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Published in Nonprofits
Michigan Charitable Gaming Association Chairperson Michael Horvath (left) and state Sen. Michael MacDonald testify at a recent Senate Regulatory Reform Committee hearing. Michigan Charitable Gaming Association Chairperson Michael Horvath (left) and state Sen. Michael MacDonald testify at a recent Senate Regulatory Reform Committee hearing. COURTESY PHOTO

Bill would temporarily expand charitable gaming for nonprofits after pandemic shutdowns

BY Sunday, September 12, 2021 04:00pm

Bipartisan statewide legislation introduced earlier this summer would temporarily waive fees and expand opportunities for charitable gaming events in the wake of the COVID-19 pandemic.

Senate Bill 564 — introduced by state Sen. Michael MacDonald, R-Macomb Township — is meant to help nonprofits that lost crucial revenue from charitable gaming as in-person events were canceled or restricted over the past 18 months. The bill is co-sponsored by Republican Sens. John Bizon and Tom Barrett as well as Democratic state Sen. Jeff Irwin.

The bill would waive a $50 per day license fee for events known as “millionaire parties,” or charitable gaming events in which wagers are placed on games of chance like a casino and participants use imitation money or chips. The legislation would also allow millionaire party licensees to receive up to $30,000 instead of $20,000 in exchange for imitation money or chips. The temporary provisions would be in place until January 2024 under the proposal.

In a statement this month, MacDonald said his bill “would help many of our important charities recover and continue their great work in their respective communities. Many nonprofits, like schools, police and veteran groups, use charitable gaming to raise the resources they need to operate and serve our communities.”

Roughly 18 months into the COVID-19 pandemic, Michigan charitable organizations have reported that revenue generated from annual fundraising events is down 53 percent while individual donations are down 46 percent, according to the Michigan Nonprofit Association.

“With donations cut in half, many of Michigan’s nonprofits find themselves in dire need of financial assistance to stay afloat,” Michigan Nonprofit Association Vice President Kelly Kuhn said in an email. “What’s at stake is not only the services and supports nonprofits provide to the residents in their communities, but also the jobs they create for Michiganders. Michigan’s nonprofits employ nearly 470,000 Michiganders representing just over one in every 10 Michigan jobs.”

Kuhn added that the association “applauds any effort to help charitable nonprofits fully recover and continue their great work in our communities.”

The bill would also increase the number of millionaire party licenses that a qualified organization could receive in a calendar year, from four to six. It also would prohibit the Michigan Gaming Control Board (MGCB) from limiting the number of days per week that a millionaire party could be held at a single location. The state’s Bingo Act currently limits events to four days a week at a single location.

MGCB concerns

According to a Senate Fiscal Agency analysis, the bill would limit revenue to the Michigan Gaming Control Board by waiving the $50-per-day license fee in calendar years 2021, 2022 and 2023. Prior to the COVID-19 pandemic, Michigan had an average of roughly 8,000 millionaire party event days annually, which generated about $400,000 in fee revenue. 

In 2020, millionaire party event days dropped significantly to 1,494, which generated $74,700 in fee revenue, according to the Senate Fiscal Agency.

“As gaming activity is expected to pick up after 2020, the number of party-event days likely will increase from 2020,” according to the analysis, which adds that potential revenue loss over the next two calendars would unlikely exceed $1 million. “The fee revenue that these parties generate does not represent a significant amount of the Michigan Gaming Control Board’s total operating budget, but the loss of fee revenue could affect some oversight of the millionaire party gaming activities.”

MGCB Spokesperson Mary Kay Bean said the agency submitted formal opposition to the bill on Sept. 1.

“We look forward to discussing the bill with the sponsor,” she said in an email to MiBiz.

Bean noted that millionaire party events resumed this summer after statewide epidemic orders were lifted. As of press time, 26 millionaire party events were scheduled in Kent County — all in the city of Grand Rapids — for the month of September. Statewide, 603 millionaire parties are scheduled in the month of September.

During an Aug. 31 Senate Regulatory Reform Committee hearing, MacDonald noted that local chapters of American Legion and Kiwanis International use charitable gaming as primary fundraising means to support philanthropic efforts.

Michael Horvath, chairperson of the Michigan Charitable Gaming Association, said the legislation is crucial for helping these local organizations rebound from statewide shutdowns that restricted charitable gaming events.

“Undoubtedly, the last year and a half has been devastating to the entire state and our charities,” Horvath testified on Aug. 31. “Notably, millionaire parties were effectively shut down from March 2020 to July 2021. That’s 16 months in which dedicated charitable organizations were unable to raise funds at a time when the community needed it the most.”

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