State Rep. Tom Barrett suggested the Republican-controlled legislature would challenge Republican Gov. Rick Snyder to veto the bill.
The Michigan State Legislature moved this week to ease restrictions on charitable gaming in the state, due to an ongoing crackdown which has hurt cheritable giving. The law involved so-called “millionaire parties“, a term used to describe poker nights in Michigan.
The Michigan House of Representatives voted 100-9 t0 allow various civic, religious, and service groupsd to host millionaire parties. The groups affected including churches, school groups, and service professionals like police and fire departments.
What Is a Millionaire Party?
At a typical millionaire party, a charitable group hosts a poker night with miniature tournaments involving Texas Hold’em and other card games. Those in attendance pay an entry fee, while a handful of the top competitors win cash prizes. Most of the money goes to a charity organization’s general fund.
The move this week by Michigan lawmakers was to curb the excesses of the Michigan Gaming Control Board. In 2012, Gov. Rick Snyder gave the Gaming Control Board broad oversight of the charitable gaming industry in Michigan. Smaller charities have been critical of the way policies have been enforced in the 5 years since, as they say the rules themselves are unfair to smalltime operators.
Michigan Gaming Control Board Overstepped Authority
Michigan State Rep. Tom Barrett said that the Michigan Gaming Control Board has overstepped the reasonable limits of its authority. Rep. Barrett said that Mom-and-Pop charitable organizations have been “squeezed out” by the Gaming Control Board. Barrett added that the charities have had an “incredibly difficult time” dealing with state regulators, who have made it next-to-impossible to operate a charity fundraiser which actually raises funds.
Tom Barrett said that the charitable fundraising “benefits a lot of our communities and should be allowed to be done without overarching regulation that’s done in a way that just tries to inconvenience them instead of safeguard the public from abuse.”
Gaming Control Board’s Concerns
When asked to comment on the new proposed House rules, the Gaming Control Board declined to comment. The House Fiscal Agency volunteered an opinion for the GCB, saying it was concerned about a rule that would raise the monetary limit on its discretion to deny licenses to charities.
Under the current rules, the Gaming Control Board can deny licenses to charities that exceed a daily per-event limit of $15,000 on millionaire parties. The House bill this week would raise the daily per-event limit to $20,000, which the Gaming Control Board opposes (according to the Fiscal Agency).
Profits and Prosecutions from Michigan Charitable Gaming
In 2016, Michigan charitable foundations sold $93.5 million in poker chips. The foundations received a net profit of $8.8 million on that $93,000,000-plus in gaming action, roughly equivalent to the 10% rake one might expect from an online poker organizer.
Those numbers are about half of what they were during the peak year for millionaire clubs, only five years ago. In 2011, charitable foundations sold $197.3 million in poker chips, while collecting $19.7 million in revenues for their charities.
Supporters of the Michigan Gaming Control Board’s more stringent enforcement point out several prosecutions against charity organizers alleged to have skimmmed profits from the millionaire clubs. Those prosecutions led to lawsuits by Michigan charitable gaming associations, which may have raised awareness with the public and raised the issue with lawmakers.
2015 Charitable Gambling Bill
In 2015, the Michigan Senate passed a bill similar to the one that the Michigan House passed this week. That gives hope that the upper house of Michigan politics will follow suit and pass the House’s bill. If so, that would force a confrontation with Gov. Rick Snyder.
The 2015 millionaire party bill never reached Gov. Snyder’s desk. He threatened to veto the bill at the time, killing enthusiasm for passing the 2015 bill in the Michigan House.
Michigan GOP Lawmakers Challenge GOP Governor
This time, the GOP-dominated Michigan legislature appears ready for a confrontation with Gov. Snyder, threatening the Republican governor with a potential showdown over charitable gaming with his own party.
Rep. Tom Barrett, also a Republican, seemed to think the governor’s earlier threat of a veto was a bluff. Suggesting that the legislature addressed some of Rick Snyder’s earlier concerns, Rep. Barrett said GOP lawmakers were ready to test the governor’s will.
Referring to the Michigan governor, Rep. Barrett added, “We’ll see what he does.”
