While a stalemate has been reached in the Michigan General Assembly regarding proposed new regulations by the Michigan Gaming Control Board over the state’s charitable poker room industry, a new fighter has emerged in the game. On Friday, a Michigan Court of Claims judge will hold a hearing to determine if the court system should block the MGCB’s new rules regarding the industry.
According to Jim Kiertzner of Detroit television station WXYZ, the hearing on Friday afternoon will determine whether an injunction to postpone the MGCB’s regulations will be held. The case, brought by several of the charitable causes that have been the beneficiary of the charitable poker room industry, is looking to return to the standards that have been in place prior to MGCB director Rick Kalm’s attempts to rein in the industry. Those rules would drastically alter not only the charities’ fundraising abilities but also could potentially drive the charitable rooms out of business.
Under the new regulations as set forth by Kalm, instead of being able to function seven days a week (as the industry has since its inception in the 1990s), charitable poker rooms would be limited to only four days per week of action or roughly 208 days out of the year. There are also other deterrents in place, such as requiring more members of the charities on the floor for the events, cuts in chip purchases and limits on the hours the charitable rooms can operate. Kalm has backed off on a couple of his stances, however, including limiting the rooms to only 30 days of action per year and lifting the moratorium that he placed on the industry in 2010 to allow for more rooms to open. The proposed rules by Kalm and the MGCB do not need approval by the Michigan General Assembly, just the approval of an Assembly committee that oversees the MGCB.
Not happy with the MGCB decision, the Michigan General Assembly jumped into the fray after Kalm announced his final proposal. A senate bill brought by Michigan State Senator Rick Jones, S. B. 878, would remove many of the proposals that Kalm is looking to implement. The bill would leave rooms able to operate seven days a week and would expand the industry to Michigan’s horse racing tracks. The bill, unanimously passed out of the Michigan Senate, has run into roadblocks in the House, though.
Although they have held hearings on the subject, the Michigan House is currently sitting on the bill and hasn’t even brought it to a vote in committee, necessary if it is to move onto the full House for consideration. There are also rumblings that, even if the bill were to be passed by the House, Governor Rick Snyder could use his veto pen to shoot down the bill.
Over the past four years, the MGCB (under the auspices of Kalm) have closed 40 rooms for various violations of the charitable gaming laws. Some of those violations have been particularly violent, such as armed robbery, assault and fraud, while others have been relatively minor such as liquor law violations and payment of dealers under the table.
The Michigan charitable poker industry has become very popular and very lucrative in just the last 10 years. In 2002, the charitable poker rooms reported revenues of $7.9 million and the charitable causes, such as the Kiwanis Club, the Lions Club and various other smaller organizations, reported $3.6 million in revenues. Those totals ballooned in only ten years, with the charitable rooms reporting revenues of $184 million and the charitable causes pulling in $15.8 million in much needed funds.
The outcome of the hearing Friday could be a very pivotal point in the ongoing debate over Michigan’s charitable poker room industry. If the judge finds for the charities that have filed the suit, a stay on the new rules instituted by the MGCB would be put in place. If the judge determines that the new rules should go forward, then only the Michigan General Assembly could put a stop to Kalm and the MGCB’s actions with the legislation that is still pending in that body.
