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Charitable gaming bill introduced

SB 82 allows veterans’ clubs to keep 60 percent of profits
May 21, 2013
Legislators will consider a bill to allow charitable gambling at fraternal clubs with the General Assembly reconvenes Tuesday, June 4. BY KARA NUZBACK

Lawmakers have introduced a bill that would allow Delaware veterans’ groups to use slot machines as a permanent source of revenue.  Senate Bill 82, introduced May 14, would allow fraternal organizations in Delaware to operate slot machines in their clubhouses once approved by the Delaware Lottery.

According to the bill, organizations would receive 60 percent of the proceeds from slot machines after players are paid; at least 40 percent of the organization’s annual proceeds would have to be given to charity.

Forty percent of the profits from the machines would go to the state; 1 percent of the state’s cut would be set aside to fund programs for the treatment, education and assistance of compulsive gamblers and their families.

The legislation mirrors House Bill 1, which was passed in January and temporarily allows the clubs to use slot machines as a revenue source until Sunday, June 30 – the last day of legislative session.

For more than twenty years, profits from slot machines had been used by Delaware fraternal organizations to fund charitable donations.

In November 2012, many clubs received a letter from Delaware State Police, which said the machines were illegal and police would revoke the clubs’ liquor licenses if the devices were not unplugged.

Hundreds of members of American Legions, Veterans of Foreign Wars, Elks and Moose Lodges and other groups held a rally at Legislative Hall Jan. 10 to protest the sudden enforcement.

Greg Patterson, Gov. Jack Markell’s deputy chief of staff, and Secretary of Finance Tom Cook began meeting with representatives of veterans’ clubs to craft legislation that would bring the groups in line with Delaware law.

HB 1 was crafted as a temporary solution, and more than 30 fraternal organizations in the state have been licensed under the bill.  The state is currently taking 43.5 percent of the revenue from the machines, while the clubs take 56.5 percent.

The new legislation would allow the clubs to take slightly more of the proceeds from the slot machines.

Milton resident Tom Jones, of Dave Dolby AMVETS Post 2 in Long Neck, attended the meetings with Patterson and Cook.  Jones said he would prefer the organizations keep a higher percentage of the profits, but the groups are content with the bill.  “I guess we’re happy,” he said.

Under SB 82, Jones said, the state would pay slot machine vendors using its 40 percent cut, which means one less expense for the clubs.

If the General Assembly passes the bill, the profit split between the organizations and the state would retroactively go into effect May 1.

The bill also requires the clubs deduct money from the winnings of members who are delinquent on the child support payments. The legislation sets a deadline of July 1, 2014, for the organizations to be connected to the state’s central system for reporting and auditing.

Eligible organizations must have national affiliation or a membership consisting primarily of veterans honorably discharged or active duty service members.

Each eligible group may have 10 machines plus one additional machine for every 70 members of the organization over 500.

The bill has 24 bipartisan sponsors, including nine from Sussex County.

SB 82 awaits a hearing in the Senate Executive Committee.  Senate President Pro Tempore Patty Blevins, the committee chairwoman, is also a sponsor of the bill.