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Old Mar 29 2009, 03:13 PM   #1
bruce_brakel
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Default Michigan Misdemeanor Disc Golf

Back in 2005 I researched and wrote a layman's brief on Michigan gaming laws and disc golf. The law has not changed since then. Here is an updated version of that brief.

I. THE LAW

I first became aware of this issue in the summer of 2001 from a post on PDGA.com made by Brian Guru Hoeniger. The post prompted me to read Michigan’s gaming laws. Michigan’s primary gaming law is MCL 750.301. It states:

Any person or his or her agent or employee who, directly or indirectly, takes, receives, or accepts from any person any money or valuable thing with the agreement, understanding or allegation that any money or valuable thing will be paid or delivered to any person where the payment or delivery is alleged to be or will be contingent upon the result of any race, contest, or game or upon the happening of any event not known by the parties to be certain, is guilty of a misdemeanor punishable by imprisonment for not more than 1 year or a fine of not more than $1,000.00.

Any time the legislature writes a 108 word sentence with 13 ors in it, it is bound to be confusing. The nice thing about “or” clauses is you can just read over the ones that don’t apply to you and condense the sentence. This is what this statute is saying in condensed form, “Any person who receives any money from any person with the understanding that any money or valuable thing will be paid contingent upon the result of any game is guilty of a misdemeanor.”

What we do from 9:00 a.m. until 10:00 a.m. on the morning of any tournament in this state sounds exactly what this statute says you cannot do. We take entry fees with the understanding that there will be a payout of cash or prizes at the end of the day to the top 33-50% of the field in each division based on the result of the game.

The first time I read this I thought, “Can this possibly mean what it is saying? Isn’t there some kind of exception for games of skill, or something?"

It turns out that most states have a general exception for games of skill or endurance. Michigan does not. Michigan has numerous exceptions for specific games. There are exceptions for card games in senior citizen centers, bowling tournaments, carnival games, bingo and redemption games. None of these exceptions help us any, but it demonstrates that the lawyers for the bowling industry and the Catholic Church thought that what they were doing violated the statute. They got themselves the exceptions they needed. There also are exceptions for licensed casinos, licensed raffles and other licensed gambling. There is no disc golf tournament license authorized by statute.

At this point in my research I decided to call the State Attorney General’s office to see if I could talk to that lawyer who gets interviewed every year on the radio news and tells every one that March Madness office pools are illegal. I finally got someone in the right department, anyway. I described to him the format of our tournaments without mentioning the game. He thought that what we do not only violates the gaming statute, section 301 above, but also the anti-pool law. He thought that what we do is clearly a pooling of entry fees to create a payout. He stated that it is his office’s interpretation that all pool games are illegal in Michigan.

Here is the anti-pool statute, condensed without the multiple inapplicable alternate clauses:

Any person … who, … sells pools, … is guilty of a misdemeanor punishable by imprisonment for not more than 1 year or a fine of not more than $1,000.00.

It would not be my first thought that receiving cash entry fees for a disc golf tournament is the equivalent of selling pools. It is not like I'm putting my money on the square that says Geoff Bennett. However, pool statutes in other states have been found to cover any game where the entry fees are pooled to create a payout for the winners. And, that is what we do, isn't it?

These statutes are written towards the activities of the game operator. In 2002 the legislature made slight changes to, and readopted, a statute addressing the players:

Any person who by playing at cards, dice, or any other game, ... wins or obtains any sum of money or any goods, or any article of value whatever, is guilty of a misdemeanor. MCL 750.314.

Again, I'm deleting the multiple "or" clauses that describe other things we don't do that are also illegal.

And, for those of you who play up, it is also a crime to lose anything by playing a game unless you sue the winner[s] within three months to recover what you lost. MCL 750.315. Sheesh!

Finally, there is a convoluted general exception that I have difficulty making any sense of. I’m quoting it in full so you can see what you are paying your state legislators for::

This chapter shall not be construed to prohibit or make unlawful the operation of a game of skill or chance pursuant to the Michigan Exposition and Fairgrounds Act or the giving or payment of purses, prizes, or premiums to players in a game or participants in a contest or to the owner, driver, manager, or trainer of animals or the drivers, mechanics, or operators of a machine or the giving or payment of entry fees or the payment of expenses or reward for services or labor in connection with a race, contest, or game but it shall apply to the selling of pools or to a transaction whereby money or a valuable thing shall be paid as a gain or speculation on the result of a contest, race, game, or event not known to the parties to be certain and concerning which the parties to the transaction do not render service directly related to the holding of the contest, race, or game or the bringing about of the event.

This exception seems to say that it is ok to take an entry fee and pay out a purse or prizes on the outcome of a game, unless you are taking money or something of value to be paid on the outcome of the game. This is wholly incomprehensible to me.

