Fifteen poker clubs in Portland, Oregon recently received letters from the city warning them to stop using “volunteer” in-house dealers who work for tips. The former Encore Poker Club, one of the most popular in the city, shut down soon after and others are concerned about their futures. Attorney Mark Humphrey, representing the Aces Full poker club, said, “Obviously, the letter had a very profound effect because within a day Encore was closed. It’s another straw on the camel’s back.”
The clubs used unpaid dealers so they could state they provided “social gaming,” originally designed to allow a bingo night at an Elks Club, for example. The Oregon constitution bans non-tribal casinos. If the clubs paid professional dealers, they could not make the social gaming claim. So they circumvent that rule with volunteer dealers who can earn tips of $16-$18 per hour. The clubs make money with entrance fees and selling food and drinks. All gambling wagers are divided among the players, and none go to the house. At Texas Hold ’Em tournaments, players at 10 or more tables compete over several hours and can win $1,000 or more.
The letter, issued by Anne Holm, the city regulator for poker clubs, was the result of a complaint filed last year with the Oregon Bureau of Labor and Industries by Bonne Marsh, a dealer at Portland’s Ace of Spades club. She said the club owed her at least a minimum wage. In April 2015, the agency determined Ace of Spades did owe Marsh back wages plus civil penalties. Portland’s Senior Management Analyst Jen Clodius said the city is “enforcing state law based on the BOLI investigation.”
More recently, a dealer at Encore also filed a complaint. After investigating, BOLI on June 17 issued an intent to assess civil penalties of $59,000 against the now-shuttered Encore club and the affiliated King of Clubs Dealers Group, on behalf of 59 dealers. The ultimate penalty could rise much higher if the club has to pay back wages to those dealers.
BOLI spokesman Charlie Burr said state investigators determined the poker dealers work at the behest of the clubs and the clubs are not nonprofits, so they can’t use volunteer dealers. “We believe they were performing work with the employer/employee relationship and thus were subject to Oregon’s minimum wage law,” Burr said. However, Burr said a hearing on the case is set for October. Meanwhile, “There hasn’t been any new rule-making,” Burr said
Then there’s the class-action suit. Last month Portland attorney Rachel O’Neal filed a notice of intent to file a class-action lawsuit on behalf of local poker dealers, who claim they should be paid at least minimum wage. She said under Oregon law, tips do not count toward the minimum wage, but are added on top of that. “I’ve always known that the dealers weren’t volunteers, they were employees,” O’Neal said. The social gaming law means it must be a game among players only, so dealers can’t have “any association with the club,” she added.
Clubs face a dilemma since the city’s July 12 letter stated “designated dealers are not allowed” at the poker tournaments; state law prohibits dealers from being employees of the clubs, but now they can’t be volunteers. The letter suggested, “The deal must rotate among the players.” In other words, players at each table of a Texas Hold ‘Em tournament must deal cards to themselves and their competitors—like a home poker game.
Some poker room officials are concerned that could ruin the games and therefore doom the business. Ricky Lee, general manager at Ace’s Full, said poker is a “visual game;” tournament players want to focus on their opponents, not dealing. He added rotating the deals leads to more mistakes and “misdeals,” and slows down the game.
Still, at least two large poker clubs, Final Table and Portland Meadows Poker Room, continue to use in-house dealers, players said.
