Michigan Poker Rooms Under Fire
December 18th, 2013 at 12:42:42 PM
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The Michigan Gaming Control Board has proposed several changes to the regulations surrounding a licensed millionaire party. These events are sponsored by non-profit and charitable organizations as a means of raising money for the benefit of others. The Board’s stated reason for making these changes is to control the abuses and violations that are frequently occurring at permanent poker rooms throughout the State. More specifically: 15 permanent poker rooms have been closed in recent years for material violations of the Traxler-McCauley-Law-Bowman Bingo Act, with illegal gambling and fraudulent activities related to licensed charities as well as possible violations of criminal law.
Poker rooms share in the revenue from the fundraising event in exchange for supplying the non-profit or charitable organization with virtually everything that is required to conduct a Millionaire Party including: the building, gaming tables and equipment and, in some instances, dealers. The charity merely provides the license, have a few of its members physically on site during the event, as well as handling all money.
The new regulations will clearly make it more difficult for many permanent poker rooms to exist as a business by limiting the number of events that it can host per-year and, limiting the number of organizations that it may host on a given day from several to one. In addition, the Board has proposed to lift the moratorium on new licenses for poker rooms, thereby dismantling the virtual monopoly the current 40 or so permanent poker rooms currently enjoy.
While I believe that these regulations are, for the most part, prudent and necessary, they will have a significant impact upon organizations that conduct millionaire parties under a totally different business model. I speak of the “traditional” millionaire party where individuals play against the house versus poker, where individuals play against each other. There is a profound difference between these two models as the former is a “risk” scenario for all parties versus the latter (poker) where the house merely takes a rake per-hand (no risk). Regrettably, the regulation treats them interchangeably.
I would be interested in anybody's opinion on possible solutions regarding these matters. I have my own solutions that I will bring to the Michigan Legislature but would be like to hear yours as well.
Poker rooms share in the revenue from the fundraising event in exchange for supplying the non-profit or charitable organization with virtually everything that is required to conduct a Millionaire Party including: the building, gaming tables and equipment and, in some instances, dealers. The charity merely provides the license, have a few of its members physically on site during the event, as well as handling all money.
The new regulations will clearly make it more difficult for many permanent poker rooms to exist as a business by limiting the number of events that it can host per-year and, limiting the number of organizations that it may host on a given day from several to one. In addition, the Board has proposed to lift the moratorium on new licenses for poker rooms, thereby dismantling the virtual monopoly the current 40 or so permanent poker rooms currently enjoy.
While I believe that these regulations are, for the most part, prudent and necessary, they will have a significant impact upon organizations that conduct millionaire parties under a totally different business model. I speak of the “traditional” millionaire party where individuals play against the house versus poker, where individuals play against each other. There is a profound difference between these two models as the former is a “risk” scenario for all parties versus the latter (poker) where the house merely takes a rake per-hand (no risk). Regrettably, the regulation treats them interchangeably.
I would be interested in anybody's opinion on possible solutions regarding these matters. I have my own solutions that I will bring to the Michigan Legislature but would be like to hear yours as well.
December 18th, 2013 at 2:09:33 PM
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I have played at a few poker rooms (my wife is from Michigan). while I had some limited success, there were a lot of things that would not have occurred in a casino. first off, everyone there seemed to be regulars and they all talked about hands while cards are still live (not what they had, but still speculating). there was even some trash talking after bad beats. the cash table chips were cheap and easy to counterfeit. but the biggest offense I saw... when you placed in a tournament, you just walked up to the cage and said "I got 3rd place." and they hand you the money. no verification needed. so, with a packed house (100+ people) you could walk up and take the prize money and get away before any one realized.
December 18th, 2013 at 4:17:14 PM
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The poker rooms are legal however, there are some rules that must be adhered to. And, since the state only has a relationship with the non-profit or charitable organization, the regulations are mostly directed towards them.
For example, the regulations state that the organization must have a certain number of their officers physically on site during their event. Plus, only the licensee can touch the money. And, no money can swing from one organization's game to the other's (there are sometimes as many as 6 organizations putting on events in the same poker room per-night.)
