Cardroom operators scored a rare win last week when a sharply divided state Gambling Commission agreed to let them accept larger bets.
On a 3-2 vote Thursday, commissioners raised the wager limit to $400, a boost of $100 and the first increase in 14 years.
Maverick Gaming petitioned last summer for a hike to $500 to cope with an inflation-driven rise in operating costs and to help level the odds of cardrooms competing with tribal casinos where the wager limit is higher.
Its request was the subject of exhaustive negotiations and public hearings and eventually whittled down to $400.
“Today’s vote is evidence of the professional engagement of our entire team with our regulators,” Maverick Gaming CEO Eric Persson wrote to employees following the decision. The company owns and operates 23 of 38 house-banked cardrooms licensed in Washington.
Not everyone was happy.
Washington’s federally recognized tribes – whose casinos can offer wager limits of $500 and higher – vehemently opposed the change. They argued it violates a state law requiring “social card games” serve only as a means to increase food and beverage sales.
They cited a provision dating back nearly a half-century that says businesses “primarily engaged in the selling of food or drink for consumption on the premises” can conduct social card games as a “commercial stimulant.” That language remains in the books today.
“We believe the boundaries will be gone beyond if you adopt this petition,” said Luke Esser, representing the Kalispel Tribe, at the commissioner meeting.
Ante up
Wager limits were $25 when house-banked cardrooms were legalized in 1997. The limit has been raised three times since the most recent, to $300, in 2009.
This petition pitted two longtime rivals in Washington’s gambling world.
Maverick is a growing force in the industry, acquiring its 23rd cardroom mini-casino earlier this month. It fought hard, and unsuccessfully, to get lawmakers to permit sports betting in cardrooms. Currently, it is only allowed in tribal casinos. The company is now challenging in federal court the state’s sports betting compacts with the tribes.
“I have a pretty big investment in the state, have a pretty big investment in cardrooms, and we’re trying to figure out how do we make it be vibrant,” Persson told commissioners last August according to commission documents. “We [already] don’t have sports betting. It already hurts our business on the weekends, but what can we do? At the end of the day, all we’re trying to do is compete.”
The Washington Indian Gaming Association, in a letter submitted ahead of the meeting, pointed out lawmakers have revised the state’s Gambling Act multiple times through the years but not removed the “commercial stimulant” language.
The letter also notes Maverick’s expansion.
“If anything, the smaller ‘mom and pop’ establishments have been squeezed from the market as the remaining operators consolidate, acquire market share from these smaller establishments, and brand themselves as ‘casinos.’ This seems a far cry from the Legislature’s original intent,” reads the association’s June 29 letter.
Several cardroom employees testified at the hearing on how they didn’t expect many players to wager the limit. Some operators insisted food and drink sales are still the major source of revenue.
Tough call
“This is a difficult decision. It’s very divisive. I think the arguments on both sides are very compelling,” said Commissioner Julia Patterson, who made the motion to approve the change.
Commissioners Bud Sizemore and Alicia Levy also backed the petition.
Patterson and Sizemore acknowledged the commission has not tracked what percent of revenues are from food and beverage versus card playing in the licensed cardrooms. But it does make sure they still sell those items.
“The argument is, certainly, that if we screwed up all along, then we’re screwing up now,” Sizemore said. “I think it’s very compelling that the Legislature intended for these neighborhood casinos to exist. I believe we have the rationale and legislative authority to make the decision.”
Commissioners Sarah Lawson and Anders Ibsen opposed the petition, saying it did stray from lawmakers’ original intent.
“If the Legislature meant for cardrooms to operate this way they would have done so,” Lawson said.
The higher limit will take effect 31 days after filing of the new rule with the code reviser.
