Published: October 11, 2009 11:09 pm      

Gaming reforms eyed

Charities' officials concerned; will learn more at Tuesday night

Ashland — Local organizations that raise funds through charitable gaming say they have concerns about changes proposed by state regulators.

The organizations will get a chance to ask questions and voice their concerns to officials from the Kentucky Department of Charitable Gaming at 6 p.m. Tuesday at the Boyd County Fair Bingo Hall, 1760 Addington Road.

DCG officials have been touring the state for several weeks discussing their plans to introduce legislation to the 2010 General Assembly. The legislation will change current statutes to allow the agency to become the central point for contracting, purchasing and tracking the sale of bingo and pull-tab games.

The proposal calls for a bar code inventory system to monitor in real time the receipts, payouts and inventory of each licensed charity. The system would also track inventory from manufacturers through distributors to the organizations.

Officials claim the changes will save charities thousands each year and alleviate the burden of manual accounting.

Many of the 668 licensed charities statewide that raised more than $500 million in proceeds during 2006 aren’t so sure.

The leaders of two of FIVCO’s 14 organizations with licensed games are among the skeptics.

Yvonne Green, president of the Boyd County Fair Board, and John Jenkins, chief financial officer and director of operations at People Helping People, each have 20 years of experience in running charitable gaming operations. The fair depends on money raised through gaming to pay its mortgage and operate facilities year round. People Helping People uses gaming proceeds to help low-income residents purchase utilities, gasoline and food.

Green and Jenkins said they are worried the proposed changes will cost their organizations thousands more each year and could drive them out of business.

“I’m not entirely against everything. I do want them to explain to us how it’s going to work and what it’s going to mean to us and how we’re going to have to change everything,” Greene said. “I don’t want to just let it happen and find out it’s not what I thought it was.”

Jenkins said based on his research he opposes the changes.

“I think it’s going to just cripple (organizations). I think the bingo business will be over in Kentucky if this happens. The smaller ones will go down immediately and the bigger ones ...

“Michigan went to it and pull-tab and bingo sales dropped 75 percent If that happens we’re not going to have any money to give away. I’m going to tell the commissioner that at the meeting,” he said.

Jenkins and Greene said they worry with a single statewide distributor they would have to pay more for supplies — including additional freight costs — and would be unable to purchase the variety of games their players want.

“Right now I have 12 or 14 distributors,” Jenkins said.

Greene said she’s worried the $10,000 in equipment the fair recently purchased to process games won’t be compatible with the new system.

Both said they are concerned about the added expense of the new accounting system, which will require a terminal at each gaming location.

However, Greene said she thinks the accounting system charities use to report their earnings could be reformed.

“As of right now, they have a quarterly reporting system. If you put a figure in the wrong column you get a violation letter or a fine,” she said, “In the past I was actually fined $250 for a $20 addition error.”

Greene said it’s her understanding “the point of sale system, if it works the way it should work, would eliminate the quarterly reporting.”

But she still has reservations.

“If we have a problem in the middle of bingo on Saturday night are we going to be able to get an answer? They (state regulators) will be our only recourse,” Greene said.

According to Greene and Jenkins it’s not just the proposed changes that are upsetting charities. Many groups think they are being targeted by regulators, who believe they are not properly running their games.

“There is a bad taste in a lot of charities’ mouths because they think we’re crooked,” Greene said. “In the past charitable gaming has had the attitude that charities like us are crooked. We have to prove ourselves innocent.”

For example, Greene said she attended a meeting in Winchester at which commissioner Henry G. Lackey stated more than $1 million in illegal pull-tab games are sold each year.

“The charities are not where that is happening,” Greene said. “We have too much at stake. I would never sell an illegal pull-tab at our fairgrounds. No, most of these illegal pull-tabs are coming from people who are already crooked and the bars.”

Jenkins agreed.

“We keep a good honest game. Every nickel is accounted for,” he said.

CARRIE STAMBAUGH can be reached at cstambaugh@dailyindependent.com or (606) 326-2653.