Kentucky Gaming Commission and MC Fundraisers

XXLBIKER.com has received several Poker Run “cancellation” notices over the past month. The first one involved a “Blackjack Run” to raise money for Feed the Children, an organization that distributes food and supplies to pre-screened local families in need. The 2^nd cancellation came from another group hosting a “poker run” to raise money for Military families in need. Other groups have modified their events so they can still have them.

At this point, XXLBIKER decided to investigate. The organizers of these two rides, as well as others, were contacted by the Kentucky Gaming Commission over the past couple months requesting that they acquire a charitable gaming license or face fines and up to 30 days in jail. The first group was told that they normally do not investigate poker runs and motorcycle style charity events unless someone files a formal complaint but this year it seems they’re getting a bit stricter. If you’re an event organizer or MC with advertisements out for a Poker Run, you may have already been contacted by the DCG. If not, consider yourself lucky. The initial contact is enough to make you pull your hair out in panic mode – as if organizing and hosting the ride isn’t stressful enough. This is why we’re writing this article though – you don’t have to worry! If it sounds confusing to you - there are cliff notes towards the end of the article.

Whitty contacted the Kentucky Gaming Commission to find out why they have decided to go after MC fundraisers this year as opposed to the past several years. We mainly wanted to find out several things and were hoping for a reasonable response. First, we asked not “who” but what is causing these investigations to occur. We wanted to know if it was an individual, group, or a state initiated investigation. Second, we asked what can organizers do to still have these rides and raise money for good causes. XXL was pleased and surprised with the response.

A member of the staff from the DCG responded with an extremely friendly and professional explanation of how these rides can continue without violating Kentucky Gambling laws. Unfortunately, we were unable to find out who/what has sparked these investigations. If not State initiated, it could very well be a psychotic group like the “Westboro Baptist Church” filing complaints in retaliation for motorcycle interference during their protests at soldier’s funerals. Only the DCG knows for sure and they are unable to release that information to my knowledge.

The DCG really seemed to want to help us out and we appreciated that. Of course, they could REALLY help by ignoring any complaints against motorcycle groups/organizations trying to raise money for charitable causes but just like anyone else – they have a duty to fulfill and can’t ignore something that directly conflicts their responsibilities. So here’s the info that will help you organize your next/existing charitable fundraiser without violating Kentucky Law and risking fines/jail time.

According to KY law 820 KAR 1:01(31) – a poker run which charges riders a fee to participate is gambling. If there is a stake (fee/donation charged to ride from stop to stop with the intent to receive a playing card at each checkpoint; involving the element of chance (a drawing of the card at a designated stop); where the ultimate winner is determined by chance. (something of value is awarded based on winning hand of cards drawn by chance) In Kentucky, Poker has been defined as a game of chance, rather than a game of skill - KRS 238.505 (17)

This style of fundraiser requires a state issued charitable gaming license. This basically applies to any “casino style” game of chance like Blackjack, Poker, Bingo, etc. You can apply for such license if you wish by going to http://dcg.ky.gov/ - you can view regulations, contact info, useful links, and more information. Please keep in mind to allow at least 60 days before your Poker Run, should you choose to apply, for them to process and approve/deny your application. Keep in mind, you may be okay and under the radar if the Department of Charitable Gaming doesn’t contact you, but as several other organizers have found recently, sometimes it isn’t worth the risk. Many of us, including several charitable MC event organizers had no idea they were violating any laws by hosting a poker run. It’s just something fun that we do and a good way to raise money for a worthy cause.

Yes, applying for a license is a bit easier and logical for a large charity organization like Spina Bifida, Apple Patch, March of Dimes, etc. As a general rule, charitable groups holding 501c(3) IRS exemptions and having existed for charitable purposes for 3 years will more than likely qualify for a license. Most poker runs raise less than $25,000 and qualify for an abbreviated license application process that only requires financial statements to be filed once a year. The application needs to be filed 60 days prior to the event but the DCG is willing to work with groups to get them a license as soon as possible in the event they are past the 60 day deadline.

