Michigan Charity Poker Tournaments Under Fire

August 3rd, 2014 | by Greg Shaun

Aces Gaming is just the latest company to find itself in trouble with the Massachusetts Gaming Control Board for helping to stage charity poker tournaments.

Aces Gaming has had its license suspended by the Michigan Gaming Control Board following allegations that their poker events may have defrauded the very charities they were supposed to benefit. (Image: redwings.nhl.com)

There’s a charity poker war going on Michigan. Aces Gaming, the largest supplier of poker equipment to charity the state’s poker tournaments, is the latest company to have its license suspended under a state gaming regulation that has positioned the charity poker stakeholders and the Michigan Gaming Control Board at loggerheads.

While the Control Board is intent on rooting out the potential for profiteering from charity poker tournaments, the commercial equipment suppliers, venues, and the charities themselves claim persecution, and say their abilities to fundraise for good causes are being severely restricted.

At the center of the argument is the nature of the relationship between suppliers and venues. Under Michigan gaming law, a charity is permitted to hire a venue and a supplier to help it stage poker games, but venue and supplier must never enter into agreements themselves. This, according to Rick Kalm, executive director of the state’s Gaming Control Board, is to prevent “the illegal diversion of funds, fraud, falsifying state records and other criminal acts.”

Aces Above Board?

All very laudable, but suppliers and venues argue that this is simply not practical, and that agreements need to be drawn up to allow them to decide logistics, organize the tournament efficiently and agree revenue share, which they say is always within the 50 percent, in line with state law.

Lansing-based Aces Gaming had its license suspended for 30 days this week. The company is accused of paying $1 million in profits from charity poker tournaments back to two venues, Northville Downs race track and Trippers Bar in Lansing, at which it helped organize charity games between 2008 and 2012. It also paid $516,000 to Doug Cruce, a state senator during the eighties and early nineties, who is the founder of the Michigan Charitable Gaming Association, which represents charities, gaming suppliers and poker room owners.

While Aces co-owner Heather Schuchaskie admits that the payments do contravene gaming law, she maintains that it was down to a lack of clarification from the Control Board and that the accounts were filed honestly. The payments to Doug Cruce, she said, were for contractual work he did for the company as an operations manager.

Defrauding Charities Under Microscope

“If there was something wrong with these agreements that could have been and should have been addressed long ago, since they’ve been on file with the state from the very beginning,” Schuchaskie said. “The Gaming Control Board is making it sound like we defrauded charities, and we didn’t. I can accept their decision that we were in violation of the Bingo Act, but I looked for feedback on this long ago, and had no reason to believe we were doing anything wrong. All of this was on file (with the state), it wasn’t a hidden thing.”

Aces isn’t the first company to fall foul of the regulation, and this has prompted a coalition of charities, suppliers and venues to file a motion of complaint that current law stymies fundraising activities and severely harms small businesses that are attempting to help charities organize events.

“This is by and large a harmless operation that does have some weak spots that could be dealt with and fixed if they wanted it to continue,” said Cruce.”But it is apparent this governor and his staff don’t want it to continue and the question is why?”