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The Washington State Gambling Commission (WSGC) on Thursday (August 11) agreed to initiate the rule-making process that could lead to an increase in wager limits at cardrooms across the state.
According to the petition submitted to the commission, Maverick Gaming proposed increasing the maximum single wager limit from $300 to $500 for all house-banked gaming tables.
The company also asked to raise the single wagering limit in a licensee’s “high limit room” to $1,000 for a select number of tables, including no more than one high limit table for cardrooms with one to five total tables.
Those cardrooms with six to ten tables would be limited to two high limit tables, and cardrooms with 11 to 15 total tables will be restricted to three high limit tables.
Vicki Christophersen, a lobbyist with Maverick Gaming, told the commission that the proposal was an outline of the concepts “we would like you to consider.” She added that the company is not wedded to these recommendations and the limit increase come from tribal compacts in the state.
“This is what it is about, people would like to bet more but they can’t, so they are choosing other options — tribal gaming,” said Eric Persson, owner of Maverick Gaming. “We don’t have sports betting, which hurts us on the weekend. So what can we do? All we are trying to do is compete."
Persson reiterated that at one time there were more than 100 cardrooms in Washington, a number that has declined from 44 prior the coronavirus pandemic to 39 today.
“We should have a chance to compete for that consumer, but tribes here have a monopoly,” he said. “What we are requesting is a very modest proposal.”
Persson’s comments on cardrooms competing with tribes for a consumers’ discretionary income was not received well by the five-member commission.
Chair Alicia Levy made it clear to both Persson and Christophersen that she is open to having further discussion on wager limits but the continued “comparison to the tribes … is not going to be productive.”
Both commissioners Bud Sizemore and Kristine Reeves made it clear during Thursday’s hearing that they “don’t think of tribes as competition” for cardrooms.
In Maverick’s petition, Christophersen argued wager limits need to be updated to reflect current economic conditions and customer demand. She noted that the current $300 limit was approved in 2009, and in the 13 years that have followed “operating costs have increased dramatically.”
Since 2009, Washington’s minimum wage has nearly doubled from $8.55 per hour to $14.49 per hour.
Additionally, two local jurisdictions — Seattle and SeaTac — have higher minimum wages, with $17.27 being the minimum for companies with at least 501 employees in Seattle and $15.75 for those with fewer than 500 employees.
SeaTac’s minimum wage is $17.54 per hour, but it applies only to certain hospitality and transportation workers.
“Additionally, supply [chain] issues and inflation have an impact on revenue,” Christophersen wrote in a memo to the commission.
“Once a significant driver of revenue and employment at our properties, our food and beverage businesses are not sustainable on a standalone basis in the current inflation environment without the support of stronger gaming revenues.”
Commissioner Sarah Lawson told Persson and Christophersen that she was sensitive to their increased cost of doing business but asked if the proposed wager increase would allow them to subsidize their food and beverage while every other restaurant or bar has to raise their prices.
Persson said they have increased their food and beverage prices by 20 percent year-over-year.
“Food and beverage is very important, it’s 30 percent of our revenues,” he added. “We are not asking to subsidize our food and beverage. We are trying to identify new consumers who want to come in and bet more.”
During his presentation Thursday, Persson forecast that a $200 limit increase will equal 12.5 percent growth in gaming activity from Maverick’s existing customers, totalling $4.1m in additional revenue.
Allowing cardrooms to offer max bets above $300 will lead to 7.5 percent growth in high end play from new customers, or $2.5m. With a 10 percent state gaming tax, both increases were expected to generate an additional $660,000 in taxes to local jurisdictions, according to Maverick’s proposal.
Washington’s cardroom industry began in 1997 with wager limits set at $25. Those limits were increased in 2000 to $100, in 2004 to $200, and again in 2009 to the current limit of $300.
Maverick initially submitted a proposal in January to increase wagering limits to $500 with the ability to raise the limit to $1,000 on 25 percent of tables. Tim Merrill, president of Maverick’s Washington operations, withdrew the petition prior to the commission taking any action.
After an hour of discussion Thursday, Sizemore told his colleagues that they needed to initiate the rule-making process, but he was not suggesting that what Maverick proposed should be the final product. Eventually, the WSGC voted 5-0 to allow the “rule-making process to proceed for wager-limits to further discussion.”
