Someone forgot to tell charity poker rooms in Michigan about the recession.
Gambling licenses doubled in a year. Revenue jumped from $13 million to $166million in three years. The number of rooms ballooned to 192.
Not bad for something that didn’t exist until 2004.
But the rapid growth of the card rooms, a hybrid of private and charitable enterprise, comes with an expensive ante.
It strains the state’s ability to regulate it, legislators said. The Michigan Lottery’s charitable gaming division imposed a moratorium on new card rooms last year.
“They’re all over the place,” said Bob Hoff, 68, a St. Clair Shores retiree who splits his playing time between two poker rooms near each other in Macomb County. “Wherever you live, you can find one.”
The fledgling industry’s growth also stretches the concept of a charity.
Among the nonprofit groups that have benefited from poker rooms in Metro Detroit are 11 chambers of commerce, the Jackson Convention and Visitors Bureau, the Democratic Club of Taylor, the West River Yacht and Cruising Club in Grosse Ile, and Bass Anglers Sportsman Society (B.A.S.S.).
“It seems like everybody is a charity nowadays,” said Paul Sacks, president of B.A.S.S.’ Michigan chapter. “Every high school, every church, every Kiwanis club.”
Charity games of chance once were a staid affair in Michigan. The biggest draw was bingo.
Then Texas Hold ‘Em, a variation of poker, exploded in popularity in 2003 when an amateur named Chris Moneymaker won $2.5 million in the heavily televised World Series of Poker in Las Vegas.
The next year, nonprofit groups convinced Michigan to allow them to use Texas Hold ‘Em as a cash game to raise money.
Just like that, Kiwanis clubs and the Jaycees had their own moneymaker.
“It’s fantastic,” said Bob Sullivan, president of the Democratic Club of Taylor. “I didn’t realize that many people are addicted to gambling.”
A casino feel
In charity poker rooms, the nonprofits oversee the money and recordkeeping while private operators do everything else — providing workers, equipment, advertising and the location. They split the profits.
The card rooms in Metro Detroit are mostly in bowling alleys, pool halls and bars. Others are at a police lodge, a harness racing track and a strip club, which closed after just two months.
One room, Trip Kings, operates from a Canton Township storefront that once held Harvest Bible Church, thereby exchanging one king for three.
The Electric Stick, a venerable pool hall in Westland, has replaced most of its pool tables with poker ones, but it’s not enough, general manager Geo Marvaso said. The crowds get so big that the few remaining pool tables are sometimes used for poker.
“It saved our business,” Marvaso said about poker. “As pool died, you have to go where it’s living.”
Under state rules, nonprofits can’t be involved in more than 16 days of poker a year. As a result, charity poker rooms rotate dozens of nonprofits.
Because the operators share in the proceeds, the more nonprofits they find, the more money they make.
At the beginning, operators said they searched for charities high and low. They scoured phonebooks, local newspapers and the Internet.
The Michigan charitable gaming division, which regulates the industry, offers helpful advice on its website. It suggests that the operators search the GuideStar database of nonprofits.
Those searches sometimes turn up some pretty fish.
Among the nonprofits helped by Metro Detroit poker rooms are Great Lakes Mastiff Rescue, the rowing booster club of St. Mary’s Preparatory school in Orchard Lake, the all-night senior party at South Lyon East High School and Parents Friends of Glen Peters School Golf Outing in Macomb Township.
Poker rooms no longer have to look for nonprofit groups. Now, the groups find them.
Some rooms have been approached by so many nonprofits that they have waiting lists.
Others said a waiting list was pointless. Its nonprofits will never give up their nights.
“I’m at the point where I’m turning people away,” said Patrick Bernhart, co-owner of Cada’s Poker Sports Grill in Sterling Heights. “The word has gotten out.”
Cada’s is co-owned by Jerry Cada, father of Joe, who won $8.5 million in the World Series of Poker main event two years ago.
The number of poker rooms in the state jumped to 192 before a state crackdown reduced it this year to 76. Not even a state smoking ban in public places in 2010 could slow the stampede as revenue climbed $20 million higher than the year before.
In 2009, Don Wawrzyniak approached a Utica pool hall about hosting charity poker there.
It started on a few tables, gradually expanded and eclipsed pool to the point where Wawrzyniak bought the building last year. Snookers’ Pool Pub is now Snookers’ Poker Room.
“It’s just like walking into a casino,” he said. “People love it.”
A lucrative fundraiser
Charity poker has been a godsend for 400 nonprofits in Metro Detroit. Many are schools, churches, youth sports and fraternal groups.
Their share of the take averages $600 a day, according to state figures. Multiply that by 16, and it’s almost $10,000 a year.
No other fundraiser comes close to making that type of money, especially during these turbulent economic times, they said.
The West River Yacht and Cruising Club no longer has to raise money by selling a lot of tickets to a dinner or holding a series of smaller events.
“This is a lot easier,” club Commodore Betty Tyson said. “We’re not out there trying to get people to buy into whatever function you dream up.”
State government also has benefited, pocketing $2.2 million last year in licensing fees from poker and other charitable gaming.
But all the growth has strained the ability of state regulators to keep up.
Nonprofits applying for licenses have to wait up to six weeks for processing, state officials said.
State Rep. Harold Haugh, D-Roseville, referring to the poker rooms as de-facto casinos, had proposed raising the charity’s licensing fee so the state could hire more people to handle the applications. Among those opposing the measure, which would have increased the fees from $50 a day to $250, is the Michigan agency that does the processing.
A spokeswoman for the state charitable gaming division said such a large jump would hurt the pocketbooks of nonprofits.
“We must ensure that it is worthwhile for charities to conduct events,” Andi Brancato said.
The state’s casinos, which have lost players to the charity poker rooms, said the nascent industry is regulated too lightly. They wonder who’s ensuring that the rooms keep the games honest and the players safe.
The charitable gaming division employs nine inspectors to oversee the state’s 76 charity poker rooms, Brancato said. The inspectors also are responsible for bingo, raffles and other gaming.
fdonnelly@detnews.com
(313) 223-4186
Article source: http://www.detroitnews.com/article/20120206/METRO/202060336/1409/rss36
