Late in 2012, the Michigan Gaming Control Board (MGCB) hired World Wide Casino Consultant George Joseph to evaluate 6 charity poker rooms in Michigan and report back his findings.  Joseph went to two small, two medium and two large rooms and played black jack and poker while observing how the rooms operate.  His report to the MGCB was acquired by the Michigan Charitable Gaming Association through the Freedom of Information Act.  The report is redacted to hide the names of rooms that are currently under investigation.  From the report it appears he went to the rooms December 14th and 15th of 2012.

It is clear from reading the report that the MGCB used some information from this document in making the new rules released July, 29th, 2013 but completely ignored others.  Lets take a look at a few of these:

  1. Effective September 1, 2013, no more than three (3) licensed millionaire party events will be approved at any one location per day.
  2. Effective September 1, 2013, all millionaire party events shall only be conducted between the hours of 8 a.m. and 12 a.m. (midnight).  Each licensed event must be complete (i.e. all game play ended, all chips cashed in, all prizes issued, and all game records completed and printed) by the event end time indicated on the license. Similarly, chips or imitation money must not be exchanged prior to the start time indicated on the license.
  3. Section 432.110a(d) of the Act states, “A qualified organization shall not receive more than $15,000.00 in exchange for imitation money or chips in 1 day of a millionaire party.” To ensure compliance with this law, effective September 1, 2013, the $15,000.00 maximum
    exchange limitation must be reduced by the value of the “seed” (i.e. startup bank of chips) required for house games. Upon seeding a house game, the total value of the seeded chips must be deducted from the $15,000.00 maximum exchange limit. Once a table is seeded, no chips from that table may be redeemed for the purpose of adjusting the $15,000.00 maximum exchange limitation.

All 3 of these rules were mentioned within the report.  Number 1 only effected The River in Shelby Township as far as I am aware.  They were running 5 charities at the time.  Number 3 just closes a loophole that has the potential to put more than $15,000 in chips in play.  While I do not like limiting the number of charities in a room, I do not have issues with this limit IF they were to remove the moratorium to allow more rooms in the state that would give charities more opportunities to raise money.

For number 2, this was related to some charities complaining about trying to get staffing for events to stay that late and the ability to have covert investigations by the state.  If the MGCB were worried about staffing, why would they propose having 5 members on-site at all times during the events?  Having the charities finish with paperwork by 2 AM would satisfy the ‘covert investigation’ issues so I’m not sure why Joseph proposed midnight.

Lets move on to what I found very interesting in the report and recent rules have had a significant impact on the local dealers.  From the July 29th, 2013 rules:

Effective September 1, 2013, tips may not be accepted in the form of chips. Cash tips will continue to be allowed; however, cash tips must be provided in accordance with Rule 409(11) which states, “A person employed by or an agent of a lessor, location, or licensed supplier may accept cash tips at a licensed millionaire party event.”

Here is what I found in Joseph’s report:

“..I would recommend a revision of regulation: Rule 432.21409(11) & 432.21408 to mandate tips be given in chips only and with the following conditions;

  1. Dealers are required to use a tip box.
  2. Dealers cash out their own chips at the cage.

I just do not understand how the MGCB can go from this recommendation to “no chip tips allowed.”  This rule alone has reduced tips for dealers by up to 50% in some rooms and caused many dealers to look for employment elsewhere and some room owners have had to increase the base pay of the dealers.  I guess it’s good for the charities as less money is coming off the tables from their $15,000 chip limit.

Here are the key points I received from reading this document:

  1. Rooms should be required to have surveillance at the chip cage and all tables.
  2. Rooms need to protect the poker chips used via standard chip control techniques.
  3. Rooms need to protect the playing cards used via standard card control techniques.
  4. Rules for Black Jack should be standardized throughout the state.
  5. Rooms should be ran by licensed suppliers that are trained properly in casino practices.
  6. Dealers should be properly trained as well as having background checks.

Outside of background checks for employees of suppliers and standardized rules, I do not see how the proposed rules from the state address the major problems with charity poker rooms.  The state has already proven they have the rules in place that enables them to close rooms that fail to follow the law since they have closed several rooms in the last year.  Implementing surveillance, chip and card control procedures and requiring training of the employees will go a long way toward cleaning issues at the rooms as well as protecting the charities.

While I still do not agree with closing at midnight as would as it cuts into some of the most profitable hours, I do not see anything else in here that could not be implemented in the future.  It would go a long way toward cleaning up the industry and to provide a safer place for both charities and players alike.  Feel free to comment below about the document provided.  I would really like to hear from charity room owners on how they feel about the report.