HomePublicationsNewsletter ArchiveVolume 19Issue 29MGCB Suspends Charitable Gaming Activities of Flint Establishment Due to Allegations of Illegal Gambling and Diversion of Charitable Funds

On October 22, 2013, the Michigan Gaming Control Board (“MGCB”) released a statement regarding the suspension of charitable poker and gaming activities at “Pocket Aces Poker Room” located inside Foutch’s Pub and Grill in Flint Township. The investigation involves allegations by the MGCB and the State Attorney General’s office surrounding alleged illegal gambling and fraudulent activities involving licensed charities and the location.

According to the statement, the owner and agents of “Poker Aces Poker Room” allegedly created a scheme that involved having multiple charitable organizations apply for a millionaire party license and then forwarding the license to the owner or agents of the location. Employees of the location would then independently staff the event without any members of the charity present, as is required under the Traxler-McCauley-Law-Bowman Bingo Act (“Act”), which governs charitable gaming activity in the state. The location would then conduct gaming operations using the charities’ licenses, returning only a portion of the proceeds to the charity.

The MGCB news release states that this is the fifteenth poker room where either the MGCB or agents from the Michigan Lottery have issued enforcement actions and required a location to cease operations of charity gaming activity.

Notably, MGCB Executive Director Richard Kalm submitted proposed rules regulating millionaire party activity to the Michigan Department of Licensing and Regulatory Affairs on September 18, 2013. In the regulatory impact statement submitted along with the proposed rules, the MGCB noted that “[o]ver 1,200 on-site and post-event inspections of qualified organizations have been conducted since October 2012. These investigations have uncovered hundreds of violations of the [Act], its rules, or other state laws.”

According to the impact statement, the proposed rules seek to create changes to reduce the occurrences of such activities, to increase the clarity of charitable gaming requirements, and to allow for increased efficiency in regulations. In order to become effective, the proposed rules must comply with state law procedures, including time for public comment and state review of the rule language.

 

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