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TRIBUNE PHOTO: JAIME VALDEZ - Jamael Rahill, a Texas Hold Em player at Aces Full, deals cards during a tournament at the poker parlor in Southeast Portland.  Portland poker parlors are in turmoil after city regulators pledged to crack down on their use of “volunteer” dealers who earn their pay via tips from gamblers.

On July 12, the city sent warning letters to 15 poker clubs saying they may no longer deploy in-house dealers for popular Texas Hold ’Em and similar tournaments. Soon after, one of the most popular poker tournament halls in town — the former Encore Poker Club in Northwest Portland — shut down.

Now other poker clubs fear they may be next.

“Obviously, the letter had a very profound effect because within a day Encore was closed,” says Mark Humphrey, a lawyer representing the Aces Full poker club at inner Southeast Powell Boulevard. “It’s another straw on the camel’s back,” Humphrey says.

For several years the poker clubs have maneuvered around the state’s social gaming law — originally designed to permit an Elks Club bingo night or similar events — to operate small for-profit casinos.

To get around the Oregon Constitution’s prohibition on nontribal casinos, poker clubs make their money through entrance fees and selling food and drinks. All gambling wagers are divvied up among the players, with none going to the “house.”

TRIBUNE PHOTO: JAIME VALDEZ - A card player in a Texas Hold Em tournament reveals their cards, much as they do on ESPN, during a tournament at Aces Full.Texas Hold ’Em tournaments can fill 10 or more tables, where players compete over several hours until only the winner or winners are left with chips. They can win $1,000 or more.

It’s hard to make a legal case that it’s merely “social gaming” if the clubs paid professional dealers for each table, so the clubs tiptoed around that restriction by having dealers survive on tips from the tournament players. Humphrey estimates the dealers earned $16 to $18 an hour that way.

City regulators have long known the practice was legally questionable, but have largely operated on a laissez-faire basis, saying there are bigger worries than cracking down on a popular pastime for thousands of residents.

Dealers seek wages

Last year, Bonne Marsh, a dealer at Portland’s Ace of Spades club, filed a complaint with the Oregon Bureau of Labor and Industries, saying the club owed her at least a minimum wage. The agency found in April 2015 that Ace of Spades owed her back wages plus civil penalties.

This year, an Encore dealer filed a similar complaint. BOLI investigated the complaint, and on June 17 issued an intent to assess civil penalties of $59,000 against Encore, since renamed PDX Poker Club, and the affiliated King of Clubs Dealers Group, on behalf of 59 dealers. The ultimate fee could be much greater if the club is required to pay back wages to those dealers.

John Ogai, owner of the now-shuttered poker club, declined comment for this story, citing the pending BOLI case.

State investigators determined the poker dealers work at the behest of the clubs, and the clubs aren’t nonprofits, so they can’t use volunteers in this manner, says BOLI spokesman Charlie Burr.

“We believe they were performing work with the employer/employee relationship and thus were subject to Oregon’s minimum wage law,” Burr says.

However, BOLI hasn’t issued an order yet in the Encore case, as there is a contested hearing scheduled in October. “There hasn’t been any new rule-making,” Burr says.

But Anne Holm, the city regulator for poker clubs, didn’t wait for a ruling, issuing a stern letter to the city’s poker clubs a month ago. Holm didn’t return a call, but city senior management analyst Jen Clodius says the BOLI case left the city no wiggle room.

“It’s enforcing state law based on the BOLI investigation,” Clodius says.

It’s unclear why the city is choosing to act now.

But the two BOLI cases and the city’s new approach to enforce the law aren’t the poker clubs’ only worries.

Class-action suit looms

Last month, Portland attorney Rachel O’Neal filed a notice of intent to file a class-action lawsuit on behalf of Encore poker dealers, arguing they should be paid at least minimum wage.

Under Oregon law, tips do not count toward the minimum wage, but come on top of that wage.

“I’ve always known that the dealers weren’t volunteers; they were employees,” says O’Neal, who formerly played poker tournaments at Encore.

The social gaming law means it must be a game among players only, she says, so dealers can’t have “any association with the club.”

The city’s July 12 letter states that “designated dealers are not allowed” at the poker tournaments, because state law bars them from being employees of the clubs and they can’t be volunteers either.

That poses a Catch-22 for the clubs.

The city’s solution, advanced in that letter: “The deal must rotate among the players.”

TRIBUNE PHOTO: JAIME VALDEZ - Jimmy, a Texas Hold Em player at Aces Full, deals cards during a tournament at the Southeast Portland poker parlor.That means each table at a Texas Hold ‘Em tournament must have the players deal cards to themselves and their competitors, as is done at home poker games.

Why dealers are needed

Ricky Lee, general manager at Ace’s Full in Southeast Portland, says that’s how his club is operating now to stay in compliance with the city. But he worries it could ruin the games and the company’s ability to stay in business. Last Thursday, the club didn’t lure enough people to hold its scheduled early-afternoon Texas Hold ’Em tournament.

Lee, a former dealer in Las Vegas, says an experienced dealer knows how to control the game, move it along quickly, and avoid disputes among players.

“The original premise when I opened the club was to have the best dealers in town,” Lee says.

Poker is a “visual game,” he says, and players in tournaments want to focus on their opponents and not dealing. Rotating the deals leads to more mistakes and “misdeals,” he says, and slows the game down.

And some players, whether due to age or infirmity, are not that adept at dealing across long tables.

Lee, like others, says the poker tournaments are a relatively cheap and harmless form of entertainment, providing up to six hours of fun for $20.

Despite the city’s stern letter, players say two of the largest surviving poker clubs, Final Table in East Portland and the new Portland Meadows Poker Room at the North Portland racetrack, continue to use in-house dealers.

Brian Sarchi, owner/operator of the Portland Meadows club, says he’s in talks with the city about the rule. Final Table proprietor Ben May did not return phone calls.

Dealers seeking to get better pay for their work in Portland may soon find it across the river. The Cowlitz Tribe is building ilani, a $500 million casino complex in La Center, 16 miles north of Portland. The casino, scheduled to open next year, is expected to hire about 1,000 people and become a magnet for Oregon gamblers.

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