II. HOW I MADE SENSE OF ALL THIS

When I first became aware of the gambling issue in the fall of 2001 I read all these statutes, and when I came to this exception I was puzzled. I remained puzzled for three years. My puzzlement worked for the Junior Girls Travel Fund, and we thank the players who supported out tournaments. In 2004, a number of things helped to break the mental log jam.

My boss took an interest in our game. He is a former prosecutor and now a judge. Once when I was describing how tournaments work with cash payouts for pros and merch for the ams he said, “So is all of that donated by the sponsors?” And when I then explained it in more detail he said seriously, “You should read up on the law because I think that is illegal.”

So I asked a fellow lawyer, a friend of many years and a personal confidant, to take a look at the law. She said, “As your friend I have to insist that you no longer run those kinds of tournaments. It’s illegal! You could lose your law license. Does Diana know about all this?!”

I have another lawyer-friend who is into horses the way we're into frisbees. We were talking about how horse shows work and how disc golf tournaments work. I did not mention the legal issue. He said, “We can’t do payouts with horse shows in Michigan because of the gaming statute. How do you get around the statute?”

There is one other TD in Michigan who runs trophy-only events. He does four or five unsanctioned trophy-lunch events for a $10 or $15 entry fee. I play one of his events every year and he has gotten to know me over the past ten years. After a tournament in 2004 he thanked me for getting their events on the state schedule and we started talking about other tournaments. I asked why they don’t run PDGA events. He said that he consulted their attorney about the payout issue, and their attorney concluded that it is illegal in Michigan.

So there's five lawyers who all read the statutes the same way. Taking money and having a payout is generally illegal in Michigan.

The only lawyer I know who takes a contrarian position always waffles when I actually show him the law. You know him. His fall back position always is, “Well, no one is getting prosecuted.” I guess it helps to be under the radar.

III. UPDATE. Over the past few years I've made some effort to actually get the law in Michigan changed. A bill was introduced in the State Legislature to create an exception for disc golf similar to the Florida exception for bowling. It did not get out of committee.

I don't think I'll be running any tournaments in Michigan this year, unless I raise the funds to do a trophy-only thing at the new Kensington course. I think I'm ready to accept the law for what it is.
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Old Mar 30 2009, 06:51 AM   #2
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Default Re: Michigan Misdemeanor Disc Golf

Bruce,

I came across this while trying to find a document from the PDGA on standard payouts. This is very interesting. It is my belief that it should be the PDGA's job to put some political pressure on the Michigan Legislature about this, or at least inform all of the TD's in Michigan that running an event that gives payouts is illegal in Michigan.

Is Ball golf given an exception? are there any PGA tournaments in Michigan? write the PGA, and see what they do?

And not to wish anyone Ill will, or harm, but if the PGA isn't given an exemption, couldn't someone "narc them out", and see what their lawyers do about it? and if their lawyers are successful, wouldn't they then have given a precedent for the disc golf community to use in petitioning the Michigan Legislature?

your one friend asked, "So is all of that donated by the sponsors?" which leads me to believe that there may be a loophole if the payouts were donated by a sponsor. Note, please, that I hate rules that let you get away with something if you (and I'm making little quote marks with my fingers) "Did something" in words, even though it isn't any different than something else. having said that, what if........."a club" sponsored a tournament and "payed out" the "prizes"? the entry fees go into the clubs "general fund". the "club treasurer" could "transfer" money from the club "general fund" into the club "prize fund", and the money is paid from there?

Just my two pennies.

Peace,
Dave-O

P.S. I can't wait for the IOS this year...Last year Novice Champ, this year REC Champ.
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Old Mar 30 2009, 07:16 PM   #3
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Default Re: Michigan Misdemeanor Disc Golf

The PGA donates all entry fees to the charity associated with the tournament and pays the players from a purse that is provided by the sponsors. None of the entry fees or gate receipts go to the purse. Nice gig if you can get it.

To date, the PDGA has preferred to ignore the problem and hope no one gets burned. It is not just a Michigan problem. There are at least six states that have similar laws prohibiting payout games. There are two states where the PDGA may be committing a felony by promoting this type of game. I have only looked at the 14 states where I've played disc golf, and the half dozen states where a TD has asked me to look. So based on random sampling, I'd guess that there are a dozen or so states that don't allow payout games and don't have a disc golf exception.
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Old Apr 09 2009, 02:09 PM   #4
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Default Re: Michigan Misdemeanor Disc Golf

Quote:
Quote:
Bruce, when you did your research on legalities of our current tournament formats, how many states did it appear it was in a grey area (or darker)?
I never completed a 50 state survey because the PDGA didn't want to know. I looked at maybe 20 states and found a half a dozen that had misdemeanor issues and two that had felony issues. Only one or two were grey. Most were black or white.
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Old Apr 09 2009, 02:12 PM   #5
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Default Re: Michigan Misdemeanor Disc Golf -- Question from Another Thread

Quote:
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Bruce,
What is the statute of limitations on the annual felonies
I've been committing? Ignorance is no defense, I know.

