Legal cardroom in New York? (1 Viewer)

[Taghkanic]

A few years ago while I was playing in a social hall tourney in the Hudson Valley, a player told me he had a legal poker “club,” operating out in the open in a commercial space, and invited me to play.

I never went, as it was too far of a drive for me. But I asked several other regs from the social hall game, and they confirmed that it not only existed as described, but also that they had played there a lot.

As a home game host, this piqued my interest... How could there be a legal poker club in New York? Could I do this, too?

To be honest I kind of forgot about it, as it seemed so improbable. But just recently someone from another weekly game mentioned that she had played at a “legal poker club.” It sounded like the same place, though she said that the operator of the club had recently sold it, and the club had moved to a new location.

This time I decided to try to figure out how it was possible to have a legal poker club in my state, or if the claim was just imaginary.

Well, I went to the NYS Corporations site, and paid a small fee to obtain the original incorporation papers for the club. And it does seem to have been incorporated explicitly as a poker club. And to have operated now for over 15 years.

Obviously it would be great for many of us if cardrooms were legal in more states. I just don’t know how this one got through in New York.

I’ll post screenshots in comments in comments in a moment, with names and other key identifiers redacted (since I am not trying to get anyone in trouble, if this has slipped through due to some massive oversight by the State).

 

[Taghkanic]

 

[Taghkanic]

 

[Taghkanic]

 

[Taghkanic]

So, to reiterate:

This not-for-profit corporation filed papers with New York State to establish itself, explicitly saying that they are going to hold poker games (plus adding some veneer of educational functions). The club has been running for years. So either those reviewing their paperwork paid no attention, or no one cares to enforce State laws about gambling establishments... Or, these geniuses found a loophole and the State just hoped no one else would duplicate their effort?

IDGI.

I know there are some lawyers (cough, @gopherblue , cough) on this site... I’m especially interested in their takes on this.

 

[Taghkanic]

And just to thicken the plot even more... I also (from the person in the recent cash game) the name of the company which apparently the “legal poker club.” (I don’t know how you buy a not-for-profit corporation.) Here are their incorporation papers, again with identfiers redacted.

This, by contrast, appears to be a for-profit business, created within the last two years.

And again... IDGI. But I want it all to be legit!

 

[Taghkanic]

p. 2:

 

[Taghkanic]

Note: The second incorporation does not mention poker in its boilerplate filing, but poker is mentioned in the business name.

 

[dmoney]

I went to college in Rochester, NY, and while I was a sophomore and junior our poker crew (incl @SJFCPK18) caught wind of this club right around the corner. The owner had supposedly worked hand-in-hand with officials to get everything set up properly and had assurances that he was good to operate legally. Among other things, I think you paid a "membership fee" either on a daily basis or hourly at the table, so the games themselves weren't raked.

It ran for a while but eventually got raided by authorities with guns drawn, players handcuffed, assets seized, and the owner in a heap of legal and financial trouble. "It was difficult for a while, but everything has worked out okay," he told me. He was selling off all the chips and game accessories in April of 2018 when I bought a sample set of cash chips and a playable set of tourney chips, the latter of which I no longer have.

All that said, I wouldn't be shocked to learn of other similar clubs, operating quietly without disturbing the locals. I'm following this thread to see what you learn.

 

[dmoney]

View attachment 1250656

I think I spotted a ... problem? solution? loophole?

 

[Taghkanic]

Interesting. This club (which has a website and a Facebook page) charges a $25 annual membership fee. But they also allow members to bring “guests” who only pay a $5 guest fee. So those costs are pretty trivial.

I don’t know if they rake, but I can’t imagine them keeping the lights on without some other revenue stream.

My assumption is that the operator(s) must have some wink-and-a-nod agreement with local authorities. That still doesn’t explain to me why the state approved their nonprofit incorporation, but maybe they accept all filings and let law-enforcement deal with the consequences?

 

[Taghkanic]

I think I spotted a ... problem? solution? loophole?

View attachment 1250674

The world‘s oldest source of revenue

 

[buzzmonkey]

Interesting. This club (which has a website and a Facebook page) charges a $25 annual membership fee. But they also allow members to bring “guests” who only pay a $5 guest fee. So those costs are pretty trivial.

I don’t know if they rake, but I can’t imagine them keeping the lights on without some other revenue stream.

