Last night, Channel 7 News ran a story about Snookers’ Poker Room in Utica. You can watch the report here. You can also find the Macomb Daily report here. I encourage you to watch/read them before continuing. It’s OK, I’ll wait for you.
In this report, there is a document obtained from the Michigan Gaming Control Board (MGCB) about the investigation into alleged violations at Snookers. The document includes a history of violations from 2 previous investigations. The latest investigation seems to be more of the same. Snookers’ owner and an employee told the investigators that they “routinely alter the game records” to make it look like they did not sell more than the $15,000 chip limit required by law. The MGCB investigators have also added that Snookers’ employees were “counting, handling, selling, or redeeming chips” and “receiving, handling, and counting cash”. These are the reasons why new licenses are not being issued to charities.
While this is against the law and may result in the closure of the room, I want to clear up some misconceptions that I have heard around town and on the 2+2 forums where people seem to think that Snookers was somehow stealing money and/or not reporting it. I have been the Millionaire Party Chairman for many events at different poker rooms around SE Michigan over the last 3 years and I have watched how the charities handle the chips, money and rake at Snookers. The biggest part of the process involves the ‘rake’. This determines how much the charity and room makes. They split the rake 50/50 and the room/supplier pays all the rest of the expenses.
As long as the charity handles this process, there is no way to steal from the charity. The room’s floor manager will count the rake along with the charity. The charity records the rake on their records and the room records it on theirs to keep the charity honest as well. The rest of the paperwork involves keeping track of the chip sales and chip redemptions and balancing those numbers with the rake total. This is where someone could “cook the books” which would make it look like they did not sell more than the $15,000 in chips.
The other information regarding paying unreasonable expenses, diverting millionaire party proceeds for prohibited or unlawful purposes, and anything related to records/games were violations involving the charities themselves which it looks like 25 were sited over the last couple of years. The charities have the possibility of losing their ability to get license approved in the future for their violations as well.
New 3 Charity Directive
On the channel 7 news report above, they mentioned that the Snookers closing has resulted in tighter regulations from the MGCB. The rumour is that they are limiting the number of charities that will be licensed at 3 at a time.
When my charity applied for licenses in the past, we would just specify we were operating from noon-2am or 9am-2am on the application for the license. The rooms were rarely open during these times but it covered us for the day. This will work fine for small rooms that never need more than 3 charities but a room like Electric Stick (ES) in Westland which runs the largest tournaments in the state will have serious logistic issue coordinating the times.
If a room needed to run say 6 charities, the charities would need to specify exactly what time they will run the event. If the 1st charity said they were running from 10am-2pm that would be the only times they could operate. If the game didn’t get going until noon for some reason and the charity only sold $3000 in chips and made $250 in rake, they would have to shut down right at 2pm resulting is way less money than expected for the charities. This would require chip changes and shutting down of the current cash game while they covert it to the next charity.
If the times people show up for cash games fluctuated, which is does in this business, you couldn’t possibly handle the logistics of scheduling the charities correctly. I think this will lead to offering way more charities than what would normally be needed to operate to make sure the games are always available. If ES wanted to run the Iron Man Tournament, which runs close to 10 hours, 1 license would be required to cover that entire times. That would leave 2 other licenses that can be used for cash games.
So what was the MGCB thinking making this directive? I have no freaking clue. Governor Snyder transferred control to the MGCB because they were better suited to handle the regulation. This just proves they are failing to handle it right now while making fund-raising for charities more difficult. Right now, the changes will affect the charities in larger rooms but won’t affect the rooms much. I’m starting to believe they need to hire some people who have a clue about the entire process that can help come up with solutions that the charities, room owners and MGCB can all benefit.