Charitable Gaming Division

Transcription

1 Charitable Gaming Division Texas Hold em Experience Charitable Gaming History Charitable Gaming was created when the Traxler-McCauley-Law-Bowman Bingo Act, PA 382 of 1972 was signed into law. (Bingo Act) The Bingo Act allows for licensing and regulation of bingo, raffles, charity game tickets, and millionaire parties.

2 Mission Statement Provide services to the general public in a professional, positive, and efficient manner. Ensure that only organizations that qualify in accordance with the statute receive licenses. Ensure that licensed gaming events are conducted in a fair and honest manner. Ensure that funds received from the general public through licensed gaming events are accounted for and used for the lawful purposes of the organization. Charitable Gaming History 70 s and 80 s, Bingo and Millionaire parties were the bulk of non profit fundraising. Bingo s and Millionaire Parties died in the 1990 s Non profits then looked for other avenues of fundraising

3 Charitable Gaming History Charitable Gaming recognized that charitable organizations needed a kick start in generating revenue for their lawful purpose. New card games were authorized for play: Let it Ride Tournament Texas Hold'em Fixed Limit Texas Hold'em Seven Card Stud Omaha Hi Lo Blackjack Texas Hold em became the most popular and successful program to date. Texas Hold em Revenue increased by almost $20 million from FY 2009 to FY Texas Hold em Poker is still the main draw for players. As long as the popularity for Texas Hold em continues, Millionaire Parties should be a lucrative fundraiser for charities.

4 Millionaire Party Game Revenue Previous Game Revenue in Millions $ $ $ $ $ $ $ $185

5 Growth in Millionaire Parties In 2004, 681 licenses were issued, by the end of 2010 we were up to 8,386 with no additional staff to assist in regulating. $185,261,723 Revenue $147,845,709 Prizes $18,439,146 Expenses $18,976,868 Profit Non Profits Types That Are Eligible There are nine types of organizations that have the potential to be qualified: Educational Educational Subordinate Fraternal Local Civic Religious Religious Subordinate Senior Citizens Service Veterans Example: Lions clubs qualify under Service Organization

6 Qualification Example/Service Organization If the organization has never submitted qualifying information as a service organization, the following information shall be submitted in the name of the organization prior to being approved to conduct a bingo, millionaire party, raffle, or charity game. A previously qualified organization may be required to submit updated qualification information to assure its continued eligibility under the act. 1. A signed and dated copy of the organization s current bylaws or constitution, including membership criteria. 2. A complete copy of the organization s Articles of Incorporation that have been filed with the Corporations and Securities Bureau, if the organization is incorporated. 3. A provision in the bylaws, constitution, or Articles of Incorporation that all assets, and real and personal property will revert to the local government or another nonprofit organization should the organization dissolve. 4. A copy of the letter from the IRS stating the organization is exempt from federal tax under IRS code 501(c), OR, copies of one bank statement per year for the previous five years, excluding the current year. 5. A copy of the charter or a directory published by the state or national organization that lists the organization. 6. A copy of the state or national bylaws may need to be submitted. The state or national bylaws shall provide for all requirements pursuant to R (4). Qualification Requirements (1) Each applicant applying for a gaming license who has not previously qualified shall first submit qualification information as required by the bureau. (2) Except as provided in the act, each applicant shall provide proof that its bylaws, constitution, articles of incorporation, or the bylaws or constitution of its parent organization include a statement of dissolution. The statement of dissolution shall state that all assets of the qualifying organization remaining upon dissolution, after satisfying its debts, be distributed to the local government or another nonprofit organization. (3) The bureau, at its discretion, may require a previously qualified organization to submit updated qualification information to assure the organization s continued eligibility under the act. (4) In addition to the requirements of the act, the commissioner shall consider certain factors when determining if an applicant or licensee qualifies as a branch, lodge, or chapter.

