Legality of charity poker tournaments and parental role

[Jayhawk]

While I have been a long time softball parent (dating back to eteamz) I don't really have much time to post on this forum. However, I have run into a situation I want some feedback on.

My daughter is a college junior who is having a decent college softball and academic career. She goes to school about 4 hours from our home.

Since DD was a junior in high school she has worked at a baseball academy in our city. (there are over a dozen of these in our Midwestern city) These are probably not common in SoCal but are here in the Midwest. They are monstrous facilities that take up entire large warehouses. The one she is at has a couple of fielding areas with regulation infields, about 8-10 pitching and hitting tunnels, a bank of coin operated batting cages, a weight lifting gym, a lounge, etc..

The co-owners are a father and son who have treated her very well. She makes a decent wage and they have pretty much let her set her own hours. If she is home for a month at Christmas and wants to work for three of those weeks then they put her down for those days. She is a good worker for them and they like the fact they have a college pitcher working the front desk for them. It helps to build the softball side of the business.

The father had a very brief NBA career back in the 70's, had a career as an administrator in government, and has coached travel baseball for thirty years. The son is about 30 and had a solid college career as a pitcher, knocked around in the traditional minors for several years, was given his release, and has spent the last three years in the independent leagues.

The facility caters to about 85% baseball boys and 15% fastpitch girls. There are other facilities in town that cater more to the softball crowd.

These facilities survive on team memberships although individuals sometimes buy them as well. This particular one has around 30 teams where every kid on the team "buys" a facility membership as part of their team fees.

The academy is a for profit enterprise where all the teams that purchase memberships are non profit.

Here is where the problem comes in. As part of the fund raising for some of these teams they hold these charity poker events. This Christmas holiday most of my daughter's time with the company has been spent organizing their next one in mid-January. She has dealt with everything from dealing with the gaming company, to table\chair rentals, to food, to working with a company that sets up bars for events, to holding parent meetings for the teams involved to organize parent volunteers for the event. (she is only 20 so I find it odd that she would be put in a position to organize having a liquor company to provide booze for an event even if she was not the one serving or consuming it)

The thing is I am pretty positive this whole thing is illegal no matter weather it is being done by a none profit or not. Especially in our state which is very Republican leaning. From what I can tell these type events are illegal but not prosecuted because police departments have better things to do than go after non-profit organizations trying to raise money.

The primary owner is going to be out of town when this event actually takes place. The son (less involved but still an owner) will be present. They have basically conscripted my kid to run this event for them.

I did tell my kid that I thought these things were illegal. I also saw the owner (while I was catching one of my daughter's workouts over the break) and mentioned it to him. He said since it was being done by a non-profit as a charity for that non-profit it was o.k.. I do not that to be the case but did not want to argue. I believe where there is a "buy in" and then they distribute cash payments depending on how you performed in the tournament then it is illegal gambling no matter how you cut it.

The poker tournament itself does not occur until the mid-January when my daughter will have already reported back for spring practices. However, they expect her to come back to help run that Saturday night event and have even asked her to bring a couple of college teammates that he will hire for the night to help run things.

It boils down to a "for profit' enterprise reliant on "non-profit" teams for it's existence. The "non profit" teams have built into their budget the revenue from this charity poker tournament and the "for profit" gets involved as they need these teams to be financially healthy. The "for profit" enterprise provides the facility, legwork, and professional staff to make it a success for these "non-profit" teams. The problem is that my daughter is the professional staff and what they are doing is probably illegal.

My daughter does feel a sense of responsibility to do what she can for this facility because she has worked there for four years and it is pretty important for the teams (and indirectly the facility since they are dependent on the teams) involved that this event is successful.

I am asking for help on a couple of angles-

What does the softball world think on these poker tourneys as a fundraiser? Are they pretty sure they are illegal (which I do) but do them anyway as it is not likely a local department would prosecute people doing something to raise money for kid's travel teams?

I have already mentioned to my daughter (twice) and the owner (once) that it is probably illegal. He contends that is not the case and I did not push it but I am pretty I am correct. I could go one step further and just flat out forbid my kid from being involved. That would hurt several boys travel baseball teams, hurt the facility, and likely cause termination of my daughter from a job that has worked well for both parties for four years. It is a direction I am considering but wanted more feedback before deciding.

[Sam]

While I have been a long time softball parent (dating back to eteamz) I don't really have much time to post on this forum. However, I have run into a situation I want some feedback on.

My daughter is a college junior who is having a decent college softball and academic career. She goes to school about 4 hours from our home.

