Michigan Non-Profits Sue State over New Poker Rules
May 30th, 2014 at 9:36:04 AM
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http://www.mlive.com/lansing-news/index.ssf/2014/05/michigan_nonprofits_file_lawui.html#incart_river_default
This was inevitable. The Michigan Gaming Control Board has for the last several years tried to put stronger regulations on charitable gaming in Michigan, more specifically: poker and poker rooms. Currently, charity poker is about a $200 million business and it definitely has siphoned business away for the big casinos. Unfortunately, as the charities see it, these regulations will kill charity poker because it will kill the suppliers that charities rely upon to to conduct their events. Even tradition games one sees at carnivals and festivals will be forced to go out of business as a result of these new rules.
Charity poker is quite unique. A non-profit can obtain a license to conduct 16 events per year. Local bars and restaurants provide a banquet room, equipment , tables and dealers. The charity provides the license and 3 of their bona fide members must be present at the event and handle all the money. At the end of the night, the charity splits the take 50/50 with the room. Sometimes, as many as 4 charities conduct events in the same room at the same time, each in its own demarcated area and without intermingling the cash. the room makes its 50% off each charity plus, the room makes all the money from food and beverage sales.
It's a great deal for all. A charity can make several thousand dollars per night for a $50 license and having just a few of its members present. The room makes the same amount from each group it hosts, plus the beer and pizza money. The problem that has emerged is that Michigan has a paltry $15,000 per day wager limit and player demand for chips often is greater than the limit. The rooms have cooked the books by showing that they have kept within the $15K limit however, in reality they have often sold much much more than the limit allows. Plus, some charities have been guilty of not even attending their own event by simply allowing the poker room to handle the entire event start to finish.
The new rules take aim at the suppliers. The mindset is, if you put the supplier out of business, poker will simply go away because most charities do not have the wherewithal and/or resources to conduct an event on their own. Currently, a poker room can host as many charities as their room physically allows. They can be open 365 days per year (most are).
The new rules create 3 distinct entities, the charity, the room (location) and the supplier hired to manage the game. Formerly, the latter were one and the same. No more.
The new rules stipulate that the location host charge no more than $275 per-day for rental of its space and can not be any party to the gaming event.
The new rules stipulate that no more than 2 charities can conduct an event in the same room at the same time.
The new rules stipulate that the location can not host more than 208 events during a calendar year (versus 365)
The new rules stipulate that the gaming supplier can be paid no more than 45% of the house profit, irrespective of its costs for providing its services.
The new rules give the Gaming Control Board far-reaching powers where they can arbitrarily revoke licenses,
cancel events, reduce hours of operations and change the wager limits without cause.
This is going to be a long and bloody battle. There is , in my opinion a quick and easy fix to these matters that nobody has broached. It's so simple that it boggles the mind. Take a guess at what you think the solution is.
Film at 11.
This was inevitable. The Michigan Gaming Control Board has for the last several years tried to put stronger regulations on charitable gaming in Michigan, more specifically: poker and poker rooms. Currently, charity poker is about a $200 million business and it definitely has siphoned business away for the big casinos. Unfortunately, as the charities see it, these regulations will kill charity poker because it will kill the suppliers that charities rely upon to to conduct their events. Even tradition games one sees at carnivals and festivals will be forced to go out of business as a result of these new rules.
Charity poker is quite unique. A non-profit can obtain a license to conduct 16 events per year. Local bars and restaurants provide a banquet room, equipment , tables and dealers. The charity provides the license and 3 of their bona fide members must be present at the event and handle all the money. At the end of the night, the charity splits the take 50/50 with the room. Sometimes, as many as 4 charities conduct events in the same room at the same time, each in its own demarcated area and without intermingling the cash. the room makes its 50% off each charity plus, the room makes all the money from food and beverage sales.
It's a great deal for all. A charity can make several thousand dollars per night for a $50 license and having just a few of its members present. The room makes the same amount from each group it hosts, plus the beer and pizza money. The problem that has emerged is that Michigan has a paltry $15,000 per day wager limit and player demand for chips often is greater than the limit. The rooms have cooked the books by showing that they have kept within the $15K limit however, in reality they have often sold much much more than the limit allows. Plus, some charities have been guilty of not even attending their own event by simply allowing the poker room to handle the entire event start to finish.
