Rick Snyder

GOVERNOR

MICHIGAN GAMING CONTROL BOARD

DETROIT

STATE OF MICHIGAN

Rick Kelm
EXECUTIVE DIRECTOR

December 18, 2012

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EHERGENCY ORDER OF SUNLMARY SUSPENSION PENDING FURT.H_ER INVESTIGATION

Under Executive Order 2012-4, the Executive Director of the Michi g an Gaming Control Board was transferred all authority, powers, duties, functions, records, and property of the Lottery Commissioner and Bureau of State Lottery related to the licensing and regulation of millionaire parties under the Bingo Act and its promulgated rules. MCL 432,101 et seq. In conformance with this obligation, the Executive Director has conducted an investi g ation of the millionaire parties conducted at Snookers Pool & Pub (Snookers). The investi g ation remains pending, but it has already revealed material violations of the Bingo Act, and rules promulgated thereunder, necessitating an emer g ency order of suspension of all licensed charity events at this location in order to protect the welfare and integrity of charitable gaming. MCL 432.116; MCL 24.292(2); and Administrative Rule 432.21111. Issuance of this order is based on the followin g violation history and facts recently revealed from the pending investigation. From August 1 through Au gust 10, 2010, the Michigan Bureau of State Lottery denied applications by qualified or g anizations that wished to conduct their millionaire party at Snookers. This was based on admissions by the owner of Snookers that he and his employees were fraudulently altering game records and financial statements to hide unlawful gambling that was sometimes in excess of the statutory limits. As a result of that investi g ation, 13 qualified organizations were cited by the Bureau of State Lottery for: Failing to maintain current and accurate records Exceeding the chip sales limit of $15,000.00 Paying unreasonable and or unnecessary expenses Diverting millionaire party proceeds for prohibited or unlawful purposes Filing false and/or inaccurate financial statements Failing to complete/maintain game records
g From Au g ust 2010 throu h September 2012, more violations of the Bingo Act and rules occurred at this location and involved Snookers' employees. 12 qualified organizations acknowledged the following violations:

Failin g to maintain current and accurate records Exceeding the chip sales limit of 515,000.00 Paying unreasonable and or unnecessary expenses Diverting millionaire party proceeds for prohibited or unlawful purposes Filing false and/or inaccurate financial statements Pre-paying tournament sales On December 1, 2012, during the 3 rd investigation, the owner and an employee of Snookers admitted to Michigan Gaming Control Board investigators that they routinely alter game records to reduce sales to under the statutory-515,000 limit. The Investigators also found that Snookers' employees were unlawfully: Falsifying financial statements Countin g , handling, selling, or redeeming chips Receiving, handling, or counting cash Whether a license to conduct a millionaire party is issued is a discretionary decision. MCL 432.104a; See also Top Flight .Entrn't Ltd v Schuette, 2012 US Dist LEXIS 141479 (ED Mich 2012); JDC Mgnit, LLC v Reich, 644 F Supp 2d 905, 944 (2009). Section 16 of the Bingo Act, MCL 432.116, provides in part that a license may be summarily suspended for a period of not more than 60 days when the act and rules have been violated. Additionally, Administrative Rule 432.21111 provides for the summary suspension of a license if: The licensee or lessor has repeatedly violated, or repeatedly failed or refused to comply with, any of the provisions, requirements, limitations, or duties imposed by the act, these rules, terms of probation, directives of the bureau, public policy of the State of Michigan, or any other local, state, or federal law or regulation after having been previously notified by the bureau that a violation or violations of the same or similar provisions had been, or were bein g:, committed by the licensee or lessor. The licensee or lessor has, or there is reasonable cause to believe, the licensee or lessor engaged in illegal g amblin g, or a fraud or larceny offense. That the immediate cessation of the licensed gaming event by the licensee is necessary for the protection or preservation of the welfare of the community within which these activities are being conducted, or for the protection or preservation of public policy of the State of Michigan, or any other local, state, or federal law or re g ulation respecting unlawful gaming activity.

tlac liocnso issucd for REDACTED For ',lie roasons sot forth abovc, S Li= ary" susponsion necessary to advance the public policy prohibition against all gambling activities not REDACTEb in strict conformance with expressed legislative exceptions, including the regulatory conducted framework established in the Bingo Act and its Rules.

IT IS S-fC--Th lihll Dj : -13 Richard Kalm Executive Director Michigan Gaming Control Board

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