Traverse City Record-Eagle

Michigan

November 4, 2013

Crackdown on charity poker rooms brings backlash

LANSING (AP) — Explosive growth in the popularity of poker has helped Michigan’s charities, churches and civic groups stay afloat at a time of dwindling donations from elsewhere.

So perhaps it should come as no surprise that the state’s efforts to rein in the charitable gambling industry that has grown more than 20-fold in a decade are sparking backlash — some of it in the form of raw emotion.

Gov. Rick Snyder’s deputy lawyer Dave Murley drew rare boos in a crowded Capitol committee room the other day when he told lawmakers: “Charitable poker began as a good cause, evolved into a highly lucrative business and has degenerated into a racket.”

At stake is the future of “millionaire parties,” casino-style events where nonprofits split cash proceeds with unlicensed poker rooms that provide the space, dealers, poker chips and playing cards along with food and drinks. Many veterans groups, prep sports booster clubs and other nonprofits are no longer hosting Texas Hold ‘em and blackjack fundraisers in small church basements and halls, instead contracting with what authorities charge are large “de facto casinos” run through bars and poker rooms.

Revenue from the events reported to the state was $7.9 million in 2002, peaked at $197 million in 2011 and dipped to $184 million in 2012, though officials believe it is more because loopholes have been found in $15,000 chip caps. Charities’ profits rose from $3.6 million in 2002 to $19.2 million two years ago before leveling at $15.8 million.

Tension has been building ever since Snyder in June 2012 transferred oversight of the millionaire parties from the Lottery Bureau to the Michigan Gaming Control Board and its regulators familiar with monitoring highly regulated operations at horse tracks and Detroit’s casinos. The agency, which already had been working with the lottery to close down sites due to illegal gambling, cracked down on some larger bars that contributed to a 22 percent drop in licenses issued for millionaire parties through the first half of this year.

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