The new rules take aim at the suppliers. The mindset is, if you put the supplier out of business, poker will simply go away because most charities do not have the wherewithal and/or resources to conduct an event on their own. Currently, a poker room can host as many charities as their room physically allows. They can be open 365 days per year (most are).
The new rules create 3 distinct entities, the charity, the room (location) and the supplier hired to manage the game. Formerly, the latter were one and the same. No more.
The new rules stipulate that the location host charge no more than $275 per-day for rental of its space and can not be any party to the gaming event.
The new rules stipulate that no more than 2 charities can conduct an event in the same room at the same time.
The new rules stipulate that the location can not host more than 208 events during a calendar year (versus 365)
The new rules stipulate that the gaming supplier can be paid no more than 45% of the house profit, irrespective of its costs for providing its services.
The new rules give the Gaming Control Board far-reaching powers where they can arbitrarily revoke licenses,
cancel events, reduce hours of operations and change the wager limits without cause.
This is going to be a long and bloody battle. There is , in my opinion a quick and easy fix to these matters that nobody has broached. It's so simple that it boggles the mind. Take a guess at what you think the solution is.
Film at 11.
May 30th, 2014 at 10:00:54 AM
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sounds like the state isn't making money on it so they are making it tougher to do business.
Also, it doesn't seem fair that the casino's have to pay huge taxes but these places get off on the cheap.
Also, it doesn't seem fair that the casino's have to pay huge taxes but these places get off on the cheap.
Expect the worst and you will never be disappointed.
I AM NOT PART OF GWAE RADIO SHOW
May 30th, 2014 at 10:16:38 AM
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Quote: GWAEsounds like the state isn't making money on it so they are making it tougher to do business.
Also, it doesn't seem fair that the casino's have to pay huge taxes but these places get off on the cheap.
There is some speculation that the casinos are behind all of this. I'm not so sure of the Indian casinos because only the Detroit casinos pay taxes.
That said, the majority of the poker rooms are in the Detroit metro region, all within easy driving distance for all. Plus, the Detroit casinos have seen revenues go down significantly as a result of an over-saturated and aging gaming market. Unless Greektown Casino does something radical (go non-smoking and/or relocate) it may find itself as the odd man out. So, it could stand to reason that the Detroit casinos have a part in this because of the downturn and the city/State siphon off about $500,000 per day from the 3 Detroit Casinos.
May 30th, 2014 at 1:06:53 PM
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Update...
Friday, May 30, 2014, 02:49 PM
Court Grants Injunction Against New Charitable Gaming Rules
A judge granted a request today from charitable gaming groups for a preliminary injunction halting new rules the states wants to implement regulating their operations.
Court of Claims Judge Pat Donofrio ruled that the groups had proven irreparable harm would occur under the rules in granting the preliminary injunction.
Friday, May 30, 2014, 02:49 PM
Court Grants Injunction Against New Charitable Gaming Rules
A judge granted a request today from charitable gaming groups for a preliminary injunction halting new rules the states wants to implement regulating their operations.
Court of Claims Judge Pat Donofrio ruled that the groups had proven irreparable harm would occur under the rules in granting the preliminary injunction.
May 30th, 2014 at 1:42:32 PM
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Government is for sale everywhere. Destroying other parties with legislation is how it works if you can afford it. They don't tell any other business they make too much money.
I am a robot.
July 10th, 2014 at 8:09:20 AM
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The drama continues....
While the State of Michigan has been prohibited by a court from implementing the new regulations regarding charitable gaming, the Governor, Rick Snyder, bypassed both the courts and the legislature by issuing an "Executive Order" to put these rules in force. The basis for the executive order was/is that there was a "Finding of Emergency". In other words, the State has determined that without these new regulations in place, "far-reaching negative consequences to the public health, safety and welfare will continue."
Immediately, the Michigan Charitable Gaming Association went to court to stay the Executive Order. It is highly probable that the Governor will be stopped again as these matters will be taken up by the same court that issues the first injunction." This is not good publicity for a person running for re-election in a few months as, I am sure his opponent will certainly exploit. A sitting governor having an executive order rebuked by the courts over a trivial issue such as charitable gaming does not play well with voters.
Here is an update from the Michigan Charitable Gaming Association>
Michigan’s charities went back to court late yesterday over the Snyder administration’s continuing efforts to kill local charities’ efforts to raise funds.
