I'm from Portland, Oregon and play in a cardroom there about once a week.
Oregon has some pretty restrictive gambling laws but in the 70's the state legislature passed a "social gaming law" that allowed for poker games as long as it was player dealt and the house didn't have a rake. Here's how they defined a social game in the law:
(21) "Social game" means:
(a) A game, other than a lottery, between players in a private home where no
house player, house bank or house odds exist and there is no house income
from the operation of the social game; and
(b) If authorized pursuant to ORS 167.121, a game, other than a lottery,
between players in a private business, private club or place of public
accommodation where no house player, house bank or house odds exist and
there is no house income from the operation of the social game.
They idea was that ELKs and VFW type clubs could hold poker tournaments to raise money for the club. But when Moneymaker won the main event and kicked off the poker boom a few bars in Portland started hosting tournaments to bring in customers and eventually that turned into just a dedicated poker rooms.
Here's how it works:
The biggest difference is that the house cannot take any money out of the pot. So everything the players pay in tournament entry fees goes back to the players. The house can only make money on the daily entry fee and selling food and drinks.
Every player has to pay a one time daily fee. It used to be $10 but recently it was raised to $15. (At least at Portland Meadows where I play.) Because the law stipulates that the game must be player dealt, each dealer has to play 1 hand when they start for the day. The spend $1 and get a 25 tourney chip and just go all in on the first hand. If they double up they go all in on the next hand, etc, until they lose. Then they just deal like normal and wear a badge that reads "Player". Apparently that's good enough to satisfy the State.
Most of the tournaments are low stakes. With rebuys and addons I've never spent more that $250 for a tournament. They are starting to have some larger buyins though of $1000.
There are also "cash" games called shootouts which are 1 hour tournaments where the face value of the chips is equal to the dollar amount. They play just like a cash game but again since they are legally tournaments it's good enough for the State. Most of these games are $1-$2 NL but occasionally there are $2-$5 NL and $5-$10 NL and Big O has gotten popular recently.
The dealers are volunteers and don't get paid by the house. All the money they earn is from player tips, which is apparently enough for most of them to make between $20-$40 an hour. Because the money is in tips, its up to the dealers whether to declare it as wages or pay taxes on it, the house doesn't record or report on any of it.
We do have legal Indian casinos in Oregon as well where poker works pretty much the same way it does everywhere else. There has been a lot of legal drama recently about whether the current system can last. Casino lobbyist groups aligned with the Indian casinos and Las Vegas casinos have been spending a lot of money recently in order to try to shut down the "player dealt" rooms but so far they have survived.
Here is good article from Willamette Week if you want to read more about how it all works.
Also if you're a watcher of YouTube this channel is pretty good and the guys are based in Portland and talk about it some times.