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House bill would reverse recent changes to charitable gaming rules

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House bill would reverse recent changes to charitable gaming rules

State Rep. Jeff Farrington, R-Utica, today introduced legislation that would effectively reverse recent changes enacted by the Michigan Gaming Control Board to the way charitable poker games can operate in the state.

Among other reforms, Farrington’s House Bill 4960 seeks to allow the poker rooms where the charity games take place to operate until 2 a.m. and to allow five charities to hold an event concurrently at the same location.

Farrington said the bill also proposes “common-sense” licensing standards, requirements and fees.

“Nonprofit organizations can use the money from these charitable gaming events to support many great causes across the state,” said Farrington, chair of the House Tax Policy committee, in a release.

“However, recent rules enacted by the Michigan Gaming Control Board have put a heavy burden on organizations and charities operating these games and have led to a decrease of over 70 percent in authorized licenses.

“Charitable organizations should have rules in place that allow them to participate in charitable gaming without facing unnecessary bureaucratic red tape.”

Farrington said he has been working with the Michigan Charitable Gaming Association for the past several months on the bill.

The gaming association, which represents nearly 400 for-profit charity poker room owners and charities, said in early August that it was seeking a legislative sponsor to introduce changes it’s proposing to the Traxler-McCauley-Law-Bowman Bingo Act of 1972, which governs charity poker games, among other things.

The changes issued by the gaming control board July 29, many of which were to take effect on Sept. 1, were put on hold in late August after Ingham County Circuit Judge Clinton Canady signed a temporary restraining order against the gaming control board and its executive director, Rick Kalm, to block the set of licensing and regulation updates.

Nineteen nonprofits brought a lawsuit against the gaming control board and Kalm, challenging the regulations. They claimed the updates violate state law and mean millions in lost revenue for charitable organizations.

A hearing is scheduled for Thursday to consider a preliminary or permanent injunction.

The changes at stake

Among other things, the new guidelines for the so-called millionaire parties:

  • Would put in place a new midnight curfew for the games
  • Limit to two the number of charities allowed to host games concurrently at a single site
  • Forbid dealers and other game operators from accepting game chips as tips and limit the number of chips in play on a single game to $15,000, and
  • Forbid remote software on computers used in charity poker rooms.

The new guidelines were meant to address some of the “glaring concerns” about the fundraisers, based on more than 900 site visits, and to better equip the gaming control board to monitor the games, Kalm told Crain’s in July.

He cited “an inherent lack of internal controls” at many of the poker games and noted the lack of adequate security, proper record-keeping, proper oversight of the gaming operations, illegal non-charitable gambling taking place alongside charitable games and other illegal activity spurred by the games.

The Michigan Gaming Control Board took over the issuance of licenses for the games from the Bureau of State Lottery last October.

Since then, the board has issued just 2,612 such licenses between Jan. 1 and June 24, compared with 8,573 for the same period in 2012 under the lottery bureau. That’s a decline of about 69 percent, according to data the gaming control board released to the association last month in response to a Freedom of Information Act request.


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