The Michigan Charitable Gaming Association (MCGA) has updated their Advocacy section of their website with the following:

MiCGA has been invited to participate in discussions with Governor Snyder’s Office concerning new fees and/or taxes that the Governor has proposed imposing on the charitable gaming community.  The Governor’s Office has attempted to justify the increased fees or new tax on two grounds: first, to cover the cost of regulating the activity; second, to make up for what they perceive as a tax revenue shortfall from Michigan’s three casinos as a result of charitable gaming; in other words, the claim is that people are attending charity events rather than visiting the Detroit casinos, which pay a tax to the state.

I understand the need to cover the cost of regulating the rooms and charities.  It has been proven over and over (Shark’s Club, Card Sharks, Snookers) that they are in need of being inspected on a regular basis to ensure everyone is working within the laws.  The second part “..to make up for what they perceive as a tax revenue shortfall from Michigan’s three casinos as a result of charitable gaming;” that is laughable.

The latest Annual Report that I was able to locate is from 2011 shows the Net Profit from Millionaire Parts of $19,223,428 and expenses of $17,901,374 for a total gross revenue of $37,124,802 for the year.  Compare these totals with $1.42 billion from the 3 casinos in Detroit reported in 2011 according to this crainsdetroit.com article.  If my math is correct, Millionaire Parties account for 1.03% of the total gross revenue in 2011.

The casinos paid $115.4 million is taxes in 2011 according to the MGCB meeting minutes in February 2012.  If we assume that all the players that go to charity rooms would have spent that money at the casinos, the state would have lost $1.18 million in taxes.  There were 7894 licenses approved in 2011 at $200 (for 4 days) per license which is about $1.57 million in fees.  Sounds like the Millionaire Parties are paying their fair share to me.

Rumor has it that the MGCB and Snyder are looking to hit the charities and suppliers with a tax from 10-12%.  If we go with the lower number, they want another $3.7 million in taxes.  Charities would pay about half of it which is $1.85 million plus the $1.57 million from fees for a grand total of $3.42 million.

I know the suppliers/rooms have other expenses, but the suppliers pay $300 per year in licensing fees.  According to statements made by Executive Director Richard Kalm of the Michigan Gaming Control (MGC) at the MGCB meeting yesterday, they have 56 suppliers that they oversee. The state is receiving a grand total of $16,800 from the suppliers.  That is 0.01% less than the charities in fees.

If Governor Snyder wants money to cover the cost of oversight, maybe they should think about whys to remove to moratorium and adjust the fees on the supplier side based on the number of charities they wish to run.  If they want to run 12 charities a day, they should pay 12 times what a single charity poker room pays since it takes more work to regulate them.  Either way, I would love to see a plan from Governor Snyder and the MGC on how to accomplish their goals.