After controversial start of charity poker, Virginia might change the rules yet again

During a recent hearing on charity poker in Virginia’s General Assembly, one state senator said she was under the impression a bill to rewrite the state’s poker rules wasn’t all that concerning because the games wouldn’t involve too much money.

Sen. Jennifer Boysko, D-Loudoun, asked if her understanding — that charity poker players would pay a flat fee of no more than $8 for a seat at games that could never involve large amounts of cash — was correct.

It was not.

“Are people able to put major dollars down and we could have a $100,000 night, every night?” Boysko asked.

Former delegate Dave Albo, a lobbyist representing the Virginia Charitable Bingo Association, which is pushing to expand into poker, told Boysko the bill puts no hard limit on how high the stakes can get.

“That is correct. There is no cap,” Albo answered, adding that his client didn’t want a cap in the bill because casino poker doesn’t have a cap.

New poker regulations sent to Gov. Glenn Youngkin for review a week ago would specifically prohibit casino-style cash games like the ones Albo was describing. 

But a pair of bills advancing in the General Assembly would override that rule before it takes effect, allowing a bigger, more lucrative form of charity poker less than two years after Virginia’s watchdog agency concluded the state wasn’t supervising the charitable gaming industry closely enough.

The exchange over what the new bills would or wouldn’t do underscores the persistent confusion that has surrounded Virginia’s effort to establish a charity poker industry. The multi-year initiative has been checkered by lawsuits, open feuding between a state board and a state regulatory agency that are supposed to work in tandem and controversy over an industry being allowed to write its own rules for a new money-making venture.

Amid the regulatory chaos, unlicensed poker halls began opening in Virginia in 2021, but the General Assembly shut them down last year under threat of $50,000 fines. 

New rules being finalized by the Virginia Department of Agriculture and Consumer Services (VDACS) would allow those facilities to reopen in the future with clearer limits on what type of poker can be played. The pending regulations only allow traditional poker tournaments that require players to pay a fixed entry fee for a finite amount of chips. They also prohibit cash games that allow players to keep buying more chips if they run out.

The bills pending in the legislature, which are up for final votes in both chambers Tuesday, would upend that process by sanctioning cash games for the first time and letting would-be poker operators start applying for permits as soon as July 15.

Representatives for the charitable gaming industry, best known for the once-popular bingo halls that have been fading from relevance, have pitched the poker expansion as a way for charities to make up for lost bingo money and withstand the hit expected from the arrival of Virginia’s first-ever commercial casinos. 

“As bell bottoms, mullets and leg warmers have faded away, so has the art of playing bingo,” Del. Emily Brewer, R-Isle of Wight, the patron of the House bill, said on the floor Monday. Brewer and others have argued that because the bill sets a maximum starting bet of $5, pots are unlikely to reach  the high levels some legislators fear.

The new poker bills, proponents say, are a way to create a workable system for something the General Assembly already authorized years ago.

“Without this bill, we’re going to get completely put out of business,” Matt Benka, another lobbyist for the Virginia Charitable Bingo Association, said at a Senate hearing. “If we don’t do something this year, the only people that are going to be operating are the skill games, the casinos and everybody else. And local charities are going to be out.”

The comment about the demise of Virginia charities drew pushback from Sen. Bryce Reeves, R-Spotsylvania, who has been pushing for a brighter regulatory line between bona fide charities and charity-related entities that seem to exist primarily to benefit from state-sanctioned gambling.

“Maybe your charities might be out because all they’re doing is playing poker,” Reeves said to Benka. “But I take exception to that.”

After the General Assembly legalized charity poker in 2020, there was major disagreement over whether legislators intended to only allow occasional tournaments or full-time poker halls running cash games. 

Contrasting views on that question and others caused a prolonged clash between Virginia’s Charitable Gaming Board, led by insiders with a financial stake in the poker industry the board was setting up, and regulators with the Virginia Department of Agriculture and Consumer Services who were concerned the board was pushing beyond what the law allowed.

The General Assembly tried to hit reset on charity poker last year by passing a law closing down unlicensed poker rooms that had been playing cash games, stripping the Charitable Gaming Board of its regulatory power and asking VDACS to craft a new set of poker regulations without the board having the final say.

However, the pending charity poker bills would move the state closer to what the board tried to achieve in the first place.

