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Online Poker News Archives - December 19, 2005

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Copyright 2005 Rockford Register Star.

December 19, 2005

HEADLINE:
Charities capitalize on poker boom

Author: ISAAC GUERRERO

Body:
ROCKFORD — Poker is the new bingo.

At least, that’s how a growing number of charities in the Rock River Valley feel.

Just ask John Guth, director of Ken-Rock Community Center. Like many other nonprofit groups, Ken-Rock has watched charitable donations dry up in recent years. Budget shortfalls have forced the neighborhood center to lay off two full-time employees since 2002. And revenue from weekly bingo games is slipping.

So Guth organized a Texas Hold ’Em tournament in March that offered as the grand prize a seat at the World Series of Poker in Las Vegas. The fundraiser was a smashing success. In a single afternoon, Ken-Rock earned a $15,000 profit — about half of what the 11th Street community center earns in an entire year from hosting weekly bingo games.

“Financially, bingo is a dog with fleas,” Guth said. “These poker tournaments are much easier to orright, you can earn $10,000 or $15,000 in one shot.”

Spurred by televised poker tournaments, the Texas Hold ’Em craze is sweeping the nation and has planted its roots in the Rock River Valley. Groups including the Rockford Lions Club and Hoo Haven, a Durand wildlife refuge, are staging casino nights and poker tournaments to simply exist, and sometimes expand.

“We probably have 30 charities around town that are doing this right now, and each one is hosting up to four events a year,” said Jim Kasputis, owner of Rockford Charitable Games, a private company that charges nonprofit groups a fee to organize casino nights and poker tournaments.

Poker also is attracting new faces to places like Ken-Rock and Harlem Community Center in Machesney Park, another nonprofit group that’s jumping on the gambling bandwagon. While bingo nights at Ken-Rock tend to draw folks from nearby, a Texas Hold ’Em tournament at HCC last Sunday drew more than 100 players from Rockford, downstate and the Chicago suburbs.

Poker is more profitable, too.

Ken-Rock charges $1 a bingo card during its regular Monday and Saturday night games. Special bingo games and raffles cost more. The average Ken-Rock player will spend $25 to $30 a night on bingo, food and drink, raffles and pull tabs, Guth said. By contrast, the average poker player spends nearly $100 when they visit Ken-Rock for a Texas Hold ’Em tournament. The last tournament cost $55 to enter, and players were allowed to buy an additional $30 worth of chips.

“This is the closest thing to going to Vegas and playing in a poker tournament,” said Larry Bock, a 53-year-old poker player from Algonquin who bought a seat in the HCC tournament last Sunday for $65.

“I’ve been to the riverboat casinos, and the action here is a lot better than that,” he said. “There’s a lot of good players who come to these tournaments. I travel around and play as much as I can — maybe three or four times a month.”

The poker scene at HCC was in stark contrast to a Monday night bingo game at Ken-Rock two weeks earlier. The smoky Ken-Rock gymnasium was only half-full of bingo players who paid $1 a card hoping to win prizes up to $250. The crowd kept quiet as Guth read aloud the numbers over a crackly PA system.

“We’ve been coming here for probably 10 or 15 years,” said Eddie White, 54, as his wife clutched an ink blotter and scanned a half-dozen bingo cards spread out on the table in front of them.

“I play because it relaxes me,” White said. “Most of the people you see come every week. A lot of people know each other. They’re regulars.”

Bingo has its fans, but economically, it’s waning.

Illinois issued 1,384 bingo licenses to charities in 1993, but only 811 in 2003, according to the Illinois Department of Revenue, which licenses and taxes charities that host bingo games. Tax revenue from those games dropped 43 percent from $7.8 million to $4.4 million during the same time.

“It used to be that every charity in town had a dinner dance fundraiser, so you had to stop doing the dinner dance and you did bingo games,” said Director Shannon Scheffel HCC. “Then everybody was doing bingo, and now it’s not as profitable as it used to be. We stopped doing bingo last summer. The money we made just wasn’t worth the time and effort it takes to organize the games every week.”

HCC needed an army of volunteers to organize and run bingo games 52 weeks a year to earn about $30,000, Scheffel said. By contrast, poker requires fewer volunteers, and the returns are much larger.

HCC earned about a $5,000 profit the first time it held a Texas Hold ’Em tournament in September. Last week’s tournament should net closer to $10,000 once the numbers are tallied, Scheffel said.

How long poker tournaments will stay hot is unclear, said Mike Nilsen, public affairs director for the Alexandria, Va.-based Association of Fundraising Professionals.

“It’s probably too early to say, but I think poker has some staying power,” Nilsen said. “Bingo is largely played by an older generation, while poker appeals to younger people and to all generations. Bingo is just luck, but with poker there’s some skill involved, so it tends to keep your interest. From that perspective, poker’s probably got a significant amount of staying power.”

While there’s no limit to how many charitable bingo games a nonprofit group can host, state law limits charities to four casino nights or poker tournaments a year. Cash prizes at a charitable poker contest cannot exceed $250, but charities find ways to get around that rule. Ken-Rock gave away a seat at the World Poker Tour tournament in Las Vegas when the community center held its Texas Hold ’Em contest in September. At HCC’s last poker tourney, the grand prize was a $7,500 VISA debit card.

Scheffel’s betting that HCC could host four poker tournaments a year and reap $40,000, enough to pay a full-time employee’s salary and benefits.

“It’s stressful to be worrying about funding all the time,” Scheffel said. “I’m a social worker. I can’t imagine what my alma mater would think if they knew I was using my master’s degree to organize poker tournaments. But the bills aren’t going to pay themselves.”

Many local nonprofits rely heavily on charitable games. Rockford’s Center For Sight and Hearing has a $1 million annual budget to help people with hearing and vision loss live independent lives. A third of that budget comes from bingo and casino nights, said Diane Jones, the agency’s president.

“Our bingo revenue has fallen,” Jones said. “It hasn’t been a drastic decline, but it’s been enough that we can feel it. We’ve already started doing the casino nights, and we’re constantly looking for new revenue streams.

“The demographic of a bingo player versus that of a Texas Hold ’Em player is like night and day,” Jones said. “They’re an entirely different animal in terms of their disposable income. The poker players are willing to spend more.”

In a perfect world, Jones said her organization wouldn’t have to rely so much on gambling. But many of the manufacturing companies and corporations have left Rockford, and donations to local charities tend to drop off when you have natural disasters like Hurricane Katrina or 9-11, she said.

Establishing a private endowment can reduce a charity’s reliance on gambling income while providing stable, permanent income, said Gloria Lundin, director of northern Illinois Community Foundation, a nonprofit foundation that manages endowments for other charities.

“I look at poker and bingo as a kind of temporary fix,” Lundin said. “An endowment can provide a long-term funding solution, and you don’t need $1 million to start one. You can start with just $50,000 or $75,000, and it will continue to grow.”

But setting aside as little as $50,000 for an endowment can be tough for a small charity that struggles to pay its bills, Guth said.

“It’s kind of sad that it’s come to this,” Guth said. “We’re here to provide education and recreation programs for youths and adults, and we spend a lot of time trying to figure out how we’re going to pay the next gas bill. Some weeks I spend 20 hours or more planning these charitable games. Something’s wrong with that picture, wouldn’t you say?”

Contact: iguerrero@rrstar.com; 815-987-1371



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