As it turns out, some organizations have so many events that none of their people are present on certain nights, as required by law. They simple turn the game entirely over to the poker room. The charity calls up the next day and asked the poker rooms, "Well, how did we do last night?"
Some poker rooms have actually put the muscle on the charities (sic) by, in addition to the split, "request" that some of the split goes to one of the poker room's designated charities. The licensee complies because they know that there are 200 charities trying to get space in that same poker room. Plus, the "charity' knows that any money made from rakes is free money, they now make a little less. Still, they have the room!
In addition, the state is taking a real close look at just who is obtaining license and where the money is ultimately ending up. In a nutshell, the law stipulates that the mission of the non-profit or charitable organization must be for the advancement of a religion, education, moral and social purpose, etc. In other words,--money going for the help of others. I kid you not....one licensee that has a zillion poker events per year is the "adopt a rabbit society." Does anybody think for a moment that 100% of the proceeds from that game goes entirely to bugs bunny food?
For example, the regulations state that the organization must have a certain number of their officers physically on site during their event. Plus, only the licensee can touch the money. And, no money can swing from one organization's game to the other's (there are sometimes as many as 6 organizations putting on events in the same poker room per-night.)
As it turns out, some organizations have so many events that none of their people are present on certain nights, as required by law. They simple turn the game entirely over to the poker room. The charity calls up the next day and asked the poker rooms, "Well, how did we do last night?"
Some poker rooms have actually put the muscle on the charities (sic) by, in addition to the split, "request" that some of the split goes to one of the poker room's designated charities. The licensee complies because they know that there are 200 charities trying to get space in that same poker room. Plus, the "charity' knows that any money made from rakes is free money, they now make a little less. Still, they have the room!
In addition, the state is taking a real close look at just who is obtaining license and where the money is ultimately ending up. In a nutshell, the law stipulates that the mission of the non-profit or charitable organization must be for the advancement of a religion, education, moral and social purpose, etc. In other words,--money going for the help of others. I kid you not....one licensee that has a zillion poker events per year is the "adopt a rabbit society." Does anybody think for a moment that 100% of the proceeds from that game goes entirely to bugs bunny food?
December 18th, 2013 at 6:37:26 PM
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Stoney raises some important and valid concerns. I for one would not play in MI if such things do occur.
Some people need to reimagine their thinking.
December 19th, 2013 at 8:55:01 AM
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Additional thoughts...
Because of all the abuses going on in these poker rooms, the State has put a moratorium on issuing new licenses for poker rooms.
That action had the exact opposite effect of what the State wanted to achieve. Rather than than "freezing out" the poker room, it provided them with a virtual monopoly in that non-profits and charities we forced to use the 40 or so poker rooms that were in existence before the moratorium went in to effect.
As such, charities were lined up from here to the moon trying to get a space for their game in a poker room. And, with so much demand, that's when the greed button is pushed by the poker rooms. So now, if you wanted to have a game, you had to pay a vig to the poker room. Don't want to pay? Well, there are 200 organizations waiting in line to take your place if you don't pay the vig!
So, the State finally figured this out. Soon, they will lift the moratorium on issuing licenses allowing for new poker rooms. This naturally will make more rooms available for nonprofits and charities to conduct their games. Supply and demand. Pretty smart, in my opinion.
There is still another things that the State is doing that I will touch on later.
Because of all the abuses going on in these poker rooms, the State has put a moratorium on issuing new licenses for poker rooms.
That action had the exact opposite effect of what the State wanted to achieve. Rather than than "freezing out" the poker room, it provided them with a virtual monopoly in that non-profits and charities we forced to use the 40 or so poker rooms that were in existence before the moratorium went in to effect.
As such, charities were lined up from here to the moon trying to get a space for their game in a poker room. And, with so much demand, that's when the greed button is pushed by the poker rooms. So now, if you wanted to have a game, you had to pay a vig to the poker room. Don't want to pay? Well, there are 200 organizations waiting in line to take your place if you don't pay the vig!
So, the State finally figured this out. Soon, they will lift the moratorium on issuing licenses allowing for new poker rooms. This naturally will make more rooms available for nonprofits and charities to conduct their games. Supply and demand. Pretty smart, in my opinion.
There is still another things that the State is doing that I will touch on later.
