Stopgap solution to slot machine ban proposed

Veterans, fraternal organizations would be able to resume operation until June
January 23, 2013

Lawmakers announced Jan. 22 a proposal designed to temporarily allow veterans and fraternal organizations to continue operating video lottery machines until a more permanent solution can be crafted.

Last fall, enforcement officials shut down slot machine operations at numerous veterans and fraternal organizations’ clubs, which were in violation of state law. The groups petitioned state officials, noting that the revenue generated from the slots helped fund programs and events that directly benefited veterans, schoolchildren and other residents through various outreach efforts.

The draft measure would provide a temporary solution to the problem by allowing veteran or fraternal groups that have a national affiliation or whose membership consists of veterans honorably discharged or active service members to operate up to 20 video lottery machines.

Under the terms of the bill, the machines must pay out to players between 50 and 70 percent of each dollar put into them. After that payout, organizations would be required to pay 43.5 percent of the proceeds to the state. That is the same percentage that Delaware’s three casinos pay to the state under current law.

The bill would sunset on June 30.

“This isn’t a perfect solution, but it’s a step in the right direction to get these service organizations back on their feet financially and helping the people who need it most through the groups’ charity,” said Rep. John C. Atkins, D-Millsboro, who will sponsor the measure. “It’s veterans helping veterans, and veterans helping our youths and communities.”

Under the proposal, the state lottery director would need to approve all locations and the machine vendor being used. The organizations would be required to provide a monthly report to the Delaware Lottery office of all revenue from the machines.

House Speaker Rep. Pete Schwartzkopf, D-Rehoboth Beach, said the proposal is not ideal, but it is critical to get something in place this week before the General Assembly takes its six-week break for budget hearings. Doing nothing, he said, would leave the veterans and fraternal organizations in the lurch well into March.

“This is a stopgap measure that gives us a little more breathing room to work on a more permanent solution rather than rushing to get something done,” said Schwartzkopf. “None of us wants to see these nonprofit groups unable to continue the many good works they have performed over the years for our veterans, children and other Delawareans. By putting a temporary fix in place, it will allow us to work out a good solution to this problem.”

The measure is expected to be introduced and considered by the full House Wednesday, Jan. 23.

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