After the Michigan Court of Claims ruled in May that the state could not impose harmful new rules against the charities, the state’s Gaming Control Board on Monday announced the imposition of “emergency” rules that mirror those barred by the court.
“The Governor has gone around the Court because he didn’t like the decision,” said Stephanie Van Koevering, spokesperson for the Michigan Charitable Gaming Association and other plaintiffs in the case. “The proper response to the ruling would have been to appeal the judge’s decision, but the Governor chose not to. Now he is not only going around the court, he is also going around the state Senate and House.”
Van Koevering said the state’s Administrative Procedures Act allows for the imposition of emergency rules when an actual emergency exists, not when state executive leaders dislike certain legislative and judicial outcomes. She argues that the definition of an emergency must be upheld, lest a slippery slope result in every unfavorable court decision becoming a state executive “emergency.”
“The APA requires the administration to demonstrate that public health, safety, or welfare requires promulgation of an emergency rule—and that’s a standard that hasn’t been met in this case,” Van Koevering said. “Michigan’s charities are left wondering why on earth the Governor is spending his political capital on an issue that is so small in the grand scheme of things. Charitable gaming is a tiny activity to focus on in the midst of enormous issues like statewide economic stabilization and turnaround, roads and bridges, taxation, Detroit’s bankruptcy, school performance, and so forth. What’s going on here, really?”
In granting the earlier injunction, Judge Pat Donofrio ruled that the plaintiffs had proven their claim that irreparable harm was imminent if the MGCB rules took effect.
“Indeed, as of this morning, charities are no longer able to access funds as charitable gaming venues are being denied licenses,” Van Koevering said. “It’s already begun.”
Van Koevering noted that the constant uncertainty surrounding the rules process has made operating charitable organizations and small businesses in Michigan very overwhelming.
“People have been laid off, only to be told they can return to work the next week, budgets have been passed and commitments made to charitable programs only to have their expectations dashed,” Van Koevering said. “The Senate realized that there is a lack of leadership on this issue in the Governor's office, and they tried to address some of the state's regulatory concerns by passing SB 878. The House needs to act and they need to act now.”
Michigan’s charitable gaming laws have been on the books for the past 41 years, and now rely on millionaire parties as a significant fundraising opportunity.
“The House needs to help the charities find a good balance that will help the state provide consistent, fair regulation over time,” Van Koevering said. “Charitable gaming provides $19 million each year to Michigan's most vulnerable citizens—small potatoes on the Governor’s radar screen, but important for tiny nonprofits. It is not worth ignoring the real issues facing our state in an effort to go after local Kiwanis clubs and veterans’ groups.”
1
While the State of Michigan has been prohibited by a court from implementing the new regulations regarding charitable gaming, the Governor, Rick Snyder, bypassed both the courts and the legislature by issuing an "Executive Order" to put these rules in force. The basis for the executive order was/is that there was a "Finding of Emergency". In other words, the State has determined that without these new regulations in place, "far-reaching negative consequences to the public health, safety and welfare will continue."
Immediately, the Michigan Charitable Gaming Association went to court to stay the Executive Order. It is highly probable that the Governor will be stopped again as these matters will be taken up by the same court that issues the first injunction." This is not good publicity for a person running for re-election in a few months as, I am sure his opponent will certainly exploit. A sitting governor having an executive order rebuked by the courts over a trivial issue such as charitable gaming does not play well with voters.
Here is an update from the Michigan Charitable Gaming Association>
Michigan’s charities went back to court late yesterday over the Snyder administration’s continuing efforts to kill local charities’ efforts to raise funds.
After the Michigan Court of Claims ruled in May that the state could not impose harmful new rules against the charities, the state’s Gaming Control Board on Monday announced the imposition of “emergency” rules that mirror those barred by the court.
“The Governor has gone around the Court because he didn’t like the decision,” said Stephanie Van Koevering, spokesperson for the Michigan Charitable Gaming Association and other plaintiffs in the case. “The proper response to the ruling would have been to appeal the judge’s decision, but the Governor chose not to. Now he is not only going around the court, he is also going around the state Senate and House.”
Van Koevering said the state’s Administrative Procedures Act allows for the imposition of emergency rules when an actual emergency exists, not when state executive leaders dislike certain legislative and judicial outcomes. She argues that the definition of an emergency must be upheld, lest a slippery slope result in every unfavorable court decision becoming a state executive “emergency.”