7 Qualification Requirements Cont. These include, but are not limited to, the following: (a) Charter or similar document issued by the national or state organization upon acceptance as a branch, lodge, or chapter. (b) Conditions established by the national or state organization for the revocation or suspension of the charter or relationship. (c) Dues or financial support submitted to the national or state organization by the branch, lodge, or chapter. (d) Degree of control exerted by the national or state organization over the activities of the branch, lodge, or chapter. (e) Oversight and control provided by the national or state organization over the financial affairs of the branch, lodge, or chapter, including the audit of financial records of the branch, lodge, or chapter. (f) Standard bylaws adopted by the branch, lodge, or chapter or bylaws submitted to the national or state organization for approval. (g) Appointed or elected officers of the branch, lodge, or chapter who are responsible for the activities of the branch, lodge, or chapter. (h) Ability of the branch, lodge, or chapter to influence activities (normally demonstrated by voting privileges) at the state or national level. Gaming License Applications (1) A qualified organization, unless ineligible under the act, shall be eligible to apply for a gaming license. (2) A qualified organization shall submit an application for a gaming license on a form provided by or approved in writing by the bureau. (3) In addition to the gaming license application, the applicant shall submit additional information as directed by the bureau. (4) The gaming license application shall be accompanied by the appropriate fee. (5) If a gaming license application is cancelled or denied, then the bureau may retain a portion of the original statutory fee submitted to cover processing costs. (6) An applicant shall disclose to the bureau whether any individual, officer, or agent of the applicant has ever been convicted or becomes convicted of, or forfeited bond upon a charge of, or pled guilty to any of the following offenses: (a) A felony. (b) A gambling offense. (c) Criminal fraud. (d) Forgery. (e) Larceny. (f) Filing a false report with a governmental agency. (7) Any changes to the information provided on or attached to the gaming license application shall be immediately reported to the bureau in writing.

8 Additional Eligibility Factors In addition to the requirements of the act, the commissioner shall consider the following factors when reviewing a gaming license application or renewal application: (a) The honesty and integrity of the applicant. (b) The veracity and accuracy of any information supplied to the bureau by the applicant. (c) The applicant s indebtedness to local, state, or federal government. (d) A pending lawsuit or bankruptcy proceeding involving the applicant. (e) The applicant s current or past history of compliance with the act, these rules, terms of probation, directives of the bureau, public policy of the state of Michigan, or any other local, state, or federal law or regulation. (f) Criminal convictions of the applicant or any individual, officer, or agent of the applicant for any of the following offenses: (i) A violation of the act. (ii) A felony. (iii) A gambling offense. (iv) Criminal fraud. (v) Forgery. (vi) Larceny. (vii) Filing a false report with a governmental agency. (g) Any other information considered advisable by the commissioner. Millionaire Party License A qualified organization may receive 4 millionaire party licenses per year Each license can be up to 4 consecutive days The fee is $50 for each day of the millionaire party

9 Management Only the Charity can manage the event Cash Chips Game Records The payment of expenses incurred in connection with the conduct of the licensed gaming event shall be necessary and reasonable, but shall not exceed 50% of the gross profit. This amount does not include the license fee. Provide equipment Location Technical Advise Training Operation

10 All License Records 3 years + current year A copy of the current license and application All game (event) records Worker Service Record Receipts, invoices and validated deposit slips Cancelled checks and bank Statements Financial Statement House rules The Bureau Must Ensure Fairness Arbitrary or capricious decisions cannot be made Inspectors are required to do their due diligence in investigating and reporting Ensure lawful reasons for denying a charity event license at unsuitable locations

11 Why a Moratorium on New Locations Lack of staff to properly regulate To protect the welfare of the public Unable to effectively investigate complaints to ensure properly, efficiently, and timely investigations Bingo, Charity Game Ticket, Raffle inspections are suffering all attention on Texas Hold em Public Perception Reoccurring Problems Millionaire Party locations are not required to be licensed limiting Charitable Gaming authority and difficult to regulate Playing without license Advertising violations Exceeding the $15, limit Locations handling cash, chips and game records Embezzlement from charities Locations inappropriately training organizations Completing accountability forms accurately, balancing paperwork

12 Proposed Improvements Partner with other agencies, i.e. State Police, Liquor Control Commission, our own Lottery Possible Legislative Changes: a) Imposing Fines Inspectors issue citations on site b) Fee Increases c) License Locations d) Limit Number of Licensees per day e) Increase $15,000 daily chip allowance f) Background Checks on location owners and dealers-would include Financial-Credit Check (looking for debt to state and local government), Criminal Check, Owners of Propertylease holder, share holder g) Tier system for licenses h) Prohibit use of the word Casino in Location Title Reasons to Continue Texas Hold em Generates more revenue for charitable organizations Increases revenue for State of Michigan s general fund Provides an additional gaming option to existing and new players Replacement to sluggish Bingo Game fundraising Affordable Entertainment Allows for small business

13 Charitable Gaming Website Any questions, please feel free to contact us or check our website at: Lansing office