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Cashed Out 

Local charities could lose big when the Horseshoe comes to town

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Jacobs Investments, which owns and runs the Nautica complex, brought Charity Poker to Cleveland in 2005 for two reasons. Ostensibly, there was the magnanimous desire to help out nonprofits struggling to find income.

But more important for Jacobs: Charity Poker was the soft launch of real gambling in Ohio. CEO Jeff Jacobs always wanted a casino in the Flats. He hoped that, by showcasing his land and the public's insatiable desire for games, the state might be convinced that the time was right for casinos, which had been voted down twice since 1990. Jacobs Entertainment, a subsidiary of Jacobs Investments, was already running gaming operations in four states.

"The Poker Festivals will demonstrate the phenomenal demand for gaming in Ohio and show people that gaming is a viable source of revenue," a Jacobs VP said at the time. The county leased the space from Jacobs for $1, then leased it to each charity for $1 a week. From the moment the casino pilot launched in June 2005, tables were packed for four-day tournaments held through Labor Day in a 20,000 square-foot tent near the Cuyahoga River.

In 2006, $700,000 was raised by participating nonprofits, according to Nautica's numbers. In 2008, the tournaments were moved inside the Powerhouse and expanded to 46 weeks a year. In 2009, operations were expanded year-round. In 2011, it moved again to its current space in The Apartments at Nautica. Through it all, local charities were raking in more than $1.75 million a year and booking their tournaments a year in advance.

Between 2009 and 2011, more than 80 groups a year were taking their turns and eagerly coming back for more. It's easy, insane money: Just pull up the car, deal some hands, and walk away with $30,000.

All that qualifying charities need do is apply for a spot. Returning customers are given preference in calendar dates and in hosting more lucrative four-day tournaments instead of two. By law, each nonprofit runs the tournament; Jacobs serves merely as a non-compensated "consultant," which means little more than rudimentary table training and use of the space.

In its formative years, Nautica charged a "seat fee" for players by the hour; that practice evolved into a standard "rake" or commission: $5 for the charity for every $20 buy-in for tournaments, and a $5 or $6 rake per hand in live action table games.

At the end of the night, the charities were responsible for all expenses, paid out of their net earnings. The rest was gravy.

Garfield Heights, for one, has walked away with nearly a quarter-million dollars of gravy — a figure no amount of bake sales or charity drives could have rivaled. And that money came just as bingo — a traditional source of fund-raising for charities — began its sharp decline.

At Garfield Heights, parents must pony up $350 for their kid to play one sport, and $100 more for the second. But if you or your kid's team works a poker tournament, your ante gets cut. Poker's real score at Garfield, however, comes in helping with the cost of gear: Charity Poker earnings almost completely cover the school's annual equipment needs.

Midpark High School is in the same boat. In just two days, the school's Athletic Booster Club cleared more than $18,000 at Nautica. That money went into the general athletic fund for operations, buses, equipment, and to pay officials, according to athletic director Bob Johnson. He estimates it represents about 20 percent of his total budget.

"Not having it would affect the entire operation of the program," he says.

***

The Jacobs group was right when it forecast an increasing demand for table games, a steady stream of gamblers filling those tables, and the eventual welcome mat for casinos in Ohio. But that casino wasn't bound for the Flats.

In a painful ironic twist, Jacobs Investments will likely lose Charity Poker, one of its last remaining draws, because it was absolutely right about the demand for casino gambling.

Charities large and small are now nervously eyeing that day when Dan Gilbert's Horseshoe Casino throws open its doors and players move en masse up to the plush poker room on Public Square.

Where there was an easy $40,000 in four short days, there will now be nothing. And if things go that route?

"It would cripple us," says Garfield Heights' Hartman.

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