New regulations for the charitable poker industry in the state of Michigan have gone into effect as of this week, but those new rules may be struck down by legislation if the Michigan legislature has its way.
According to CBS Detroit, the new regulations that had been suggested by the executive director of the Michigan Gaming Control Board, Rick Kalm, went into effect on Wednesday, basically limiting the “millionaire parties” that can be held by the charitable poker rooms in the state. Instead of being able to operate seven days a week, the charitable poker rooms can now only operate 208 days out of the year, or four days per week. No more than two “millionaire parties” can be held each day and the revenues from said tournament are now split 55%/45% (with the charities receiving the larger amount) rather than the 50-50 split that had previously existed.
These changes could be short-lived, however, if the Michigan legislature has anything to say about the subject. In response to Kalm’s heavy handed approach to regulating the charitable poker industry in the Wolverine State, Michigan State Senator Rick Jones introduced a bill in April, S. B. 878, that would remove many of the new rules that have been set in place. There would be no regulation as to the number of days that poker rooms could operate and it would also open up Michigan’s racetracks to join the industry. It would also confirm the industry’s right to exist, something that has been under attack by the MGCB and Kalm with the license freeze and closure of rooms over the last three-plus years.
The Jones bill passed through the Senate rather quickly, but the House has been the area where it has bogged down a bit. On the same day that the new regulations went into effect in Michigan, a House committee held its first hearing on the subject. Even if the House were to pass the Senate bill as it stands, there is some consternation in the charitable gaming industry that Michigan Governor Rick Snyder may veto any proposal that comes from the legislature.
Jones commented on his bill to CBS Detroit, stating, “The rules don’t allow enough games to take place so enough charities can be served so the room can make enough money. (The rooms) need to make enough to exist.” A spokesman for House Speaker Jase Bolger indicated that at least one more hearing on the subject would be held (saying that the first hearing brought about “good discussion”), but it was unclear whether Bolger would bring it to the House floor for a vote.
The Jones bill has drawn support from the players and poker rooms due to its relaxed regulations (for example, the daily limit on chip sales per charity would increase from $15,000 to $20,000 and, if a charity was able to run the games themselves, chip sales could increase to $50,000) and its 24/7 allowance for the games to take place.
The impact of the charitable poker industry in Michigan is a significant one. In 2002, revenues of $7.9 million were reported to the state; ten years later, that profit had ballooned up to $184 million. The rooms weren’t the only winners in this case, as the charities saw their take of the action rise from $3.6 million in 2002 to $15.8 million in that same time span.
The battle over the charitable poker industry has been more than three years in the making. Since 2010, no new rooms have been licensed (coinciding with the MGCB taking over its oversight) and nearly 40 rooms have been closed for a variety of restrictions that include illegal gambling, payment of dealers by the players, liquor law violations and an assortment of more serious crimes such as armed robbery, assault and fraud. While both sides state that regulation is necessary, how to reach those regulatory goals still seems to be out of reach.