Texas hold 'em (also known as Texas holdem, hold 'em, and holdem) is one of the most popular variants of the card game of poker. Two cards, known as hole cards, are dealt face down to each player, and then five community cards are dealt face up in three stages. The Poker TDA is a voluntary poker industry association founded in 2001. The TDA mission is to increase global uniformity of poker tournament rules. TDA Rules supplement the conventional rules of this house. In case of conflict with a gaming agency, the agency rules apply.

There is a widespread misconception that any card exposed to a player in the blinds is a misdeal. The actual rule, though, is that if either of the first two cards off the deck is exposed, a misdeal is declared.

The exact misdeal scenario from the Poker Tournament Directors Association website is expressed this way:
“if either of the first 2 cards dealt off the deck or any other 2 downcards are exposed by dealer error”

This means that when the players in the blinds are receiving their second card, an exposed card does not trigger a misdeal.

It also means that, if there is no small blind and the first card dealt to the first-to-act player is exposed, a misdeal is declared. (This could be after a player is eliminated, or after players are moved to re-balance tables.)

So the key phrase to remember is this: “If one of the first two cards off the deck is exposed, it is a misdeal.”

Other Misdeals

From the Poker Tournament Director’s Association website, here are some other situations in which a misdeal should be declared:

two or more boxed cards on the initial deal (a boxed card is a card face-up in the deck)
cards dealt to a seat not entitled to a hand
a seat entitled to a hand is dealt out

Misdeals

Official Texas Holdem Poker Rules

The following circumstances cause a misdeal, provided attention is called to the error before two players have acted on their hands. (If two players have acted in turn, the deal must be played to conclusion, as explained in rule #2)

The first or second card of the hand has been dealt faceup or exposed through dealer error.
Two or more cards have been exposed by the dealer.
Two or more boxed cards (improperly faced cards) are found.
Two or more extra cards have been dealt in the starting hands of a game.
An incorrect number of cards has been dealt to a player, except the top card may be dealt if it goes to the player in proper sequence.
Any card has been dealt out of the proper sequence (except an exposed card may be replaced by the burncard without such action causing a misdeal).
The button was out of position.
The first card was dealt to the wrong position.
Cards have been dealt to an empty seat or a player not entitled to a hand.
A player has been dealt out who is entitled to a hand. This player must be present at the table or have posted a blind or ante.

Action is considered to occur in stud games when two players after the forced bet have acted on their hands. In button games, action is considered to occur when two players after the blinds have acted on their hands. Once action occurs, a misdeal can no longer be declared. The hand is played to conclusion and no money is returned to any player whose hand is fouled.

Poker Rules Texas Holdem Misdeal