Today, at our State’s Capital building, the Joint Committee of Administrative Rules (JCAR) held a meeting to get a head start on the proposed changes from the Michigan Gaming Control Board (MGCB).  While this was not normal procedure, it was JCAR’s hope that they could learn more about the proposed changes due to how quick these procedures take place.

For those that do not know what JCAR is for (like me), this is from their website:

The Joint Committee on Administrative Rules is a statutorily created bipartisan legislative committee, comprised of 5 house and 5 senate members, which is responsible for the legislative oversight of administrative rules proposed by state agencies. The committee maintains a nonpartisan staff in downtown Lansing that is responsible for processing rules transmitted to the committee by state agencies, scheduling committee hearings at the direction of the committee chair, providing members with the background and legal analysis of the rules, and reviewing proposed legislation to determine whether rulemaking authority is, or should be, necessary to carry out the legislative intent of proposed legislation.

JCAR will determine if the proposed rules are necessary to carry out the “intent” of the bingo act.  I found a couple of things very funny at this meeting today:

  1. Senators/Representatives that seemed to be for the changes were allowed to speak without interruption from Tom McMillin.
  2. Senators/Representatives that seemed to be against changes were repeatedly interrupted by Tom McMillin.
  3. Richard Kalm and associates were given an hour to tell everyone in the room how they closed 16 rooms since 2010 for various reasons related to illegal gambling and prostitution among others.
  4. By the time the public was allowed to speak, they were given a total of 15 minutes to talk before the meeting was out of time.

Dave Murley, Deputy Legal Counsel to Governor Schneider, stated that the millionaire parties have grown from the small Vegas nights held a few times per year and is now “degenerated into a racket,” which brought many boo’s from the crowd.  He went on to say that Governor Schneider wanted Richard Kalm to “either clean them up or shut them down.”    Additionally, he stated that “millions, if not 10s of millions have been funneled through illegal gaming” at these rooms.

Next up to fill the time was Don McGee of the Attorney General’s office giving a history lesson on the gaming in Michigan.  The Bingo Act and Lottery Acts were passed in 1972.  Millionaire Parties hosting Black Jack and other House games in 1976.  In 1996, Detroit’s 3 casinos were authorized and then in 1999, Progressive jackpot at bingo, $3500 max payouts from bingo and Millionaire Parties were allowed to have 4 licenses, 4 times per year totaling 16 days.  In 2004, the lottery commission released a directive allowing Texas Hold’em and 7 card stud games to be played at Millionaire Parties.

Then Richard Kalm pulls out a power point presentation to show the violations that have occurred mainly at Snooker’s Poker Room which was shut down more than 10 months ago as proof that rooms were out of control.  He stated repeated that charities were not in control of the game and room owners were taking advantage of the charities.  He also referenced the Pocket Aces which was having charities from the UP send in their license and have the room run the events and send in a portion of the proceeds back to the charity.

The MGCB paid for a Worldwide Casino Consultant George Joseph to come in and visit 6 rooms.  Two of the rooms were small, two mid-sized and two large and give them recommendations on what needs to be done to clean up the rooms.  (Waiting for a copy of the report)  The report showed issues with card control (cards left at unattended tables), chip control (chips in cabinets that were open and visible to the public), and charity workers bringing chips to the table in their hands.  Additionally, he noted issues with Black Jack and how easily it would be for the dealer and players to colluded against the charities.  He mentioned that at one room they went in, the dealer had $1500-2000 in chips in his tip cup. (Pretty sure this is what prompted the new tipping rules)

Joseph’s report recommended that uniform rules needed to be enforced for table games across the state or eliminate them completely.  He also stated that the rooms should have 24/7 surveillance cameras and security.  Only the rules of the games have been addressed in the proposed rules from the MGCB.  I know as a player and a charity, surveillance and security would go a long way to making me feel more protected at the rooms.

After over an hour of Kalm and associates telling us about the bad apples in the industry, he was asked to explain some of the changes that were proposed.  He spoke of the 5 bona-fide members rule, the 120 days per year per location that a room could operate and that he would lift the moratorium if the rules passed.  This only covered 2 rules out of the 19 pages that were proposed.  Kalm said he was giving the control of the games to the charities for the integrity of the game.  However, as he stated before, the charities and rooms were not able to run the games correctly.

Representative Geiss and Santana seemed to be against the changes and were interrupted while trying to speak by Tom McMillin.  Rep. Santana spoke of Kalm’s report to the Governor about issues at Detroit’s casino where Kalm wrote there were 82 instances of police involvement and 2 violations by the casinos in 2012.  This was in response to the 137 issues of crime at all the rooms in the state over 3 years.  He was then interrupted and was not able continue speaking.

Finally, public comment was allowed and they were given 3 minutes to speak.  There were 2 representatives that were not on JCAR allow to speak against the rules, 4 charities and 1 room owner.  After about 20 minutes total, the meeting was adjourned.

I do not see how taking the management of the rooms out of the hands of the professionals and placing it solely on the shoulders of charities that will operate 16 days per year is good for anyone.  If the MGCB required surveillance and security at the rooms, they couldn’t restrict them to 120 days per year as it would not be feasible for such a short time.  I hope to get a copy of the report that George Joseph gave to the MGCB and see if there is a way we can clean up the bad rooms and open some good ones around the state.

The charities, law-abiding room owners and the MGCB can all agree that rooms that do not follow the law and continue to run illegal gaming need to be closed.  Richard Kalm and the MGCB have the tools and rules needed to close rooms running illegally.  The proposed changes are just going too far and seem to ignore some of the recommended changes by the consultant.  The next meeting will be sometime in November as the one announced on the 7th has been canceled.  I will update everyone when I get the new date.