Are you a Not Profit? Do you like Poker?

[Angie]

From Today's Chicago Reader:

Gambling impresario Ken Kaulen has an easy way for nonprofits to raise an extra eight to ten grand.

By Deanna Isaacs

PSST: RUNNING A small nonprofit arts organization? Starved for funding? Looking for eight or ten grand to balance the budget or get that next project off the ground? Ken Kaulen, 26, has a sweet deal for you: easy money and fast, barely any effort, and you won’t have to take your clothes off or deliver any mysterious packages. Kaulen, aka ChicagoKenny, owns a new company called Chicago Poker Live. He wants to help you throw a series of four casino events—mostly poker parties, with maybe a blackjack table or two. And if you don’t know hold ’em from stud or a flop from a blind, no problem. All you have to do is get a charitable gaming license from the state—which costs $200. He’ll help you with the paperwork and hook you up with everything else, including the venue, equipment, trained dealers, and the players. And here’s the part charities really like, Kaulen says: you’re in on the action risk free. If your event loses money, he covers all the expenses. His first arts-group client is Chemically Imbalanced Comedy, which will be trekking from its north-side storefront out to Woodridge tomorrow (April 14) for the last of the four events its license allows this year.

Chemically Imbalanced founder Angie McMahon says she was “trying to think outside the box” about fund-raising when she heard about Chicago Poker Live (also known as Chicago Charitable Games) from her sister, a member of a Northern Illinois University business fraternity that had just worked with them. As her sister explained it, McMahon says, “it’s illegal to gamble in Illinois unless you’re a charity, but you hire this company as a consultant and they provide your volunteer dealers, they get the chips, they get the poker tables, they find a venue, they help you with your tax forms, they publicize it, and they get you your poker players. After you pay the taxes and room and equipment rent, you split the rest with them.” McMahon says she checked it out, found that this is indeed the way it works, and signed her group up.

Amazingly, McMahon says, 250 to 300 players showed up for each of her theater’s first three events, all held at a ballroom in Willowbrook. “If I organize a casino night by myself, it’s gonna be me and my theater company and their friends who are coming,” she says. “But these are serious poker players who are looking for tournament action like you might find in Vegas. This is a company that’s providing them a service: they get to play some real heavy-duty poker, and it’s also benefiting charities.” McMahon says she put the previous events on her blog and the theater’s e-mail list, “but honestly I haven’t gotten a single theater person who’s come in the door—it’s been 280 people who are clients of Ken.” Chemically Imbalanced netted $1,500 at its first event, $2,300 at the second, and $2,500 at the third.

Things have changed since Illinois enacted its charitable gaming law in 1986 to regulate church-basement roulette and black-tie galas. Televised tournaments have fueled a craze for poker, and the Internet has spawned an online community of players ready to swarm to live action. As a result the charity casino night has turned into a sort of floating game frequented by dedicated players for whom the charity is a mere means to an end. Illinois places a cap of $10 on any single bet and stipulates that no player can walk away with more than $250 in winnings, but after observing an event organized by another company in an Arlington Heights banquet hall last year, the New York Times reported that gamblers “easily skirted” the rule by buying chips from one another and “sweetened the action by making side bets.” The law prohibits third-party businesses like Chicago Poker Live from running the games but allows charities to hire them as consultants.

“There are so many people who don’t understand this whole new poker boom that’s happening,” Kaulen says. “That’s where I come in.” He and his brother started their business in January, he says, and have an e-mail list of 10,000 players who’ve opted in at their Web site (www.chicagopokerlive.com). “The charity doesn’t have to solicit their friends and family to show up—I bring a whole other group of people,” he says. “All the charity has to do is work the event the day of and [do] some paperwork before and after.” In addition, he says, “I have a whole network of volunteers that’ll help deal”—usually poker players themselves who are “either looking to get better at the game or looking to play” but are temporarily out of funds. Kaulen says he “kinda” does the “legwork” for the charities but claims not to manage the actual events: people from the sponsoring nonprofit run the bank. “I train them, walk them through everything. [Then] I’m just there, and if they need questions answered, they ask me.”

Kaulen says his events offer a “buffet of poker,” which he explains as more tournament play than what’s usually found on the boats. Players buy in for as little as $10 (in games where you’re likely to find beginners) to as much as $160, as many times as they wish—there’s no limit on losses. The tournaments pay in cash prizes. The sponsoring charity gets a 20 percent rake off the total amount bet in the tournaments and a maximum of $5 per pot for every cash game. According to Kaulen, a total of about $40,000 is wagered at each event, and the sponsor takes home $2,000 to $2,500. He’s been holding events in the western suburbs, where costs are lower than in the city; he says his fee is negotiated with each charity and depends on how successful the event is. The banquet halls sell drinks and food; none of that money goes to the sponsoring organization. But the nonprofits do get one other perk: the chance to turn poker players into arts fans. After the recent games hosted by Chemically Imbalanced, Kaulen says, “I know of two or three guys who are now going to go to their shows just because they heard about them at a poker event.”

