After more than two years of argument over the issue of the state’s charitable poker room industry, Michigan regulators have reached a compromise that, pending approval, would allow the industry to continue in the state. Those regulations, however, have some charity poker rooms pondering whether they will be able to stay in business.
According to MLive.com’s Melissa Anders, the Michigan Gaming Control Board announced on Thursday a compromise. The head of the MGCB, Rick Kalm, had proposed new regulations that would have been a death knoll for the Wolverine State’s charitable poker rooms, including such harsh regulation as each room only being able to offer one event per day, that the rooms could only operate 30 days out of the year and that chip sales would be capped at $15,000 per event. After a couple of public hearings on those regulations, Kalm amended his proposal to allow rooms to operate up to 120 days out of the year, but kept in place other parts of his guidelines.
Under the compromise regulations, charitable poker rooms would be able to operate up to four days per week (208 days over the span of a calendar year), but the one charitable event per day rule would still be in place. Rooms would be capped at $250 the “rent” they could charge charities for running their charitable event and three people from the charitable cause would have to be on the premises during the tournament. Chip sales would also still have the $15,000 cap. If the new regulations go through, the ban on new charitable poker rooms that has been in place since 2011 would be lifted.
The current regulations allow for three charitable events at each room with $45,000 in chips sales and no restriction on the number of days a room could operate. This is a far cry from what the new regulations would offer, but it is also heavily restrictive considering the regulations as they were before last year. Prior to the MGCB’s enacting of the current regulations last year, poker rooms were allowed to run up to six tournaments per day, with chip sales totaling $90,000, and there wasn’t any restriction on the number of days a room could operate.
Michigan State Representative Jeff Farrington, who had opposed the new regulations proposed by Kalm and had introduced a bill that would counter his actions, was questioned by Anders regarding the new regulations. “I understand the large poker rooms didn’t come away with what they needed to continue on, but the end goal for me was to make sure the charities had a revenue source,” Farrington is quoted by Anders. As a part of the compromise regulations, Farrington has agreed to drop his bill in the Michigan General Assembly.
Kalm also cited the ability of charities to raise money, stating to Anders, “We really wanted to make sure we could still allow charities to do the fundraising, but we found quite a bit of fraud and charities that were taken advantage of and charities that didn’t want to take ownership of it.” Kalm added that, while the current one charitable event per day is in the current version of the regulations, that may be amended to allow for more tournaments.
Anders reports that the charitable poker rooms are still not happy with the compromise regulations, however. Mike Schuchaskie, who owns the charitable poker room Tripper’s in Lansing and another room in Northville, said to Anders he was “disappointed” that the state wouldn’t allow for the poker rooms to operate seven days a week. “What’s next?” he responded to Anders when informed of the new regulations. “Is the state going to cut days that a party store can operate, or a gas station? I just don’t understand why they would want to cut the number of days that any business could operate.”
It is not certain how many of the 40 rooms that operate in Michigan would cease to exist under the new regulations, but many expect that there will be some closures. Along with those closures, jobs that are provided by the charitable poker room industry would be lost. Perhaps most importantly, however, will be the charitable causes that lose a method of fundraising that had been a boon to some. In 2012, 2525 charities applied for the “millionaire party” licenses (the format that is used to legally operate a charitable poker tournament in Michigan) that brought in almost $16 million in revenues, or approximately $6000 per charitable event.
The compromise regulations are being finalized at this point, according to Anders. By the end of January, the package will be sent to a joint legislative committee and that committee will have up to 15 session days to review and act on the compromise regulations.