HOA Social Committee hosting Poker Tourney

Started by MarkM19 • 8 replies • 2537 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

MarkM19 (Texas)
Posts: 65

Posted:

Hello everyone. I am a Board Member and also I am on the Social committee. We like to try and add new events every year. I came up with the idea to host a Poker Tourney this year. We are charging $20.00 buy in and $20.00 to rebuy chips once if you run out in the first hour. All prizes will be returned to the top 5 places.

The Social committee is just hosting the party and providing Beverages and snacks out of our Budget.

Can anyone think of any possible issues we may run into? I have already heard from someone who said that he did not think all of the money can be returned in cash. I am not sure why this would be a issue since it is all part of the money collected by entries.

Thanks in advance.
Mark

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Ugg... I wouldn't want the HOA in anything gambling related without a licence and following the tax laws. If your going to do illegal gambling, dont have the HOA involved at all.

If you need to buy snacks/drinks as social club supplies, but dont leave a paper trail related to gambling.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

I wouldnt take this web page as "the law" but its a good start.....
http://pokersoup.com/blog/pokercrat/show/wtf-is-the-law-on-poker-games-in-california

BruceF1 (Connecticut)
Posts: 2,535

Posted:

I can think of a couple of issues:

1. First, you better check the gambling laws in your state (and the federal laws as well). I believe many states prohibit gambling except in specific circumstances. Usually, the organizations that can raise money by games of chance are restricted to qualified 501(c)3 organizations, of which HOAs are not. Even then, licenses and/or permits are required; the types of games of chance are often restricted; the prizes and cash (if cash prizes are allowed) are restricted, and so on.

2. Taxes. It doesn't matter what your organization (including private organizations and individuals or groups of individuals), if you earn money, you have to file a tax return and pay taxes, unless you are exempt. Even tax exempt 501(c)3 organizations have to file, even though they don't pay taxes.

By the way, don't expect your HOA's D&O insurance to foot the bill for your defense if you violate the law, especially when you knew, or should have known, you were violating the law.

My opinion? Not a good idea.

MarkM19 (Texas)
Posts: 65

Posted:

I hear the concerns but I have to question the permits. Texas Holdem Poker is the latest rage and litterally thousands of tournaments will be played tonight across the country. We will not be paying out a prize that is more than $599.00 which is when you need to pay taxes on Gambling winnings.

I see it as 48 Homeowners getting together to play cards and Socialize. The HOA is not cutting the Pot or charging any fee for the event.

We can not be the first people to do this ... can we?

BruceF1 (Connecticut)
Posts: 2,535

Posted:

I don't know the gambling laws or permit requirements for California, I suggested you check just to be sure. However, as you described it, there probably is no issue.

As for the statement "We will not be paying out a prize that is more than $599.00 which is when you need to pay taxes on Gambling winnings", that is not quite a correct interpretation of the IRS code. One must pay taxes on ALL gambling winnings (less gambling losses). When the winnings exceed $599 a form 1099 must be sent to the IRS reporting the winnings, so the winner has no choice but to report the winnings on his/her Form 1040. Whether or not an individual reports gambling winnings less than $600 on his/her Form 1040 is up to the individual. I'm sure many do not, even though they're supposed to (read the Form 1040 instructions).

I was under the mistaken assumption the HOA was sponsoring this event to raise money for the social committee with a percentage of the money taken in being kept by the "house." In that event, the HOA or social committee would be responsible for taxes on their "profit."

Sorry for the confusion.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Mark:

Keep in mind generally a few guys or gals who get together for “poker” generally only has that handful participating aware of what is happening. Also, they all know that possibly (depending on their state laws) it is considered illegal gambling to some extent. Whether they participate or not is their own “personal” liability. Any HOA involvement can possibly make items “community” liability.

The establishments you mentioned especially in your state have a State license to operate a “card room”. Here is the law for your reference: http://ag.ca.gov/gambling/card.php

Also here is a site regarding other CA Gaming laws: http://www.gambling-law-us.com/State-Laws/California/

Potentially your state law has the following:
Penal Code Sec. 330.
Every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rouge et noire, rondo, tan, fan-tan, seven-and-a-half, twenty-one, hokey-pokey, or any banking or percentage game played with cards, dice, or any device, for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor, and shall be punishable by a fine not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both the fine and imprisonment.

Along with majority above … I highly do not recommend.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Gamble all you want, at your own risk, just keep the HOA out of it.

BruceF1 (Connecticut)
Posts: 2,535

Posted:

Quote:

Posted By SteveM9 on 06/26/2011 12:37 PM
Gamble all you want, at your own risk, just keep the HOA out of it.

Good advice.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here