But what about smaller groups that are composed mainly of volunteers with no major sponsorship? If the group doesn’t meet the legal requirements for getting a license, there are still several ways the group can hold a poker run. Without a license, organizers are unable to charge riders a fee or donation to participate, nor award a prize based on the winning hand. At that point, there is no stake and the play is purely entertainment rather than gambling. This means that your group will have to come up with other methods to raise money for your charity/cause. According to the DCG, many motorcycle groups that are not 501 c(3) have already decided to change their events in this way and are going ahead with their runs.

Per recommendation of the Department of Charitable Gaming – here is how you can still host your fundraiser without violating Kentucky Law or needing to apply for a gaming license.

1. Award money as a door prize drawn at random. Riders pay to be part of a run and get a door prize ticket. They can still draw cards, but the winner is based on random drawing, not a winning poker hand. These proceeds are then awareded as a “door prize” drawn at random. This takes away the legal definition of “gambling” from the poker run but still allows money to be raised and awarded. “Door Prizes” are not gambling, and are considered prizes which are awarded to a person based solely upon the person’s attendance at an event or by purchase of a ticket to attend an event. The DCG states that many groups have found this “split the pot” door prize scenario very profitable for their charity.
2. Hold a raffle in conjunction with a poker run – Riders can purchase a raffle ticket at the beginning of the poker run in order to participate. Each group holding the event can sell up to $300 worth of raffle tickets in which the pot is split – half would go to charity, the other half goes to the winning raffle ticket holder drawn at random. If the event has multiple individuals or groups hosting the ride (for example, H.O.G. and the Humane Society) Each individual/group can hold such a raffle 3 times per year.
3. Auctions do not violate any charitable gaming laws.
4. Fundraising events such as a picnic at the end of the poker run also do not violate the gaming laws.
5. According to the DCG website – any “carnival style” games that determine a winner based on skill, not by chance – can also be used without needing a charitable gaming license. This includes games such as dart throw, bean bag toss aka cornhole, basketball shot, golf putt, duck pond, auctions (silent or live), Milk bottle throw, bean count, etc.

If the language used above has you even more confused than before; here’s the XXL cliff notes:

If you’ve been contacted by the Kentucky Department of Charitable Gaming because you don’t have a license – don’t freak out. You don’t have to cancel your run – just change it up a bit using the advice provided by the DCG in the numbered list. You do not have to get a license to host a poker run – as long as the winner is chosen by random, not by winning hand.
Basically, this means you don’t have to go through countless sheets of paper at the end of a ride to try and determine who the winner is. Draw a ticket stub or a name from a bucket to determine the winner. You could even share what kind of hand they had – it might be entertaining if “Bob” won the poker run by random drawing with a pair of deuces! At least entertaining as long as you aren’t a rider with a Royal Flush!

If you have been contacted by the DCG but still want to do a traditional Poker Run where the winner is determined by best/worst hand – then you must get a license or risk facing fines/jail time.The good news is that the DCG is more than willing to assist with your fundraising event and can even provide more advice, custom tailored to your events needs. Keep in mind – if you have not had a 501c (3) exemption for at least 3 years – applying for a license could prove to be a waste of time.

In reality, this could even be a good thing for riders out there burnt out on poker runs – a few changes in the games or the way the rides are held might be just enough to keep things really interesting and increase creative competition for groups raising money for their cause.

When Whitty was helping organize and plan several fundraisers/charity events in the past – one idea that never got executed but seems really fun – would be a motorcycle scavenger hunt. It doesn’t have to be complicated and it wouldn’t require as much police assistance, traffic blocking, etc. All participants could meet up at the starting point, break into teams of 4 or 5, pay their entry fee, sign waivers, get their lists, and have to be back at the end point by a certain time. Winners would be determined by accuracy and completeness of the list – divided among team members evenly. Even if not picking up items – the participants could take photos at certain stops on the list. Winners could be determined by most creative, fun, interesting photos as a tie breaker. Most of the places involved with hosting poker runs have a newer flatscreen TV that a laptop could easily plug into so the photos could be shared with everyone.

If you have any questions in regards to anything in this article, please feel free to ask in the comment section below. You may also contact the Department of Charitable Gaming directly on their website as well. They are extremely friendly and helpful with a wealth of knowledge in regards to fundraising without violating laws or requiring a license so the charity can still receive all of the proceeds from your event.