Busted: Downtown Poker Club deemed illegal

The fate of the Downtown Poker Club &

at least as a non-profit business at Will Dodge Way &

has been sealed after an investigation by the Oregon Department of Justice's Charitable Gaming Unit.

The DOJ first learned of the club from an article published in the Daily Tidings on March 19. That article detailed the club's membership dues and fees, some of which were considered illegal, according to DOJ officials.

The club was funded by each member paying nightly table fees of $20, which were collected by taking a small percentage of each pot played, also known as the "rake."

Any money collected in excess of $20 per player was placed in a player's fund to be redistributed among the players through parties and refreshments. Because the club was not making a profit from these fees, and only paying for rent, expenses and improvements, Russell Bjerke, co-owner of the Downtown Poker Club at the time of the article's publication, said he felt the practice was legal.

The DOJ disagreed.

"The DOJ investigator said that the club was in violation of the Monte Carlo rules because they were a social gaming club and were taking income from the game," said Detective Bon Stewart of the Ashland Police Department, who accompanied the investigator to the club.

The poker club met the city of Ashland's requirement to be a "charitable, fraternal or religious organization," and was allowed to host social games such as poker. However, the fact that the owners were charging nightly fees just to play in the games meant that they were singling out the card game as a source of income, a violation of the charitable gaming laws under which the games were operating as a 501(c)(7) non-profit organization, according to the DOJ.

Pending further investigation, the club could face large fines from the state of Oregon.

No decision has yet been made by the DOJ and, while the owners of the club reportedly worked with lawyers to reformulate their business plan so it would fall within the guidelines of the law, they were not able to renew their lease for the month of May.

The Downtown Poker Club rented its space from the Elk's Lodge, which is upstairs from the club and owns the building.

According to Fred Hatfield, chairman of the lodge's board of trustees, the Poker Club had gained the original three-year lease with the caveat that it must build a rest room specifically for the Poker Club. The club had been given an extra 90 days to complete the project but failed to do so, Hatfield said.

The investigation forced the club to shut down for more than a month while it altered its business model.

Before the club re-opened, the Elk's board of trustees used its right to review what would essentially be a new business and opted not to renew the lease.

The Elk's Lodge hosts poker games in its facilities and was also investigated because of the implication in the article that the dealers were paid for their services at the lodge, according to the Department of Justice.

"The dealers have never been paid," said Judy Corallo, a dealer at the Elk's poker tournaments.

Hatfield said, in reality, the dealers do receive compensation &

but only through tips from the players.

"The investigator initially told me that the dealers 'could not profit in any manner,'" said Hatfield. "I simply asked him how I could control what players do with their money. He said that as long as we give the players all of the money in the prize pool, then what those players do with the money after it has been given to them is their business."

While this gray area seems to allow for winners to share a small portion of their prize, it is illegal to verbally suggest that the players do so.

The weekly and monthly games that take place at the Elk's Lodge have been deemed legal and will proceed as scheduled.

According to the city of Ashland, the Downtown Poker Club was renamed The Private Club and purchased a business license in April.

Being a private club should exempt it from charitable gaming laws, but the address listed on the application for a license is still 255 E. Main St. &

the address of the Elk's Lodge. The current owners have declined to comment on any plans to relocate.

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