After more than three years of fighting to rein in their state’s charitable poker rooms operations, the Michigan Gaming Control Board suddenly has dropped their proposed new regulations that would have curtailed the industry.
During a meeting of the Joint Committee on Administrative Rules (the Michigan General Assembly’s legislative arm hearing the changes) late this week, the MGCB withdrew their proposed regulatory changes “at this time” in response to what has been an outpouring of condemnation from charities, poker rooms and customers. In an official statement reported by Kathleen Gray of the Detroit Free Press, the MGCB said the withdrawal was “made in order to determine if adjustments can be made to the rules and still accomplish the goal of the MGCB to ensure the integrity of the games and protect the charity’s ability to raise funds.”
The rules that the MGCB were looking to implement would have had a dire impact on the Michigan charity poker industry, but were less draconian than previous suggestions. Poker rooms could have only operated four days per week (208 days out of the year); a requirement was instituted that would have forced charities to have three volunteers at each tournament; the charities had to prove that more than $500 of their fundraising came from other sources than the poker tournaments; and the split between charities and “suppliers” (poker rooms) moving from 50/50 to 65/35, with the charity getting the larger chunk.
At the start of 2013, the MGCB began to hammer on some of the charitable rooms, of which there are approximately 40 around the state. The MGCB closed several rooms because of various violations of the standing regulations that included illegal gambling, payment of dealers by players, liquor law violations and an assortment of more serious crimes that included armed robbery, assault and fraud. As the year wore on, the executive director of the MGCB, Rick Kalm, proposed a heavy-handed set of new regulations to curtail some of these violations.
Kalm proposed in August that, in exchange for lifting a ban on the opening of new charitable poker rooms (no new licenses had been awarded since 2011), there would be more stringent regulation on the industry. Kalm wanted a stoppage time of midnight for all events and a 30 day limit on the number of days a charitable poker room could be active (among other proposals). These new regulations were met with derision from the industry.
Kalm would amend those regulations to allow for up to 120 days of operations and that “some” outlets would be allowed to remain open until 2AM. With this in mind, however, he wanted to limit each room to one charitable tournament per day with maximum chip sales of $15,000. During hearings in November and December on these proposals, the charitable poker room industry still wasn’t swayed and state legislators started to step in.
Michigan State Representative Jeff Farrington proposed legislation that flew in the face of the Kalm-led actions of the MGCB, but he tabled that proposed bill, House Bill 4960, after Kalm relented in some of his regulatory pursuits. Just this January, Kalm offered the proposals that were pulled off the board by the MGCB in this week’s instance.
As the regulations sit now, charitable poker rooms can hold three events per day with a maximum chip sales of $45,000. The 50/50 split still remains in place and the poker rooms can make a bit more through concessions. These regulations are a far cry from what the Michigan industry once looked like, though; as recently as 2012, the rooms could offer up to six events per day and chip sales of $90,000, with several organizations garnering much of their fundraising income from the tournaments.
Whether “at this time” means that the MGCB is relenting on some of their opinions and waiting for a framework that everyone can agree on or just waiting until some of the fervor dies down is unknown. For the time being, however, the Michigan charitable poker industry will be able to continue onward, hopefully with a little less drama than has been seen over the past three years.
