Michigan Court of Claims Judge Pat Donofrio recently issued a permanent injunction against enforcing the Michigan Gaming Control Board’s May 14 order that charitable gambling operators said would cost them millions of dollars in revenue. The board said the rules would have made sure gambling operators did not exploit charities for their own profit.
Jean Kordenbrock, manager of the Michigan Charitable Gaming Association, which led the suit, said, “This is a significant win for our charities. Judge Donofrio has granted the plaintiffs’ motion and permanently enjoined all of the rules that were promulgated last year.” The court decision leaves in place emergency rules that took effect July 2 and will remain in for six months. Governor Rick Snyder can renew them for six more months, Kordenbrock said, “but eventually, new rules would have to be promulgated.” She said she hopes the Michigan legislature addresses the issue in September and that “they do the right thing and help us work out something that will stop this nonsense.”
Michigan charitable gambling increased from $7.9 million in 2002 to a peak of $197 million in 2011. Responding to complaints that gambling groups running the events were treating charities unfairly, state gambling regulators issued new rules that poker rooms hosting the so-called “millionaire parties” could operate just 208 days a year and host no more than two parties per location in a day.
In addition, the operators’ cut of the profits would be limited to 45 percent, which would have given the charities a large cut of the proceeds, but the number of events would have been restricted. Charities received 81 percent of the proceeds a decade ago, but now receive half under profit-sharing agreements never envisioned when the games were authorized in a 1976 update of the Bingo Act, regulators said.