Since DD was a junior in high school she has worked at a baseball academy in our city. (there are over a dozen of these in our Midwestern city) These are probably not common in SoCal but are here in the Midwest. They are monstrous facilities that take up entire large warehouses. The one she is at has a couple of fielding areas with regulation infields, about 8-10 pitching and hitting tunnels, a bank of coin operated batting cages, a weight lifting gym, a lounge, etc..

The co-owners are a father and son who have treated her very well. She makes a decent wage and they have pretty much let her set her own hours. If she is home for a month at Christmas and wants to work for three of those weeks then they put her down for those days. She is a good worker for them and they like the fact they have a college pitcher working the front desk for them. It helps to build the softball side of the business.

The father had a very brief NBA career back in the 70's, had a career as an administrator in government, and has coached travel baseball for thirty years. The son is about 30 and had a solid college career as a pitcher, knocked around in the traditional minors for several years, was given his release, and has spent the last three years in the independent leagues.

The facility caters to about 85% baseball boys and 15% fastpitch girls. There are other facilities in town that cater more to the softball crowd.

These facilities survive on team memberships although individuals sometimes buy them as well. This particular one has around 30 teams where every kid on the team "buys" a facility membership as part of their team fees.

The academy is a for profit enterprise where all the teams that purchase memberships are non profit.

Here is where the problem comes in. As part of the fund raising for some of these teams they hold these charity poker events. This Christmas holiday most of my daughter's time with the company has been spent organizing their next one in mid-January. She has dealt with everything from dealing with the gaming company, to table\chair rentals, to food, to working with a company that sets up bars for events, to holding parent meetings for the teams involved to organize parent volunteers for the event. (she is only 20 so I find it odd that she would be put in a position to organize having a liquor company to provide booze for an event even if she was not the one serving or consuming it)

The thing is I am pretty positive this whole thing is illegal no matter weather it is being done by a none profit or not. Especially in our state which is very Republican leaning. From what I can tell these type events are illegal but not prosecuted because police departments have better things to do than go after non-profit organizations trying to raise money.

The primary owner is going to be out of town when this event actually takes place. The son (less involved but still an owner) will be present. They have basically conscripted my kid to run this event for them.

I did tell my kid that I thought these things were illegal. I also saw the owner (while I was catching one of my daughter's workouts over the break) and mentioned it to him. He said since it was being done by a non-profit as a charity for that non-profit it was o.k.. I do not that to be the case but did not want to argue. I believe where there is a "buy in" and then they distribute cash payments depending on how you performed in the tournament then it is illegal gambling no matter how you cut it.

The poker tournament itself does not occur until the mid-January when my daughter will have already reported back for spring practices. However, they expect her to come back to help run that Saturday night event and have even asked her to bring a couple of college teammates that he will hire for the night to help run things.

It boils down to a "for profit' enterprise reliant on "non-profit" teams for it's existence. The "non profit" teams have built into their budget the revenue from this charity poker tournament and the "for profit" gets involved as they need these teams to be financially healthy. The "for profit" enterprise provides the facility, legwork, and professional staff to make it a success for these "non-profit" teams. The problem is that my daughter is the professional staff and what they are doing is probably illegal.

My daughter does feel a sense of responsibility to do what she can for this facility because she has worked there for four years and it is pretty important for the teams (and indirectly the facility since they are dependent on the teams) involved that this event is successful.

I am asking for help on a couple of angles-

What does the softball world think on these poker tourneys as a fundraiser? Are they pretty sure they are illegal (which I do) but do them anyway as it is not likely a local department would prosecute people doing something to raise money for kid's travel teams?

I have already mentioned to my daughter (twice) and the owner (once) that it is probably illegal. He contends that is not the case and I did not push it but I am pretty I am correct. I could go one step further and just flat out forbid my kid from being involved. That would hurt several boys travel baseball teams, hurt the facility, and likely cause termination of my daughter from a job that has worked well for both parties for four years. It is a direction I am considering but wanted more feedback before deciding.

Thank you for cramming a one-sentence question into Heybucket's version of War and Peace.

[Jayhawk]

Thank you for cramming a one-sentence question into Heybucket's version of War and Peace.

Sorry. No kidding.

Tried to put as many facts as I could into it as I have a job where it is not easy to respond later.

[AlwaysImprove]

Non profits almost always engage in work with for profits. From just paying for copies at Kinkos to paying for call centers for fund raising. This is totally and completely allowed.

In most states legitimate non-profits can fund raise using gambling. Here in Washington gambling for these types of events are allowed. I think you are supposed to get a permit and maybe pay $50 for a license. Illinios, where I grew up, has the same http://tax.illinois.gov/charitygaming/

For most non-profits you are going to raise $10-$100k I really would not even worry about the $50 license. Our church back in Illinois held a very lucrative church picnic every year for the last 40 years or so. In the 90's some pain in the arse started calling the Illinois department of revenue on them. Department of Revenue guy said he did not care, church was free to ignore the guy, but he had to give them the official response that they should get a permit. They got the permit for 2 years and stopped. Mr. Pain in the arse moved on.

