Michigan Regulators Consider Eliminating Charity Poker Rooms

Posted on October 23rd, 2013 by Todd Wilkins

Michigan Regulators Consider Eliminating Charity Poker RoomsThe Michigan Gaming Control Board has proposed rule changes that would shut down all permanent charity poker rooms within the state’s borders.

Michigan’s 40 permanent charity poker rooms are in danger of being eliminated. The rooms, which have raised over $100 million for various causes over the past decade, have come under fire from Michigan Gaming Control Board officials, who cite criminal activities and gaming violations as the determining factors behind the proposed rule changes.

Since 2004, Michigan’s charity poker industry has helped dozens of the state’s schools, churches and non-profit organizations purchase equipment, pay for scholarships and undergo renovations. Many of these facilities rely on donations to stay in business. As expected, almost everyone involved in the charity poker industry, including the charities themselves, are vehemently opposed to the pending changes, believing that it will not only result in less funds for nonprofit organizations, but will also cause hundreds of poker room employees to lose their jobs.

Jessica Stank, the fundraising chair of Lakewood Youth Football Board relies on donations from charitable poker rooms, stating I don’t know how we’re going to find another opportunity that’s going to match the money we’re able to bring in from charity poker. The team raised over $3,000 from charity poker rooms donations in October alone; money that was used to purchase essential equipment for the team.

Control Executive Director Rick Kalm expressed that the proposed rule changes will allow the board to take control over illicit activities that currently plague the goodwill industry, including fraud, illegal gambling and substance violations. Over the course of the past three years, nearly 150 crimes have been committed in charitable poker room settings.

However, there are some who believe Kalm is seeking to appease Michigan’s land-based casino operators competing for the same player pool. Kalm states that this is not the case, as poker is not the main source of casino revenue. Anyone who has played poker at a live casino would likely confirm Kalm’s claim.

The proposed rule changes would not eliminate charity poker from existence, but it would negate the necessity of poker rooms. Kalm had made previous attempts to curtail the crime rate at charity poker rooms. Over the summer he implemented rules that would limit the rooms to hosting three charities and selling a maximum of $45k worth of chips per day. He also attempted to force clubs to close at midnight, but a judge ruled against this. Currently, the rooms are allowed to stay open until two in the morning.

The newest regulations would limit rooms to hosting events 30 days out of the year, force them to close at midnight and require that at least five members of the receiving charity organization be on site and provide proof that they’ve raised at least $2,000 from charitable events in the past 12 months.

Currently, there are no regulations governing Michigan’s poker rooms, making it difficult to ensure that the proper security measures are in place. Because of this, large poker rooms are non-existent in Michigan.

The federal government is considering regulating charity poker rooms on a national level, but House Bill 4960 has yet to be passed. Senator Farrington, who penned the bill, believes that charity rooms should be regulated, and believes that shutting them down entirely is a grievous mistake, as they generate a reliable revenue stream for nonprofit organizations in Michigan.

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