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Jim Wallingsford drove his white Chevy truck one morning last month down North Walnut Street in Lacy Lakeview, dodging potholes on his way to inspect a repair project on a sewer lift station.

As public works director for this Waco suburb of 8,000 residents, Wallingsford is always triaging the city’s needs: Cracked and cratered streets, aging pipes and pump stations and the old water tower, which needs a $1 million facelift.

“I want to be a good steward of the City of Lacy Lakeview with the money I’m given to spend,” he said. “So I give everything a weighted scale and I base it off of the likelihood and consequences of failure.”

Lacy Lakeview, population 8,000, is typical of many small Texas towns that lack the resources to keep up with streets and pipes that are wearing out. Most of that infrastructure in Lacy Lakeview was installed more than 50 years ago. And the longer maintenance is deferred, the faster it deteriorates.

Mayor Chuck Wilson has pointed to the city’s maintenance backlog to justify the pursuit of a data center. He wants to partner with Infrakey to develop and annex a proposed $10 billion data center north of town near Ross.

That development represents tax base that would increase Lacy Lakeview’s tax base enough to increase city tax revenues from $6.5 million to $50 million a year. But the project has drawn a backlash from neighbors of the Infrakey site, as well as from some Lacy Lakeview residents, who just elected data center opponent Amy Gage to the City Council.

As Wallingsford sees it, the city needs new development, or the existing taxpayer and utility ratepayers will be on the hook for improvements.

“Everything that we purchase is going up, literally,” he said. “The only other solution is that we have to have a rate increase just to be able to keep up.”

Wallingsford stopped his truck at the Meyers water pump station, which was under repair after it was observed to be leaking.

“The consequence of them failing is pretty high but their issues aren’t critical and they continue to operate,” he said. “The city only needs one pump to operate and we have three, so there’s a backup.

“At the end of the day when something fails, we go back and work off of the plan.”

Wallingsford, a former city of Waco staffer, said utility infrastructure like this typically has a 50-year lifespan, and the ideal practice in public works is to set aside 2% of the system’s cost each year for replacement.

“I haven’t worked for a city that’s ever done that,” he said.

Even more visible is the wear and tear on Lacy Lakeview’s 30 miles of city streets. Asked which ones need to be repaved, he didn’t hesitate.

“All of them,” he said. “They all need to be done. I’d say we have about 15 critical streets” that need to be repaved.

The city is now repairing and reconstructing streets using a $9.5 million bond issue that voters approved in 2024. To save money, the city is using its own workers and equipment to grind up and recycle pavement, which is then compacted and resealed.

Among the most critical projects is Walnut Street, which is being reconstructed along with replacement of water, sewer, fiber optic and gas utilities under the street. That project is to be completed in February 2027.

This article first appeared on The Waco Bridge.

HARRIS COUNTY, TX – On a February afternoon, 2 Investigates showed up to a North Harris County strip mall.

Minutes earlier, deputies raided what law enforcement described as an illegal gaming room operating in plain sight. The operation to shut down the room ended quickly, as one person was arrested and more than 80 gaming machines were seized. The scene was littered with evidence, including cash and a firearm.

However, what 2 Investigates uncovered was a bigger component after the raid: this was not a new location.

“We’ve been here a couple of times,” said Lt. Jeffrey Lee with Harris County Constable Precinct 4, referring to the same location being raided in September of last year.

Law enforcement officials, from investigators to prosecutor, we spoke with over the course of our investigation say these operations have become increasingly common across the Houston area and Texas.

“It’s extremely common. We run these operations numerous times,” Lee said.

Why authorities say these operations matter

Every member of law enforcement, from the courts to the streets, we spoke with during our months-long investigation made it clear that illegal gaming rooms create more than just gambling concerns.

“At its base, these gaming operations prey on the vulnerable members of our community-those on a fixed income, older people-promising these huge payouts that never materialize,” said Lee, who went on to add, “At its wider angle, these are funding operations for much more serious criminal enterprises like human trafficking, drug trafficking, and things like that.”

