.

The Texas “Pole Tax” went into effect at the top of 2008. It is currently being challenged in the courts. Late last month, a Texas judge upheld the tax. There is a hearing scheduled for Jan. 22nd on club owners’ request that a judge bar collection of the fee by the state. The supposed rationale for this Texas strip club tax is that gentlemen’s clubs contribute to the commission of sex crimes (patently false), so the money raised will be partly used to help victims of sexual assault.

“It’s $5. That’s nothing. I think beer in these places runs around five bucks,” Grubesic was quoted as saying.

But what is to stop these freedom-robbing politicians from raising the tax even higher? If their ultimate goal is to shut down strip clubs and rob free-thinking, consenting adults from enjoying this type of entertainment, what is to stop them from raising the tax to $20 per patron? Or $50? There is absolutely nothing to stop them—if the courts do not. Just as your other taxes go up and up every year, you can expect this one to go up as well.

This is a clear and unmistakable infringement on the Constitutional rights of citizens. It is a tax on expression, nothing else. Millions of Americans go to strip clubs every year. The vast majority of strip club patrons are not perpetrators of sex crimes—or any other type of crime. They should not be singled out for special taxation just because they enjoy a particular form of expression targeted by grandstanding politicians.

If this attack on free speech is upheld by idiot judges, what will be allowed to be attacked next? Perhaps a tax on patrons of rap concerts? Or maybe a tax on romance novels? How about a tax on gay cross-dressing performances? Gays have the highest rate of HIV infection. How about the state tax their expression then use part of the money raised to treat HIV infections, with the rest going to the general fund to be squandered? We can apply this twisted logic to all sorts of different scenarios with the same end result: it is a tax on speech that is supposed to be protected by the United States Constitution.

NM Senator John Grubesic’s homepage

Lawyers representing a group of Texas strip clubs have gone to court to ask a judge to block a state mandated $5 cover charge tax at strip clubs scheduled to go into effect at the start of the new year.

State legislators have targeted strip clubs to help pay for more welfare benefits. The tax, or surcharge as they call it, is expected to raise $40 million each year. (Doing simple math indicates that eight million patrons are expected to visit strip clubs in Texas each year—quite a lot.) About half of the money expected to be raised is supposed to be directed toward helping victims of sexual assault while the other half is planned to be used on health assistance for poor Texas residents without health insurance.

Clubs are arguing that the tax violates free speech provisions by unconstitutionally targeting a protected form of expression. This $5 per patron tax isn’t required by law to be passed on to customers. However, this tax applies to no other business establishments or nightclubs other than those that feature nude or topless dancing.

One must wonder why the burden to pay for health insurance for low-income people and sexual assault services must fall on the backs of law-abiding strip club patrons.

A restraining order was recently issued against Booby Rock (Boobie Rock?), a new gentlemen’s club scheduled to open in mid-November in San Antonio, TX, at the request of a nearby business that may delay the planned opening.

EOS Acquisitions filed a lawsuit against Booby Rock claiming that deed restrictions prohibit any business that offers “entertainment appealing to prurient interests” from operating at that location. A hearing is scheduled for October 30th to determine whether a temporary injunction should be issued.

Meanwhile, city Councilwoman Diane Cibrian is continuing her irrational fight against the club by protesting the club’s liquor license application with the Texas Alcoholic Beverage Commission. The Commission has received a petition with a whopping 560 signatures from area citizens and business owners opposed to the new club.

The owner of Booby Rock, Glenn Williams, also owns Sugars, another topless bar in San Antonio.

Rick’s Cabaret International, a publicly traded corporation specializing in owning and operating adult entertainment establishments throughout the United States (NASDAQ symbol: RICK), has announced that they have signed a letter of intent to purchase a strip club located somewhere in the Southeast.

The acquisition target’s name and location have not been revealed. Rick’s is keeping it confidential for now. Per the terms of the letter of intent, the unnamed club will be acquired for $25 million and is expected to generate annual revenues of $18 million and earnings before interest, tax, depreciation and amortization (EBITDA) of $8 million per year. The deal is contingent on due diligence, financing, and the transfer of pertinent licenses.

In the 12-month period ending June 30th, 2007, Rick’s had revenues of $29 million and EBITDA of $4.4 million. This is a sizeable acquisition that will nearly double Rick’s annual revenue and EBITDA.

