Palace Poker Room Shut Down for Running Illegal Pay-to-play Scheme
The Michigan Gaming Control Board (MGCB) has suspended charity gaming operations at the Burton-based Palace Poker Room alleging that the poker room has introduced an illegal pay-to-play scheme, which has diverted over $100k from charitable institutions.
An MGCB release says: “Beginning in August 2013, regulation officers from the MGCB responded to complaints of ‘suspicious gaming activities’ and reports of charities being required to unlawfully divert their proceeds to agents or employees of the location in exchange for being scheduled for events at the Palace Poker Room.”
The release further states: “If charities refused to divert their profits as directed—if they refused to ‘pay to play’—they would be denied gaming events at the Palace Poker Room.”
According to the release, Palace Poker Room is one of Michigan’s biggest poker rooms, which generated over $2 million in gaming profits between 2010 and 2012. Allegedly, the employees of Palace Poker Room asked charitable organizations to divert a portion of their profits to the Renegades Travel Baseball Team, which the poker room owner owns and controls.
Regulators disconnected a phone at Palace Poker Room and seized the poker room’s domain name. However, Palace Poker Room’s Facebook page, which contains a link to a document petitioning for amendment of Michigan’s charity gambling laws, has the following update: “Just wanted to give everyone an update on our status since we were unable to open today (Tuesday). Our lawyers are working the case to get us back open in the next few days. In the meantime, the state is looking for reasons to shut us down for good, so there’s no better time than now to speak up and make your voice heard. Please take a minute to sign the petition to tell these government officials to take a chill pill!”
According to the MGCB, the poker room had been running the pay-to-play scheme over the past several years, thus violating the state’s Bingo Act and many other criminal laws.
The board also says that any charity poker room agent or employee who completes charity financial statements or gaming records; falsifies records; or counts, handles, distributes, sells, and redeems chips during charity events in the absence of the charity will get a six-month prison term and/or a fine of up to $1000.
The MGCB also holds the charities involved in Palace Poker Room’s pay-to-play scheme as responsible for the violation of laws. Stating that charities are responsible for ensuring that no violation of law takes place, the MGCB accuses charities such as St. Francis Xavier Men’s Club, Lapeer West Softball Club, Lapeer Soccer Club, and Lapeer West Boys Basketball, to mention just a few, of violating the state’s charity gaming laws as much as Palace Poker Room did.
In 2010, the state’s gaming regulators suspended operations at a poker room on Bristol Road for similar reasons. Operations at the Flint-based Pocket Aces Poker Room were suspended on Oct 22 because the poker room was found to have violated certain gaming laws. The MGCB is currently investigating all these cases.
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