Beats me, but Louisiana is one of the felony states. For something as serious as felonies, you really should talk to a Louisiana lawyer. If you truly want me to brief the Louisina law for you, and are not just mocking me, send me an e-mail. If you are just mocking me, make that clear so I can retaliate.

All I remember about Louisiana law is that the misdemeanor of running a payout game is elevated to a felony when a certain number of people are involved in the promotion or execution of the game. Since the PDGA is involved in the promotion of every sanctioned tournament, the PDGA probably exposes itself to felony criminal liability by sanctioning payout tournaments in Louisiana. I have not read Louisiana law on this since whenever it was that I resigned from the PDGA board.

The bottom line is that not every state allows payout games, some states have laws regulating them, and most states have no problem with what we do. Anyone who runs a traditional format disc golf tournament with an entry fee and a payout should familiarize themselves with their state laws regarding payout games.

I usually check the laws in states I travel to for disc golf, mainly out of curiosity, and I know that Illinois, Wisconsin, Ohio and Kentucky are fine with people paying an entry fee and receiving a payout at a disc golf tournament. But, when I found out that Arizona was a felony state, I forfeited the cost of my round trip airline tickets and resigned from the PDGA.

I don't do felonies. Your lifestyle, values and business opportunities may differ.
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Old Mar 17 2013, 10:56 PM   #6
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This may be denigrated as thread necromancy, but someone brought this thread to my attention. As a lawyer licensed to practice in the State of Michigan, my curiosity was sparked. So I looked up the relevant law and found these "exceptions." I notice you have already posted the "exceptions" above, but I have a different reading than yours.

Quote:
750.310 Exceptions.
This chapter shall not be construed to prohibit or make unlawful the operation of a game of skill or chance pursuant to the Michigan Exposition and Fairgrounds Act or the giving or payment of purses, prizes, or premiums to players in a game or participants in a contest or to the owner, driver, manager, or trainer of animals or the drivers, mechanics, or operators of a machine or the giving or payment of entry fees or the payment of expenses or reward for services or labor in connection with a race, contest, or game but it shall apply to the selling of pools or to a transaction whereby money or a valuable thing shall be paid as a gain or speculation on the result of a contest, race, game, or event not known to the parties to be certain and concerning which the parties to the transaction do not render service directly related to the holding of the contest, race, or game or the bringing about of the event.
I want to be very clear that I do not propose to speak as an attorney of ANYONE regarding my reading of this statute, but it looks to me like the exception absolves anyone involved in rendering services to the contest of skill, including the TD and the participants, but that "side bets" are prohibited.

Let me see if I can help make my reading a little more clear.

Quote:
This chapter shall not be construed to prohibit or make unlawful the ... payment of purses, prizes, or premiums to players in a game or participants in a contest ... or the giving or payment of entry fees or the payment of expenses or reward for services or labor in connection with a .. contest, or game ...
Wow, that sounds pretty good, right? But what does the next part say?

Quote:
... but it shall apply to the selling of pools or to a transaction whereby money or a valuable thing shall be paid as a gain or speculation on the result of a contest, race, game, or event not known to the parties to be certain
Uh, Oh. But wait ...

Quote:
... and concerning which the parties to the transaction do not render service directly related to the holding of the contest, ... or game or the bringing about of the event.
OK, so the TD and the participants are still good. Phew! :-)

So, while I am not your lawyer, and this is not legal advice, I would speculate :-) that if any TD or player were charged under the statute, there would be a very good argument for dismissal of all charges. But I think there may be a reason no player or TD has ever been charged under the statute.
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Old May 04 2013, 12:42 PM   #7
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For two months I never saw this zombie walking!

If your interpretation is correct then all gambling would be legal in Michigan as money paid on the result of an event not known by the parties to be certain. And we know that is not true.

The way I look at it, there is a clear prohibition under MCL 750.301 quoted at the beginning of the first post. There is a strange exception in MCL 750.310 that is hard to decipher. However, the bowling industry did not think that exception would make our format lawful. They operate with the same format and spent a chunk of money to get a special exception for what they do.

When I was working in the judiciary I had a higher obligation to obey the law, so I quit running misdemeanor disc golf. I still play some. If anyone ever decides to roll up the game, they will bust the operators, not the players.
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