At recent committee hearings, Sen. John Bell, D-Loudoun, who recently helped lead a state review of charitable gaming, acknowledged the poker bill, as originally drafted, seemed to be “going in a direction that would be contrary to legislation and the research that we’ve done over the last couple of years.”

“To me, the scope of this is far beyond what we talked about before,” Bell said at an initial subcommittee hearing on the bill. “And I think we’re getting into dangerous territory where we’re really creating a pretty large gambling operation.”

Bell’s opposition softened as the bill was scaled back in both legislative chambers, and he later said the amended version fell within his “comfort zone.” Instead of allowing 10 tables at each poker operation, the amended proposal now allows four tables and would limit the halls to operating eight hours per day, four days a week.

Another limitation added to the bill would only allow poker for charitable organizations that were qualified to conduct charitable bingo for at least one year between July 1, 2019 and Dec. 31, 2022. In the Senate, that amendment was pitched as a way to ensure the benefit would go to existing charities facing declining bingo revenue as opposed to allowing new “pop-up” poker operations.

But in the House of Delegates, the same provision caused concern that the bill would allow established charitable gaming entities to benefit while preventing future charities from having the same rights to make money off poker. 

Under questioning from Del. Paul Krizek, D-Alexandria, a representative from VDACS acknowledged the cash poker bill would exclude any charities formed after 2022, as well as preexisting charities that offered electronic gaming machines but not bingo.

“To me that means that this is tailored to a certain subset of folks that could take advantage of this,” said Krizek, who chaired the recent General Assembly committee tasked with looking into charitable gaming. “And it’s really not fair across the board.”

Krizek, who has urged colleagues to wait to see how charity poker tournaments play out before expanding to cash games, also noted the bill would potentially require VDACS to start issuing poker permits so fast that the permits might go out before the regulations are in place. The bill requires VDACS to make a permit application public by July 15 but gives the agency until Sept. 15 to finish the regulations. By law, the agency has 45 days to act on completed applications, meaning anyone who applied in mid-July could potentially get a permit before Sept. 15.

Questions of timing and speed were key legal issues in the dispute over whether poker halls could open without any permits or regulations in place.

Chuck Lessin, the chairman of the Charitable Gaming Board and longtime operator of a Richmond bingo hall, argued facilities like his could start playing poker without a regulatory system in place because the original poker bill didn’t explicitly require that the operations wait for a permit.

Albo has publicly described the Virginia Charitable Bingo Association as representing more than 30 bingo groups across the state, but the organization has strong ties to Lessin. It is registered at the same South Richmond address where Lessin has run bingo and poker games, and Lessin is listed as the group’s principal officer, according to state lobbying disclosures.

Lessin sued VDACS over his permitting dispute. When the lawsuit failed, he opened Pop’s Poker anyway, though he eventually shuttered it due to the ongoing battle that has played out in both the courts and the legislature. A state watchdog report issued in 2021 concluded that Lessin’s failure to recuse himself from crafting poker regulations in which he had a financial interest damaged “the integrity of the board and the overall commonwealth’s charitable gaming oversight.” 

Lessin called the report “BS” and has repeatedly insisted the state is cracking down on smaller players at the behest of deep-pocketed casino interests trying to eliminate competition.

Last year, a bipartisan group of lawmakers closely involved in charitable gaming reform called for Lessin to be removed as head of the Charitable Gaming Board. Lessin was not removed.

Proponents of the poker bills have stressed that the legislation would require at least 30% of gross poker receipts to go toward charitable purposes, but skeptics have pointed out that money can also be put toward property expenses like rent and building upkeep. Without clear separation between charitable groups and their landlords, a state report last year concluded that financial conflicts can exist where high-rent agreements can be used to limit the amount of money left over for charitable programs.

In a statement, a spokesman for the Virginia Charitable Bingo Association said the group’s members were “happy to lend our combined decades of charitable gaming expertise to Virginia legislators in the crafting of this legislation.”

“As an organization, our hope is that this legislation will result in charities that participate in gaming being able to replace the losses they incurred from the decline in popularity and profitability of bingo,” said VCBA spokesman Liam Gray.

Tad Berman, a citizen gambling enthusiast who regularly attends public meetings and has been sharply critical of the Charitable Gaming Board, urged the General Assembly not to reward an industry that “opened these card rooms illegally and without permits.”

“As a Virginian, as much as I might love poker and love gambling, that does not supersede my responsibility to make sure that these things are run legally and properly,” Berman said at a recent committee meeting. “And these people did not do that.”