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    "Pay-to-Play" Scheme Uncovered at Palace Poker Room, Burton, MI - Over $100K Diverted - All Charity Poker Games Suspended

      

    FOR IMMEDIATE RELEASE: October 30, 2013

     

     Location: Cadillace Place, 3062 W. Grand Blvd, L-700, Detroit 
     Contact:  Information Officer MGCB - (313) 456-4178
     
    Time: 1:00 p.m.
     
    "Pay-to-Play" Scheme Uncovered at Palace Poker Room, Burton, MI - Over $100K Diverted - All Charity Poker Games Suspended

    The Michigan Gaming Control Board (MGCB) has suspended all charitable poker and gaming at Gloria’s Poker Palace d/b/a the “Palace Poker Room”located at 1110 E. Bristol Road, Burton, Michigan. This marks the 16th “poker room” banned by the State since 2010. The emergency suspension centers on a joint investigation by the MGCB and the Michigan Attorney General’s Office involving suspected illegal gambling and fraudulent activities involving the poker room owner/agents and licensed charities.

    The investigation has preliminarily revealed many material violations of Michigan’s Bingo Act, which authorizes charitable poker events and possibly other criminal laws. This prompted an emergency summary suspension of all licensed charity events at this location in order to protect the welfare and integrity of charitable gaming. The licensed charity groups scheduled to hold future events at this location are being redirected to other venues.

    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. 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. Palace Poker Room is one of Michigan’s top-grossing poker rooms, with over $2 million in reported gambling profits from 2010-2012.

    The preliminary investigation has revealed multiple cases where charities were instructed by Palace Poker Room employees or agents to unlawfully divert up to half of their gaming profits to a checking account of an organization known as “Renegades Travel Baseball.” Renegade’s checking account was controlled by an owner/agent of Palace Poker Room. Renegades is not a charity allowed to conduct charitable gaming.

    This “Pay-to-Play” scheme was conducted over several years and involved multiple charities. This is in direct violation of the Bingo Act and possibly other criminal laws. Investigators have confirmed to date charities unlawfully diverted over $100,000. And the amount is anticipated to grow as the investigation continues. Further, additional unlicensed organizations representing themselves as charities appear to have received diverted charity profits.

    The investigation also revealed Palace Poker Room employees or agents violated numerous other provisions of the law, including managing the charity event without the charity or chairperson being present and completing and/or falsifying charity gaming and financial records.

    The state previously banned all gaming at Palace Poker Room for similar illegal and fraudulent activity in 2010. Palace Poker Room was temporarily closed July 1, 2009 when a lone masked gunman shot his way into the building with a shotgun in the second armed robbery attempt in two weeks. The gunman was fatally shot by a retired police officer who was participating in the charity poker event.

    MGCB Executive Director stated, “I am not surprised. We have uncovered illegal conduct at these games many times.” “This is why we have proposed a rules package to better regulate these events.” “The emergency suspension of all charity events at this location is required while we continue our investigation of the location employees/agents, and the charities that participated, and determine the extent of the violations and fraudulent activity.”

    Kalm will be testifying before the Michigan Legislature’s Joint Committee on Administrative Rules tomorrow at 2:00 pm.

    Michigan citizens are encouraged to report any suspicious or illegal gambling to the Michigan Gaming Control Board by calling their 24-hour anonymous tip line at 888-314-2682. To contact the Attorneys General’s Alcohol & Gambling Enforcement Division, please call 517-241-0210.

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