My assumption is that the operator(s) must have some wink-and-a-nod agreement with local authorities. That still doesn’t explain to me why the state approved their nonprofit incorporation, but maybe they accept all filings and let law-enforcement deal with the consequences?

My guess is that they accept tipping and the house probably keeps a cut of the dealer's tips?

 

[Taghkanic]

I’ve played in one game in a nearby, but different New York State county, where the player pool included the district attorney and a high-ranking police officer… So there was essentially zero chance of the game getting raided.

In my own game, I used to have a local judge who was super regular. (He’s in his late 80s now and stopped playing, much to my chagrin.)

Point being that there are often situations where games which operate even out in the open are protected.

But as @dmoney pounted out, things can change and even “safe” games can become the target of law enforcement.

 

[dmoney]

things can change and even “safe” games can become the target of law enforcement.

A phrase comes to mind: Rules are about enforcement.

The gap between stated policy and actual practice gets exploited all the time, in a whole bunch of areas of life.

Meaning a game could be illegal or in a gray area, but not until those rules are enforced. There are probably WAY more "gray area" raked/for profit/underground games that are known or suspected by local officials, but go unbothered because they don't cause a problem...just folks playing cards sorta deal. But if noise complaints, drugs, financial disputes, annoyed neighbors, and shady characters start to become prevalent, enforcement becomes a priority.

 

[Taghkanic]

All true.

My main curiosity remains centered on the question of how a social/membership club was able to be incorporated in my State for purposes which plainly included poker games.

The incorporator(s) appear to have tried to dress this up as a social benefit organization, hosting games only incidentally to their claimed “mission” to inform people about poker, while promoting social activities.

Typically such groups serve more traditional educational purposes, and/or perform actual charitable activities—such as raising money for a firehouse, war veterans, sick or disadvantaged children, college scholarships, etc.

One thing I haven’t looked into is whether the group attempted to get a corresponding IRS approval. Those two things usually go hand-in-hand; I don’t think you can retain nonprofit status in New York without an EIN from the IRS validating you as a not for profit. I incorporated a 501(c)(3) organization about 20 years ago, and had to do both.

But again… Not a lawyer. Just someone who would open a “legal poker club” if these are indeed legal…

 

[dmoney]

Just someone who would open a “legal poker club” if these are indeed legal

I would also imagine that one’s proximity to a real casino could be a significant factor. The casinos are protective of their territories, and I would expect them to exert pressure (through gaming commissions, local law enforcement and police) if they found a gray-area operator undercutting profit margins on “their” turf.

 

[Taghkanic]

I would also imagine that one’s proximity to a real casino could be a significant factor. The casinos are protective of their territories, and I would expect them to exert pressure (through gaming commissions, local law enforcement and police) if they found a gray-area operator undercutting profit margins on “their” turf.

This is fairly close to a casino now, but the casino only arrived about 10-12 years after the club was set up.

 

[floeICE]

I wouldn’t put too much stock in what they wrote in their articles of incorporation. If you read the articles, the club is for people who are interested in poker, but it doesn’t explicitly say they are playing poker, let alone playing with real money.

If you look at the NYS gambling law, it’s legal to gamble with others socially on an equal footing, but it is illegal to profit from, promote, or organize gambling activity as a non-player. As long as player-individuals are organizing and hosting, and not taking rake or otherwise profiting, it is ok.

In this case, if the club is hosting poker events, it’s likely in violation of the law. NY law characterizes poker as a contest of chance, and thus it falls under gambling.

 

[Taghkanic]

I’m not sure I can find a bright line distinction between the above, at least as this social club is organized and promoted.

Below is a description of the club from the website it had before the recent change in “ownership”/leadership.

I would like to think this is legal, but I suspect one could easily run afoul of the law if someone in a position of power decided to make an example of it.

 

[floeICE]

It’s likely not legal and just a matter of enforcement priorities.

In NYC, there are raked games running openly and advertising via social media. These are not legal either. But they run until they get busted.

 

[chippitydoodah]

And when it gets shut down in a month....

 

[Taghkanic]

I am now tempted to incorporate the Pierre-Simon Laplace Society, a membership organization which would promote the study and practice of modern probability theory.