Criminal defense attorney Rick Detoto, who has experience with these cases, said the locations for these rooms can also become magnets for violent crime

“They are targets.” Detoto went on to add, “There is a lot of cash there, their security is minimal at best, and they go in there and they rob them and people get shot and there are capital murders and aggravated robberies and all kinds of stuff that come out of those game rooms.”

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In February, an illegal game room in Southwest Houston was the site of the shooting death of a security guard during a robbery.

The “8-Liner” loophole

At the center of the gaming controversy are machines commonly known as “8-liners.” These are not unfamiliar machines for Texans, as many can be found inside gas stations, convenience stores, or small strip mall businesses. Under Texas law, certain gaming devices may legally operate if they are considered entertainment-only machines and do not provide illegal cash payouts. In some cases, stores may offer small prizes or store credits instead.

However, critics and elected leaders have asked for clarification from the state, saying some operators exploit a gray area in the law centered around whether a machine is considered a “game of skill” or a “game of chance.”

What is the difference between a game of skill and a game of chance?

As Detoto explained, “A game of chance [is] you press a button and there is a computer program that randomly picks the numbers or the fruit or whatever and you win, compared to a game of skill where it’s based on memory or perception or your timing, where you are kind of playing a game and you have to remember things. That’s the loophole that these people are exploiting, and it’s allowing some of these games to be legally put into these stores.”

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Investigators say some operators allegedly go beyond the legal boundaries by offering cash payouts either privately or openly. 2 Investigates found one machine advertising as much in Fort Bend County.

Detoto said the machines are becoming more common throughout everyday neighborhoods, including his. “I’ve started to notice them every time I get gas,” he said. “I go in to get a Coke or something to drink, water-there are three 8-liners there that weren’t there before.”

Raids, auctions, and recycled machines

Authorities say shutting down illegal game rooms can become expensive for taxpayers due to investigations, raids, manpower, and evidence storage. However, another issue emerged during our investigation: many confiscated machines are not destroyed after they are seized. Instead, there are law enforcement jurisdictions that auction them off.

Investigators confirmed to us that some of those machines seized by other agencies eventually make their way back into circulation because they’ve been made available again, “We do see reintroduction of machines and the equipment that come from these game rooms back in again,” Lee said.

Lee’s constable office does not engage in the practice of auctioning off machines.

How did Detoto describe the system? “It’s a revolving door of law enforcement seizing the machines, waiting until a case gets resolved, selling them, making a profit for the asset funds, and doing it over again.”

Multiple sources interviewed for this story questioned whether current enforcement efforts are actually deterring illegal operations.

Detoto said criminal prosecutions tied to 8-liners are relatively rare.

“I’ve never seen, in my experience, anyone go to jail for these 8-liners.” The Houston-based defense attorney added, “The prosecutors don’t have the time to deal with these cases. They are not the most important case on their docket.”

Lee agreed that stronger oversight and penalties may be needed: “There is room for improvement with regards to the oversight, the laws, and the stuff that concerns these gaming rooms-that we could actually enact some stiffer penalties to discourage this behavior.”

When 2 Investigates asked whether Texas lawmakers need to do more, Lee responded: “We would like to see some improvements, yes.”

Calls for legislative change

Texas State Senator Bob Hall, who represents Senate District 2, said the current system leaves too much room for abuse. “We need to do more to make sure that we can shut down and stop the operation of the illegal game rooms,” said Hall, who added, “There is no question about that.”

During an interview at his Dallas-area office, Hall acknowledged that changing the law could prove to be difficult. “It will be a challenge because it will depend on our local law enforcement doing its job the way it should be done,” Hall said.

Bottom line for Hall regarding a problem hiding in plain sight? “There is no reason for a gambling machine to exist in Texas.”