7 Big Changes: How Michigan Gaming Evolved Under Richard Kalm

After more than 30 years in the Macomb County Sheriff’s Office, Richard Kalm didn’t think his second career would last for more than a decade.

Now he’s hoping for a third act in the sector.

The former Michigan Gaming Control Board executive director stepped down after 14 years at the post. He was replaced by his deputy director, Henry Williams, on May 17.

In many ways, his time as the state’s head regulator has the same tenets as his policing days: Like a traffic cop, for instance, Kalm’s agency stopped a handful of things from happening and allowed others to move forward.

In totality, it was a busy nearly decade and a half on the beat.

Kalm spoke to Playinmichigan recently about some of these major topics.

1. Greektown bankruptcy among first challenges

About a year after Kalm took over, Greektown Casino in Detroit underwent bankruptcy proceedings in 2008 under their former owners, the Sault Ste. Marie Tribe of Chippewa Indians.

Kalm said the executive team and staff around him helped navigate those waters.

“What was really different to me was the finance side of it, which I wasn’t quite aware of, but I got some smart people next to me,” Kalm said. “They helped me through that.”

Greektown was sold to investors and later purchased in 2013 by Dan Gilbert’s Rock Gaming.

2. Board on the move to downtown Detroit

When Kalm was confirmed in 2007, the MGCB was headquartered in Lansing. Although the agency still has an office there, the headquarters is now in Cadillac Place in Detroit’s New Center Area on Grand Boulevard.

The key was to have the offices closer to Detroit’s three casinos, the main charges of the regulatory body.

In normal times, two of his deputy directors were in Detroit and two were in Lansing.

Because of that separation, Kalm said, some facets of communication actually improved for the executive team while they were stuck at home during the pandemic.

“My staff and I, every day, have a staff meeting,” Kalm said. “Our communication probably increased as a result of that, as opposed to when we were all in the office at different times.

3. Horse racing moves to MGCB control

The long story of Michigan horse racing is a sad and shrinking one.

In 2010, the regulation of the industry then fell to Kalm, who became the de facto horse racing commissioner after former Gov. Jennifer Granholm disbanded the Office of the Racing Commissioner.

Tracks continued to close across the state. Mount Pleasant Meadows closed in 2013, and Sports Creek Raceway in Swartz Creek stopped racing after 2014. Hazel Park Raceway closed in 2018, leaving Northville Downs as the only live track in Michigan.

Advance deposit wagering has provided a boost, but questions still linger about the long-term health of the sport.

Federal oversight of medical practices for the horses should help, Kalm said.

“The federal government doesn’t do a whole lot of things great, but it’s probably good that there’s standardization of the types of drugs and doping across the nation,” Kalm said. “Every oversight racing commission office does things a little bit differently, so some standardization is good.

“So it’s primarily positive. But I wouldn’t want it to overshadow the local racing commissioner too much that’s exercising the authority of the stewards, who knows a lot of the players and some of the issues that are occurring on the local level.”

4. MGCB takes charitable gaming under its purview

In 2012, the MGCB also took on Millionaire Party, or charitable poker, oversight.

Kalm put his law enforcement bona fides to work, cleaning up some bad actors in the space where charities host poker parties, hiring suppliers to help host games.

The prosecution and weeding out of suppliers wasn’t a popular stance at times, even for the charities themselves.

“The charities were just trying to make money for their organizations,” Kalm said. “It was just some of the suppliers who were shady, who were not giving the charity all the money they had coming. But we had unwilling victims. If the charities made $1,000, they were happy. Even though they made $9,000, they were taken to the bank, but they got their $1,000.

“So it wasn’t a very popular position to take. But really, all we did was apply the law like it should’ve been applied all along.”

5. Ads, revenue are still issues for online gambling

Kalm stayed on past his second six-year term to get online sports betting and internet gaming off the ground.

The January 2021 launch has been largely seen as successful, though low tax revenue from sports betting and the sheer amount of gambling advertisements are issues to keep an eye on, Kalm said.

“The law does not limit the amount of ads on the sports betting side,” Kalm said. “People keep calling us about it, and hey, we can’t stop people from advertising.”

Kalm said he believes that with casinos returning to full capacity soon, more cross-marketing will occur to get online casino customers into the halls.

“But I do think problem gambling is going to rear its ugly head in some fashion, and it’s going to have to be dealt with,” Kalm said. “We just don’t know yet in that regard.

“The industry is really positive. I just hope we have the right framework in place and that we can adapt. The Legislature has been very helpful, also. If there are any tweaks that need to be made to this, you might see that come up over the next year or two. Maybe limiting the types of games, limit the advertising or eliminate some of the write-offs.”

6. Kalm bullish on Williams as new director

Kalm worked closely with Williams and lauds his experience and expertise.

“I wholeheartedly endorsed him, and in fact, spoke on his behalf as director, because the leadership team pretty much stays in place,” Kalm said. “So I think he gets it, I really do.

“His background might not be primarily law enforcement, but he understands the need for that. He’s also our point person in dealing with the commercial casinos. He’s got a good relationship with them. That’s kind of our bread and butter. That’s where we started out.

“He tries to be very reasonable with them and has a business-friendly relationship. Because that’s how the two governors I worked for wanted us to be.”

7. Kalm hopes to stay in the gambling industry

Kalm said he’d like to stay active in the gambling sector, perhaps as a consultant.

“I’ll stay active somewhere in gaming, probably. I have no immediate plans. I just know that I love this industry, and after 14 years of being around it, watching it develop nationwide and statewide, I have a certain amount of knowledge that would be useful to others.

“We’ll just see where it all takes me.”