There are definitely cases where non-profits engage with profits that result in legal issues. There was one posted about quite about I think 3 years ago here on the bucket in the Norcal area. That was basically a call center that setup non-profits, then called down. Very little of the funds could be shown to benefit any charity. If all the funds are siphoned off to pay management fees, or fund raising fees, you can definitely get in trouble with the law. If majority of the funds result in benefit to the initial goal of the charity, you should be fine.

There are definitely cases where non-profit gambling becomes a problem as well. There is an ice hockey rink that runs a casino as a non-profit fund raiser. Casino is a 24/7/365 operation. Of course they raise millions more than needed to run the rink and lots of shadiness about where that money drains too. But the rink is actually now well maintained and heavily used by the hockey teams.

If you are a legitimate org, running an occasional gaming based fund raiser, and most of the funds are used on legitimate/reasonable expenses, you are probably fine.

Honestly it is not even your responsibility, nor your daughters to make sure that funds are legitimately used. She is just helping hold a fund raiser. If there is direct evidence of shenanigans, you could be expected to have reported that. Other than that, I think it is pretty safe to assume funds are being raised and used within reason and it is legit. Of course I am not a lawyer, and I do not even know what state you are in, so hard to say specifically.

If the gaming event is held at the for profit location, I would recommend that some effort be made to separate the for profit from the event. The for profit should charge a very reasonable hall rental for that night. For instance, if it is dead of winter and the facility would be sitting empty on a Saturday night, it would not be reasonable to charge 120% of normal rate to rent facility. Let the non-profit collect and control all the funds, and pay the for profit for reasonable priced services/facilities.

Letting the for profit control things could look like: The for profit holds the event, collect the receipts/funds, removing a management/staff fees plus a hall rental fees and placing the remaining funds in an account in the non-profits name at the for profit's facility. I think this could garner a bit of attention, if someone were to make a beef. Likely if you are not talking about $300k or above in funds, I doubt anyone will actually ever ask questions.

Just google "<your state name> charity gaming" likely the first link will tell you the official guberment story or non profit gaming permits. Usually, somehow they want their cut.

[ajaywill]

In order to find out if it is illegal or not, you need to find the laws that are specific to your state.

I own and operate a casino games company in my state and these events are legal as long as more than 50% of the total proceeds (after expenses) go to the charity.

[jonriv]

I tend to be a little skeptical of the term "victimless crimes" since there always seems to be a victim

[hit4power]

DD's former 16U team held a very successful poker fund raiser and I know of a team in a neighboring state that did regular bingo fundraisers. What I can't figure out from the post is who is getting the money? If the money is going to be split amongst a bunch of baseball and softball teams I see no issue. However, if the (for profit) training facility is going to take money from the proceeds I would think that is an issue.

[Lunatic Fringe]

I was involved in a trade association that utilized a Texas Hold 'em tournament to fund its scholarship. The only point I recall was that we could not hand out cash prizes. The winners had their choice of a number of trips, events, etc. just no cash. All of us on the committee were volunteers. We hired a company who provided the dealers, tables, cards and who ran the tournament. We provided the food which was standard ball park fare. Never had a problem. This is in TX

[Makina]

In CA I believe that you cannot award prize money. It has to be a Big Screen TV, etc. As long as this does not turn into a huge event, then probably no one will bother you. But the only one who might complain are the local card clubs or someone that gets mad at losing money or feels like they got shafted by the tournament.

As far as your daughter, she probably would not get in trouble since she is a paid employee and not in charge of the organization putting on the event.

[Jayhawk]

Thanks. I am going with the assumption since she is simply an employee of the place with no stake in the business or event she could not likely be found guilty of anything. I just did want my kid to even have the potential to be arrested. Having your college student-athlete daughter brought up on charges of running an illegal gambling operation is not how I envision spending the last year or so of our families softball journey.

To answer some of the points brought up:

The money is for the teams. However, the facility charges the teams for it's use and this fundraiser is used to offset that expense. That is why the facility basically runs the poker event by providing the space and staff as well as doing most of the legwork in setting it up. By ensuring the poker event is successful the teams are in turn able to pay them.

There are cash payouts for this event and I am fairly certain this is illegal in my state.

They also have a bingo deal running along with the poker tournament.

They have been doing this for several years but this is the only year my daughter has been involved. They more or less put her in charge of it (father owner will be out of town and son owner not really the type to run this type of thing)