BACKGROUND
This question is a follow-up to Question ID: 538507 re the legality of
charity poker tournaments in New York City. The basic answer to that
question was that such tournaments are illegal, even for recognized
charitable organizations. The researcher focused on relevant statutes
and government determinations which supported the conclusion.
However, charities throughout New York State engage in such supposedly
illegal activities. Moreover, a number of New York City firms offer
to conduct or facilitate charitable poker tournaments for set per
person/tables fees (see Exhibit A, below, for an example of one firm?s
advertisement).
PURPOSE
I sit on the board of a recognized non-profit [501(c)(3)] entity (the
?Charity?), organized in the State of New York. The entity is an
alumni club of a private New York university. The board wants to hold
a charity poker tournament in New York City (?NYC?) and is aware that
several firms offer to conduct and/or facilitate such tournaments
(?Facilitator Firms?). However, the Charity would like to avoid the
heavy fees associated with employing Facilitator Firms and would like
to conduct a charity poker tournament itself if it could avoid any
risks, to itself, its board members and the parent university, of
civil or criminal liability.
Basically, I need to determine the feasibility of our Charity
conducting a legal charity poker tournament in NYC, where the Charity,
the university and the Charity board members would not be criminally
or civilly liable. I would like to produce a memo for the university
convincing them that either the Charity could conduct a tournament
alone or with a Facilitator Firm, and that in either case the legal
risks are low to none. I would also need to describe in detail how the
specific aspects of the tournament conform with any applicable law or
regualtion.
QUESTIONS
1. How do Facilitator Firms that operate in NYC conduct their
business legally? Or are they operating on the assumption that the
law is unclear and that they are unlikely to be prosecuted?
NOTE: Examples of NYC operating facilitator firms: New York Poker
Tour: http://www.nypokertour.com; Eat, Drink & Be Merry:
http://www.murphguide.com
NOTE: From http://www.racing.state.ny.us/charitable/texas.holdem.notice.htm,
it appears that the state is unclear about enforcement of Article 255
of the Penal Law. Specifically about these questions: (1) Can a
authorized organization operate a Texas Hold'Em tournament or poker
room outside the "safe-harbor" of the Games of Chance Licensing Law;
(2) Can any entity lawfully operate a Texas Hold'Em tournament or
poker room?
Note: Law firms with charity/non-profit practices may contain
publications on these issues on their web sites.
2. What are the pros and cons of a charity utilizing a Facilitator
Firm for a NYC charitable organization (beyond avoiding the heavy
fees)? Are Facilitator Firms absolutely necessary for a charitable
organization to avoid civil and/or criminal liability or are they used
because they serve as convenient liability shields?
EXHIBIT A:
I am glad you found us. I hope that you will find that New York Poker
Tour helps charities around New York to hold the most fun, exciting,
and effective fundraisers around. If you would like to read some
testimonials from past clients, please go to (
http://www.nypokertour.com/testimonials.htm). What we do is supply
professional poker tables, dealers, chips, cards, rules, blind and
ante structures, and a tournament manager to run the tournament. We do
not handle any of the entry fees or prizes, that is up to your
organization to handle. You will also need to supply a venue and
chairs. Our tournaments make great fundraisers that contributors love
to be a part of. Note: There may be a $275 travel fee added to the
price of your event due to your distance from our home base. To give
you an example of how much you can raise:
108 players @ $150 buy-in = $16,200
50% to prize pool = 8100
NYPT fees = approx. 3300 ($275 per table x 12)
Amount raised = $4,800.00
117 players @ $200 buy-in = $23,400
50% to prize pool = $11,700
NYPT fees = approx. 3575 ($275 per table x 13)
Amount raised = $8,125.00
If you would like to hold a VIP (high stakes) table, like we had at
the McPadden tournament, you could add a couple thousand to the amount
raised. Add a few blackjack tables for a blackjack tournament and add
another few thousand dollars. Sell some shirts and a 50/50 raffle, and
before you know it your over $9,000! We will allow re-buys and
add-ons during the first hour, this will bring the prize pool back up
and make up for the 50% of the buy-ins that your organization will be
taking.
Not bad for 5-6 hours! We could run multiple tournaments within a few
months, make this a monthly or yearly event. Every time you hold a
tournament more and more people will want to play. Don't worry if you
are not familiar with how poker tournaments are run, we do everything.
You will have to get the players for the event, this we can not help
you with.
This is what it will take to have a tournament:
· 1. You will need to contact New York Poker Tour and let us know you
want to host a tournament (631 331-0653) or (info@nypokertour.com)
· 2. We will help you to pick a date
· 3. You will need to rent a hall if you don't have one of your own
· 4. You will spread the word of the tournament, and can make a list
of players who will be attending, but we strongly suggest that you
sell tickets for the event in advance. If you don't, you can expect
absences.
· 5. As with any fundraiser, your organization will be responsible for
getting players for the event, not New York Poker Tour
· 6. We will send you a contract for you to fill out and mail back to
us accompanied by a small deposit, the balance is paid the night of
the event.
It's that simple. Let us know what you think. I hope to hear from you soon.
Thank You,
Mike Fasano
New York Poker Tour
www.nypokertour.com
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