Portland Poker Faces ‘An Existential Threat,’ Insider SaysAs City Moves To Restrict Games, Clubs Look For Long-Term Solution |
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In July, the city of Portland sent letters to 15 area poker rooms saying that “designated dealers” are not allowed under state law. The move put the future of the city’s vibrant poker scene, which includes roughly 200 dealers, in serious jeopardy.
There’s no official number on the size of the poker market there, but it’s estimated to be as large as several million dollars annually.
Six years ago, the state attorney general’s office said that the poker dealers cannot earn wages. So to get around that law, dealers were paid only in tips. The city of Portland let this go for several years, but a recent opinion by the Oregon Department of Labor suggested that dealers should be considered employees, not volunteers. Some dealers filed complaints over not making at least minimum wage, which eventually led to Portland saying it was going to begin enforcing the old state codes. The Oregon Department of Labor brought the wage issue to a head recently thanks to a potential class-action lawsuit on behalf of some dealers.
In other words, players in the games must deal themselves, because now the dealers cannot either be employees or volunteers. The state’s stance on the games is in conflict with what Portland was allowing. Anyone who plays poker will know that having the deck rotate around the table can not only slow the game down but also compromise the integrity of the game.
Oregon’s constitution has a prohibition on nontribal casino-style gambling, so that’s why poker in Portland has been considered a form of “social gaming,” a label that has been applied to similar businesses in Austin, Texas, where commercial casinos are also banned.
The situation is threatening the business model of the Portland clubs, where the revenue comes from entrance fees, usually just $10, and food and drink sales, rather than a rake. Clubs offered daily tournaments, where 100 percent of the prize pool went to the players. The clubs tried to make sure the dealers didn’t meet the legal definition of an employee so they could be paid just in tips. According to Chris Vetter, co-director of the political action committee Save Oregon Poker, a Portland poker dealer typically made $14 an hour.
“If dealers are considered employees and clubs are forced to pay them a minimum wage — while not being allowed to collect revenue for wages from tournament prize pools — the poker industry is likely to vanish in our state,” Vetter said.
The card game scene in the area is highly regarded by the people who frequent the games.
“The poker scene in Portland was a paradise for players,” Vetter said. “Unlike Las Vegas or Atlantic City, the skill level of players in Portland was mediocre, increasing the odds that skilled players could excel. The clubs were spacious and comfortable. Our social gaming scene was arguably the best place to play poker in the country.”
This scene has been under threat for years. According to Vetter, a bill was on the table in the legislature in 2013 that would have closed all the poker clubs. Fortunately, the bill, which Vetter said was backed by Washington state casinos, didn’t gain enough traction and fell by the wayside.
Portland was persuaded by the local poker industry to delay enforcement of the codes to give “additional time to pursue long-overdue reforms to the state social gaming codes to clarify inconsistencies in the law,” Vetter said. However, a lobbying effort to get favorable state legislation passed has so far been unsuccessful.
“Unfortunately, the Indian casinos and La Center pressured a few legislators, and the bill died in committee without ever really being considered,” Vetter said. “It is also worth noting that [the] bill would have enabled clubs to hire dealers as legal employees, and would have resolved all the issues currently troubling the city, clubs and dealers.”
Right now, legal solutions are being explored to help save the games. Most clubs have stuck with permanent dealers and have continued business as usual in the meantime, but the dark cloud above the poker scene remains.
“Anyone who owns a poker room in Portland lives in a state of high anxiety,” Vetter said. “The laws are vague. Codes are inconsistently or subjectively enforced. There are multiple regulators at different levels of government. Some owners are more optimistic than others. Some believe the city will not enforce the codes. Others believe a workaround can be found.”
One poker room that closed just a day after the letters went out in July was a club called Encore (also known as PDX Poker Club). According to Vetter, Encore was the “Death Star of Oregon poker” because it was the highest grossing, with hundreds of thousands of dollars in annual revenue. It is facing a $59,000 fine from the state over the wage issue.
“Regulators and civil litigants forced the club to close almost overnight,” Vetter said. “The three largest clubs in Portland are now The Game, Final Table and Portland Meadows.”
Encore’s owner, John Ogai, passed away unexpectedly last month. Vetter said Ogai, who invested everything he had into Encore, was “despondent and aloof” in the wake of the city’s poker crackdown. Ogai’s business is also potentially on the hook for back wages. “Sadly, the stress of the class-action lawsuit likely played a role in the death of my friend,” Vetter said. “He was overwhelmed by stress and the prospective death of his company weighed oppressively on him for months.”
The state’s case against Encore was moving forward this summer.
“It’s clear that based on the facts with Encore, that our investigators showed a clear pattern, that the 59 poker dealers were workers and employees entitled to minimum wage and that’s what we intend to prove in October,” Charlie Burr, spokesman for the Oregon Bureau of Labor and Industries, told KGW.
Portland has a reputation for sometimes being unfriendly to business, because of the city’s taxes and policies. However, the poker situation has “little to do” with Portland’s “austere business climate,” Vetter said.
“Anti-poker initiatives…have…more to do with opposition from competitors in Washington and from Indian casinos,” Vetter said. “These groups outspent us dramatically on lobbying and played a role in most of the legal activity meddling with our freedom to play. Lawmakers see no obvious political advantage in championing poker and are largely apathetic about our cause. We do not have an obvious champion in Salem with the clout to protect the industry.”
What is to be done?
While the games are in limbo, Vetter believes club owners should try to unite behind a new, single lobbying effort to begin building political support. This would be made easier by the city deciding to again delay enforcement of the ban on designated dealers.
Vetter doesn’t think poker games in Portland will be raided by police, like we have seen this year in states like Arizona, South Carolina and Kansas. In other words, Portland poker players themselves don’t have to worry about getting in trouble with the law. “The prospects of poker players having trouble with the city is slim to none,” Vetter said. “We have a very civil relationship with the city of Portland, and I expect them to be fair-minded.”
Another option at this point is to pursue nonprofit poker room alternatives, so to shield the games from current rules until the law can be reformed, Vetter said. Further educating lawmakers and officials that poker is a game of skill and that it should be exempt from illegal gambling rules is always a good idea, he added.
Still, one should understand that the Portland’s poker days could be numbered.
“I would encourage local players to enjoy the clubs while they can because they may not be around much longer unless we find an economically viable way to remunerate dealers,” he said. “I think our odds are comparable to drawing an open-ended straight after the flop. Poker in Oregon faces an existential threat, but we still have arrows in our quiver and will fight to preserve social gaming until we succeed or get felted.”
Poker clubs in rural Oregon already have players deal the games, but that works better there because those are tight-nit communities where players typically all know one another. It’s not a viable option in a major city, according to Vetter.
“It makes no sense to allow an activity to thrive for five or six years and suddenly decide the rules are different or that they are going to be enforced,” Vetter added.
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