On August 22, 25 plaintiffs, led by the Michigan Charitable Gaming Association which represents nearly 300 state charities and suppliers of fundraising “millionaire parties,” filed suit to prevent the Michigan Gaming Control Board and Executive Director Rick Kalm from enforcing emergency rules. In the lawsuit, the MCGA said it considers the new rules “a naked attempt to strangle and suffocate the state’s charitable gaming industry” and a move by Governor Rick Snyder “to fundamentally undermine the way charity gaming” has been conducted in Michigan for the past 40 years. The plaintiffs include a Lions Club, the Michigan Jaycees, band boosters, animal-rescue groups, veterans’ organizations and others.
Kalm announced the emergency rules in July to address the “public safety threat generated by large-scale gambling at unlicensed poker rooms” which he compared unfavorably to state-licensed casinos, with Snyder’s agreement.
The MCGA’s lawsuit states the MGCB and Kalm created emergency rules in order to circumvent several rulings by Michigan Court of Claims Judge Pat Donofrio that ultimately threw out extensive regulations the MCGB developed over the past year to supplement the state Bingo Act of 1972. Donofrio blocked regulations that, according to the lawsuit, would have severely restricted or eliminated charity fundraising. In response, Kalm substituted emergency rules that resembled the rules Donofrio blocked, the suit alleges.
The plaintiffs argue, “Emergency Rule 1 states that the executive director (Kalm) may only authorize two ‘millionaire party’ events per location per day. Emergency Rule 2 states there shall not be more than four ‘millionaire party’ event days per location per week.” Both rules are identical to rules Donofrio blocked, according to the lawsuit.
The suit lists similarities between other emergency rules and those blocked by Donofrio, including a rule placing a daily cap of $650 or 45 percent of revenues to cover charities’ expenses in hiring suppliers and sites to host millionaire poker parties. The plaintiffs also claim the emergency rules improperly attempt to limit the number of events at host locations as well as “the right of charities, suppliers and locations to reach suitable agreements and compensation and revenues.”
In response, Kalm said the lawsuit is confusing to charities and has slowed down the licensing process. “We are trying to continue to license events regardless of the special interests who seem to be driving the litigation,” he said, adding the charities “seem to be an afterthought” of large poker rooms and their suppliers.
Speaking for the plaintiffs, Heather Schuchaskie of Aces Gaming Supply of Lansing said, “Gaming Control wants the public to think that suppliers and host locations are public enemy number one. Listen to the charities.”