“The APA requires the administration to demonstrate that public health, safety, or welfare requires promulgation of an emergency rule—and that’s a standard that hasn’t been met in this case,” Van Koevering said. “Michigan’s charities are left wondering why on earth the Governor is spending his political capital on an issue that is so small in the grand scheme of things. Charitable gaming is a tiny activity to focus on in the midst of enormous issues like statewide economic stabilization and turnaround, roads and bridges, taxation, Detroit’s bankruptcy, school performance, and so forth. What’s going on here, really?”
In granting the earlier injunction, Judge Pat Donofrio ruled that the plaintiffs had proven their claim that irreparable harm was imminent if the MGCB rules took effect.
“Indeed, as of this morning, charities are no longer able to access funds as charitable gaming venues are being denied licenses,” Van Koevering said. “It’s already begun.”
Van Koevering noted that the constant uncertainty surrounding the rules process has made operating charitable organizations and small businesses in Michigan very overwhelming.
“People have been laid off, only to be told they can return to work the next week, budgets have been passed and commitments made to charitable programs only to have their expectations dashed,” Van Koevering said. “The Senate realized that there is a lack of leadership on this issue in the Governor's office, and they tried to address some of the state's regulatory concerns by passing SB 878. The House needs to act and they need to act now.”
Michigan’s charitable gaming laws have been on the books for the past 41 years, and now rely on millionaire parties as a significant fundraising opportunity.
“The House needs to help the charities find a good balance that will help the state provide consistent, fair regulation over time,” Van Koevering said. “Charitable gaming provides $19 million each year to Michigan's most vulnerable citizens—small potatoes on the Governor’s radar screen, but important for tiny nonprofits. It is not worth ignoring the real issues facing our state in an effort to go after local Kiwanis clubs and veterans’ groups.”
1
July 10th, 2014 at 9:49:30 AM
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Charitable gambling violates the first rule of politics. They are guilty of recreation without taxation.
The Governor can not allow this injustice to continue.
The Governor can not allow this injustice to continue.
Shed not for her
the bitter tear
Nor give the heart
to vain regret
Tis but the casket
that lies here,
The gem that filled it
Sparkles yet
July 10th, 2014 at 11:05:48 AM
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Quote:The rooms have cooked the books by showing that they have kept within the $15K limit however, in reality they have often sold much much more than the limit allows. Plus, some charities have been guilty of not even attending their own event by simply allowing the poker room to handle the entire event start to finish.
Well, it sounds like someone is breaking the law, and by doing so, "charitable gaming" becomes a sham. The simple solution is to limit the buy-ins to under $15000, and have 3 members of the charity present.
A falling knife has no handle.
July 10th, 2014 at 11:09:50 AM
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Quote: BuzzardCharitable gambling violates the first rule of politics. They are guilty of recreation without taxation.
And those charitable losses no doubt get deducted, too.
Doubleplusungood. Room 101.
Donald Trump is a fucking criminal
July 10th, 2014 at 12:35:15 PM
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Quote: MoscaWell, it sounds like someone is breaking the law, and by doing so, "charitable gaming" becomes a sham. The simple solution is to limit the buy-ins to under $15000, and have 3 members of the charity present.
Just to clarify..the $15,000 wager limit is the total amount of chips that can be sold in a day, no matter how many players there are. It is NOT a $15,000 per-player buy in limit. If that were the case, the handle would be in the 6 or even 7-figures each day.
I have stated all along that the $15,000 per day wager limit is too small to meet the demand from players. I manage a traditional charitable gaming operation; craps, blackjack, roulette, etc. On many nights, we sell out of chips by 9:00 PM. This means we lose on admission revenue, incremental gaming revenue and incremental food and beverage revenue. Bottom line, nobody is going to come in to the room if they can't purchase chips to gamble with. The solution is simple: substantially raise and/or eliminate the wager limit.
Casinos do not have a set amount of chips they will sell during a given day. They do however, have a "bet limit", which is a prudent way for the house to protect itself. If the Michigan wager limit was increased to say $100,000 per day, I would not change our "bet limit" strategy one bit. It would still remain at the $1-$10 per-bet level. All it would do is allow us to make more money because we are able to sell more chips to players. Now, we lock the front door when we reach $15,000 and, that's simply NUTS!