The Laplace Society’s members would meet 2-4 times monthly to discuss and explore statistical concepts such as variance, equity, the law of large numbers, sample size, the gambler’s fallacy, equilibrium strategy, et al.

The Society’s research might or might not require the hosting of certain competitive games which illustrate and illuminate such concepts.

 

[allforcharity]

Not to mention additional data collection on psychological aspects of group dynamics in game theory, peer pressure, micro aggressions, addictive and hoarding behaviors, etc.

 

[dmoney]

I am now tempted to incorporate the Pierre-Simon Laplace Society, a membership organization which would promote the study and practice of modern probability theory.

The Laplace Society’s members would meet 2-4 times monthly to discuss and explore statistical concepts such as variance, equity, the law of large numbers, sample size, the gambler’s fallacy, et al.

The Society’s research might or might not require the hosting of certain competitive games which illustrate and illuminate such concepts.

This reminds me of @MegaTon44 telling his annoying neighbors that he was hosting an international delegation of rare antique collectors before his meetup.

 

[chippitydoodah]

This reminds me of @MegaTon44 telling his annoying neighbors that he was hosting an international delegation of rare antique collectors before his meetup.

When I arrived Friday, Dan was entering the house through the garage. I said, "excuse me, I'd like to talk to you about all these cars". He didn't know who I was because we never met in person but he said "yeah, what about it" and shot me a sinister "go back in your hole and mind your own goddamn business" look. I caved immediately and said "Dan, it's me, Kevin, chippitydoodah". Dan's an imposing human lol

 

[Taghkanic]

When members enter, they will receive a recent copy of the Laplace Society’s one-page newsletter, each edition detailing a statistical concept to be kept in mind while conducting the meeting’s research.

On the back side will be a hand history from the previous game meeting, illustrating the previous concept.

Who’s gonna arrest me for that? If I start explaining it to the investigating officer, he’s going to say to himself “These nerds are crazy” and just leave…

 

[allforcharity]

Who’s gonna arrest me for that? If I start explaining it to the investigating officer, he’s going to say to himself “These nerds are crazy” and just leave…

Make sure you have print copies of the latest peer-reviewed literature on statistics that you can cite. The mere presence of such artifacts is usually enough to get the eyes of 500 people in a lecture theater to glaze over, so what chance does a single investigating officer have?

 

[Taghkanic]

I found a post on another site from the operator of this club, explaining a bit more about how they do things. I’m still intrigued yet skeptical. (I’ve removed identifying names, addresses, phone numbers.)

------------------

[REDACTED] is a social club, self supported by membership fees and tournament dues. All monies taken for memberships and tournaments to pay for overhead and food, served at all events. All the money made is returned back back to the members. ​

​

We have Royal Flush Bad Beat prize pool for VIP members. Any balance remaining goes back to the members in the form of bigger jackpots, WSP satellites events, and much, much more. ​

​

… [N]o one under 18 is allowed. NO Alcohol. VIP members are required to participate in a minimum of 2 tournaments per month. ​

​

First year membership fee for VIP is $80.00. Elite members are required to participate in at least one tournament per month and pay a slightly lower yearly fee. ​

​

Currently we are on a new membership drive (Hence the ad) ​

​

[A]ny member can sponsor you. Please call me for more answers or to set up an appointment to check us out or to join or to come as a guest. ​

​

You can come as a guest and pay only $5 two times. By the third time you must become a member. ​

​

We have catered food drinks, coffee, cake, candy that you pay nothing for. This is a unique opportunity. Thanks for your interest, you won't be disappointed.​

 

[Taghkanic]

Remarkably, I found an article in a large regional newspaper about this and another such club, from 16 years ago. The operators, name and website of the club are right there in the open.

Apparently this publicity did not cause the club to be shut down.

The article also named another club, similarly organized, nearby... So apparently that county’s officials were not interested.

There is also a quote from a State official essentially washing his hands of whether this is OK. Excerpt with redactions below.
--------

Both groups seem to exploit a loophole in state and federal anti-gambling laws. The organizers don't profit and all fees go right back to the members and the club.​

​

[OPERATOR] said he received the state's last approval for such a group, though the New York Department of State couldn't confirm that.​

​

"No one wrote some sort of circular about Texas Hold 'em poker," said Eamon Moynihan, a spokesman for the New York Department of State, which approves articles of incorporation. "There's no policy that says yes or no."​

​