Laws in AZ are pretty straight forward unless a location is taking a rake or providing or gaining direct benefits from the poker they are legal.... With that said here is the story.

As reported by Fox 10 in Phoenix last night:

Several people were busted during a poker night at a bar in the Valley. Officials with the Arizona Department of Gaming says the raid was part of a seven month long investigation into a suspected illegal gambling operation.
On Wednesday night, Phoenix Police officers were joined by the Arizona Department of Liquor and the Attorney General's Office, as they descended on Toso's bar at Union Hills and 24th Avenue. They interrupted some 30 people playing poker, and seized their chips. Gaming officials say gambling can bring crime to a neighborhood, and it is against the law in Arizona. The people behind the poker game, however, feel they did nothing wrong."Are you participating in illegal gambling?" asked FOX 10's Steve Krafft."Not at all," said John Schnaubelt with Real Poker LLC. "Is poker even gambling, first of all? It is a game of skill and it is a mind sport."
Schnaubelt believes the raid is all about protecting tribal interests. "The tribes have claims on exclusivity over all gambling," said Schnaubelt. "They do poker. Not chess or bowling or billiards, but poker. There is an interest on Gaming Department's part on protecting that exclusivity they have over poker." Schnaubelt believes he can make a legal argument that what he's doing is OK. Arizona Department of Gaming officials were not available for interviews, but the department notes gambling off tribal lands can lead to felony charges."The state has an opinion. I have an opinion. Other people have an opinion. It is up to a judge to decide what is right," said Schnaubelt.
The owner of Toso's Bar said all he did was provide drinks and food for the players. He said his liquor license was confiscated briefly, but he got it back since.

The bar owner had no reason to have his liquor license taken which is why he got it back rapidly.. The bar wasn't taking a cut or anything.. They did provide a location but wasn't actively involved.. Theres a lot of information missing here but the point is correct.. It seems once again the Indians are utilizing political pressure to go after poker games off the reservations that aren't completely private..

The question is how things were being run here is what the ARIZONA Revised Statutes read:
7. "Social gambling" means gambling that is not conducted as a business and that involves players who compete on equal terms with each other in a gamble if all of the following apply:
(a) No player receives, or becomes entitled to receive, any benefit, directly or indirectly, other than the player's winnings from the gamble.
(b) No other person receives or becomes entitled to receive any benefit, directly or indirectly, from the gambling activity, including benefits of proprietorship, management or unequal advantage or odds in a series of gambles.
(c) Until June 1, 2003, none of the players is below the age of majority. Beginning on June 1, 2003, none of the players is under twenty-one years of age.
(d) Players "compete on equal terms with each other in a gamble" when no player enjoys an advantage over any other player in the gamble under the conditions or rules of the game or contest.

Any money of the players is owed immediately back to the players despite what AZ Gaming claims.. None of the players were in violation of the social gaming section of the law.. The 64,000 question will be what was the involvement of this LLC in all this.. because oddly enough there is the issue in Section B that becomes a potential problem for the LLC (the guy running the poker games)

This isn't the first time this has happened.. There have been raids normally of 'card rooms' over the years likely at the impetus of the Salt River and Gila River Tribes who run most of the gaming in the Valley..