How is the Queen of Hearts game legal? (A quick explanation) - Cleveland 19 News Cleveland, OH

How is the Queen of Hearts game legal? (A quick explanation)

(Source: WOIO) (Source: WOIO)
CLEVELAND, OH (CNN) -

The Grayton Road Tavern Queen of Hearts game that drew in millions of dollars and tens of thousands of people is not regulated by anyone at the state or local level,  because it doesn't have to be. It's completely legal with the laws that are in place.


RELATED: Cleveland's 'Queen of Hearts' game put on hold pending opinion from Ohio Attorney General's Office


How is the Queen of Hearts Legal?

According to Dan Tierney, a spokesman for the Ohio Attorney General, many bars and restaurants in Ohio hold their own Queen of Hearts drawings. 

With $5 million at stake like last time, you might be surprised to hear that no one -- not even the Ohio Lottery -- tracks or regulates the drawings and there's a very specific reason for that. 

It comes down to how much of the money collected is given back to the eventual winner. 

"While each game’s status under law would be fact specific, the marketing promotions commonly known as “Queen of Hearts” games are often likely to be considered 'pools not conducted for profit,'" Tierney previously said. "Ohio law allows individuals and business to conduct monetary pools if 100 percent of the money collected is paid out to the winner."

In the case of the Grayton Road Tavern, 90 percent of the pot was given to the winner. The other 10 percent was used to start the next pool. 

This still falls under the realm of legal, because the bar does not take the 10 percent as profit. 

The Taxman Cometh

According to the Ohio Department of Taxation spokesman Gary Gudmundson, no money is taken off the top for taxes like it would be if it was through the Ohio Lottery or one of the state's casinos. 

"This is not a casino setting, so those regulations don’t apply," he said.

Where it will hurt is when it comes time to do 2018 taxes. 

The money will instantly put the winner in the State of Ohio's highest tax bracket, which is anyone making $213,350 or more.

"Presuming the winning amount exceeds $213,350, the winner would pay Ohio’s highest tax rate of 4.997 percent," Gundmundson previously said. "Tax would actually equal $8,178 + 4.997 percent or every dollar over $213,350."

Copyright 2018 WOIO. All rights reserved.

Powered by Frankly