[Angie]

From Performink:

All in the Game: Charity Poker

BY Jonathan Abarbanel

“I am shocked – shocked! – to find gambling going on here,” police inspector Claude Rains barks at nightclub owner Humphrey Bogart in Casablanca. The State of Illinois is just like Casablanca: everyone knows gambling is illegal except for floating casinos, pari-mutuel racetracks, the state lottery, off-track wagering facilities and any old Catholic church bingo game. But other than that, forget about it.

Unless you happen to be a 501(c)3 charitable organization, in which case you can legally host up to four gambling events a year with the net take going into your organizational coffers. Theatre and dance troupes and other nonprofit arts organizations qualify. All you need is a Charitable Gaming License, courtesy of the Illinois Department of Revenue’s Office of Bingo and Charitable Gaming, and enough gamblers – oops, gamers – to make it worthwhile.

Fortunately, Ken Kaulen, Jr., head of Chicago Charitable Games (www.ChicagoPokerLive.com) has 10,000 or so card players on his e-mail list, as Chemically Imbalanced Comedy recently discovered. Employing Kaulen’s services, Chemically Imbalanced has netted $1,500 and $2,300 respectively in the course of two poker events with two more still to come, each expected to net at least $3,000.

Although Chemically Imbalanced is not the first non-profit to fundraise through gaming, it appears that most performing arts organizations are unaware of the opportunity. Or, it may be that a net of $10,000-$12,000 is not a sufficient return for our largest companies. But for scores of theatre and dance troupes with budgets under $250,000, a few legal poker games could raise a significant piece of change.

Enter Kaulen and Chicago Charitable Games. Chemically Imbalanced Comedy (CIC) executive producer Angie McMahon explained that Kaulen is a one-stop shopping service for those who wish to put together legal poker events. Basically, in exchange for a percentage of the gross revenue of an event, Kaulen books a room – usually a banquet hall with a cash bar – organizes and supervises the games, provides the tables and dealers, and markets the event to his thousands of dedicated players. Kaulen even helps secure the gaming license.

“There’s a lot of paperwork to fill out and a lot of hoops to jump through and I walk [the organizations] through that,” he says.

As for his players, they must legally be 18 and they are overwhelmingly male. The most recent CIC event drew 244 men and five women. Kaulen says, “These are guys who want to play poker for charity, and they don’t much care what charity it is.” What the official hosting theatre or dance troupe does is provide a few volunteers to meet and greet the players, and talk up your troupe’s work to those who are interested.

The gaming license allows such charitable events to run for 12 hours. That’s a long time, a lot of poker. An “evening” can run from noon until midnight, or from 2 p.m. until 2 a.m., which is the legally mandated stop time. Weekends draw better than weeknights, Kaulen says, and Saturday night draws best of all. Neither of CIC’s first two events was on a Saturday night, which is why the net was under $3,000, he explains.

Typically, Kaulen provides several types of action at an event. There may be a tournament game for which each player pays a flat fee up front, there may be one or more tables offering a cash game played for a per-hand pot, and there may be one or more blackjack tables. In a tournament game, 20 percent of the entrance fee ($100 per player is typical) goes to the charity and 80 percent to the prize pool. In a cash game, 10 percent of each hand is taken for the charity to a maximum of $5 per hand. In 12 hours of poker, it adds up. Depending on the event and the crowd, there may be table limits such as a $2-$4 bet at the beginners’ table or a $5-$10 bet for more experiences players who nonetheless want to limit their exposure. There may be no-limit tables, too, although it’s never going to resemble the high-stakes games of professional poker played in Vegas and Monte Carlo. It’s more like Reno than Vegas.

Kaulen’s portion of the charity’s take is flexible, he says. For a lesser-grossing event, it may be a 50-50 split, which McMahon says is CIC’s deal (and she has no complaints). But Kaulen adds that his percentage drops as the gross rises.

A Charitable Gaming License allows more than just poker, too. Roulette, craps, keno, high-stakes pin-the-tail-on-the-donkey and other games are covered. But Kaulen points out that poker is the only game in which a charity can’t lose “because you’re playing against the other players, not the charity.” In games such a roulette and craps, it’s one player vs. the house, and the charity is the house.

Kaulen believes that Chicago Charitable Games is the only company in the area offering this particular kind of service. (He says there’s another one in Rockford.) Based in Naperville, he welcomes inquiries online at www.ChicagoPokerLive.com or at 630/901-9797. He suggests that organizations plan on 45-60 days from first contact with him through the event itself, including the licensing process. Applicants must be 501©3 corporations in business for at least five years.

At least one other Chicago Off-Loop troupe has experimented with gaming nights, and that’s Stage Left Theatre Company, which has held two gaming benefits in two years. Stage Left, however, chose not to secure a Charitable Gaming License.

”We didn’t make it a gambling enterprise,” says Stage Left’s John Sanders. “We made it an admission event where people didn’t gamble their admissions.”

Instead, people bought a ticket as they would for any other benefit, and then played gambling-type games for donated prizes. Held at the theatre itself, there was little overhead or expense involved for Stage Left, which was happy to clear $500 on such events, says Sanders. Stage Left is considering a similar future event.