Senate beefs up charitable poker rules

At literally the 11th hour, the Senate last week passed a bill that would seriously regulate for the first time “charitable” games of chance, like Texas Hold’em poker tournaments.

The state will be cashing in on an industry that’s estimated at some $50 million to $100 million in New Hampshire, according to Sen. Bob Odell, R-Lempster, who chairs the Senate Ways and Means Committee. Under the measure, the state would receive 1.25 percent of the action, charities would be guaranteed about 8.75 percent. The rest would go to the winners and those running the games.

“They don’t get any money on it?” asked Sen. Jack Barnes, R-Raymond, who voted against the bill, with a tinge of sarcasm. “I think that the nice track gives so much to charity. They deserve a lot of credit for doing that.”

“I didn’t say there is no profit,” said Odell. “These are profit-making businesses.”

How much profit tracks and other game operators make, Odell would not venture to say. Under current regulations, charities are supposed to get 35 percent after profits, but it is unclear what percentage they actually receive because in the murky world of this exploding industry, fees, expenses and profits often are mixed up. And The Charitable Trust Division of the state attorney general’s office, doesn’t have the staff or the power to enforce rules governing the games – that was supposed to be done by local police, who were ill-equipped to deal with them. Sometimes charties received thousands of dollars from a single game. Other times, they received less than $40.

House Bill 229 is the first major legislative response to this new industry. The House passed a bill that would leave things as they are, for the most part. The biggest change would have the NH Pari-Mutuel Commission – which just put bingo and Lucky 7 games under its gambling umbrella.

But the Senate — at 11 p.m. June 7 — the deadline for acting on bills — amended the measure to substantially regulate the industry.

For straight poker, when players buy chips and gamble as in any casino, the 35 percent limit remains – but only of the take, or house winnings — though the minimum bet has gone up from $2 to $5.

The Senate bill also forbids that the charity use that money for “expenses” for the event, a common way to cut the size of the take. It also gives the state 5 percent of the take.

But much of the money these days is made in tournaments, in which players pay hundreds of dollars to get a shot at a huge pot. Promoters say that this doesn’t violate the bet limit because the chips have no monetary value. They maintain it is more akin to betting on when the ice breaks on Lake Winnipesaukee (an annual competition that, incidentally, is exempted from the regulations.) Under these tournaments, charities would get 6 percent of the first $25,000 of all funds collected from players — not just on the house winnings — and 8.75 percent of all funds exceeding $25,000. The state would get 1.25 percent of the entire take.

“Why not 5 percent?” asked Barnes. “These places are jam-packed.”

Sen. Lou D’Allesandro, D-Manchster said that after input from charities and the game operators, this amount was “acceptable.”

“It’s something that we can bump up if we need some money then,” said Barnes.

The bill also increases the bonding requirements fivefold, to $100,000, and expands the definition of a charity to include social organizations and business leagues. It also allows charities to add five more games to the 10-game limit so that they can increase their take to $50,000.

Odell estimated that the state would get some $500,000 to $1 million in revenue, because he estimated that some $50 million to $100 million is now being spent on such tournaments. “But it is such a new industry, it’s hard to say. We know that it’s large and growing,” he said.

As for how much the track and other operators make off of it, Odell wouldn’t guess. Charities at Rockingham Park in Salem alone made $2 million when they were getting 35 percent of house winnings, Odell said. Presumably, the track would have taken in almost twice as much, but how much of that is profit?

“I’m not going to speculate,” Odell said. “If this was a public utility, it would be different, but we don’t have the right to know and they don’t have the obligation to tell how much money they make.”

The House now has to agree to the Senate amendment, or more likely, set up a committee of conference and see if a compromise can be worked out. – BOB SANDERS