Also this week Rick’s announced that it will be buying a 51% ownership stake in The End Zone, Inc., which owns and operates Crazy Horse Too in Philadelphia, PA. After the deal closes the club will be renamed under the Rick’s Cabaret brand. Rick’s plans to add an upscale steakhouse to the club.

Official Press Release

Scores Being Sued

A former bartender at Scores in New York City, Siri Diaz, is suing the club claiming employees were forced to work for substandard wages and cheated out of tips and overtime pay. The suit was extended to class status representing 100 current or former Scores employees at several club locations. The claim regarding the tips stems from the club’s in-house currency called Diamond Dollars which are redeemed for 10% less than face value. Under the law, if an employee is paid less than minimum wage it is illegal for the employer to keep any portion of the tips. The claimants are seeking an unspecified amount in back pay and overtime.

Las Vegas, Nevada

The Olympic Garden in Las Vegas could qualify for a taxpayer subsidy for a new neon sign outside the club. The topless club is asking for $50,000 in taxpayer money to help pay for the new $130,000 sign. The city has a program whereby businesses in certain redevelopment areas can qualify for money to spruce up their properties.

Fort Worth, Texas

There may be some new strip clubs coming to the Ft. Worth, TX area. The city council approved plans for a large gentleman’s club and four other sexually oriented businesses recently. A small contingent of irrational residents is opposed as they fear that strip clubs will bring crime to the area. One all-nude BYOB club is proposed for an area near Interstate 820 and Trinity Blvd.

San Antonio, Texas

City Councilwoman Diane Cibrian joined with a group of concerned citizens to protest the opening of a new strip club to be called Booby Rock scheduled to open in mid-November near Huebner Rd. and Interstate 10. The name of the club reportedly is derived from the name of an island in the Virgin Islands. Regardless, it’s a nice way to work a part of the female anatomy into the name.

The Boom Boom Cabaret in Lubbock, TX, emerged victorious in a settlement with Lubbock County earlier this week that will give the ownership of the strip club $50,000 of taxpayers’ money.

The strip club and the county were in a dispute over the club’s sexually oriented business permit application which contained mistakes back in January, according to the county. The county then stripped the gentlemen’s club of its permit to offer nude dancing. Boom Boom Cabaret continued to operate with clothed dancers until a judge issued an injunction in June that allowed the club to offer nude dancing again.

The Court ruled that the club should have been allowed more time to correct the errors on its permit application. Lubbock County commissioners voted to settle with the club to cover lost revenue and attorney fees.

Twelve dancers and two customers were arrested yesterday at the Houston Dolls Cabaret in Houston, TX, for violations of local sexually oriented business regulations, allegations of prostitution, and drug sales.

Harris County sheriff’s deputies obtained arrest warrants for a total of 25 female employees of the club following a three-week undercover investigation. One news report indicates that two of the female workers arrested inside the club were underage.

More arrests are likely to follow.

VCG Holding Corp. has purchased Jaguars Gold Club near Fort Worth, Texas. The company purchased 100% of the stock of Golden Productions JGC Fort Worth LLC for $3.7 million in cash.

Earlier this month, VCG acquired Platinum Plus gentlemen’s club in Portland, Maine for $4.5 million; they also paid $1 million in earnest money to acquire an affiliated club in Miami, FL, contingent on the transfer or permits and licenses. VCG plans to rename the Platinum Plus club under the PT’s brand.

VCG Holding, headquartered in Lakewood, CO, owns and operates several upscale adult entertainment establishments across the country. VCG has been active in acquiring gentlemen’s clubs and may purchase more in the near future. VCG is a publicly traded company with ticker symbol PTT.

Rick’s Cabaret International, Inc., announced that it has added another gentleman’s club to its portfolio.

The company acquired Centerfolds Gentleman’s Club in San Antonio, Texas, for a total of $2.9 million. Centerfold’s is a topless club that serves alcohol.

Rick’s already owns two adult nightclubs in the San Antonio market, XTC Cabaret and Club Onyx.

Rick’s, based in Houston, Texas, is a publically traded company (NASDAQ symbol: RICK) with 13 gentlemen’s clubs across the United States. As of this writing Rick’s has a market capitalization of aproximately $33 million dollars. In fiscal year 2005 Rick’s lost $215 thousand on gross revenue of $14.8 million.