Committee hears bill to allow slots at fraternal clubs

A bill to allow some charitable groups to use slot machines as a fundraising mechanism is being considered by leaders in the Senate.

The Senate Executive Committee – which includes the President Pro Tempore, the majority and minority leaders and the majority and minority caucus whips – was scheduled to hear public comments on Senate Bill 82 June 5.  Only two members were present to kick off the meeting, and the committee did not vote on whether to release or table the bill.

SB 82 would permanently legalize the use of slot machines in clubhouses of fraternal organizations, such as American Legions and AMVETS posts.  Under the bill, proceeds from the slot machines would be split by the organization and the state.

The state would receive 40 percent of the proceeds, with a portion going towards vendor costs, 1 percent going to benefit treatment for problem gambling and the remainder going into the general fund.  Secretary of Finance Tom Cook, who testified at the hearing, said the bill would create $1.5 million in state revenue each year.

Sixty percent of the proceeds from the slot machines would be kept by the organization, 40 percent of which must go to a charitable cause.  The remaining funds could be used for operational costs.

Under the legislation, each eligible group may have 10 machines plus one additional machine for every 70 members of the organization over 500. A maximum of 25 machines would be allowed in one venue.

Five members of the public testified in support of the bill; no one testified against it.  Tom Jones, of Dave Dolby AMVETS Post 2 in Long Neck, told the committee, “This bill was well thought out.”

Jones and several other members of Delaware fraternal groups began meeting with Cook and Greg Patterson, Gov. Jack Markell’s deputy chief of staff, to craft legislation to make slot machines legal in clubhouses where they had been in operation for more than 20 years.

In November 2012, many veterans’ groups 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.

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

Under HB 1, the state is taking 43.5 percent of the revenue from the machines, while the clubs take 56.5 percent.  SB 82 mirrors HB 1, but would allow the clubs to take slightly more of the proceeds from the slot machines.

If the General Assembly passes the bill, the 60-40 profit split between the organizations and the state would retroactively go into effect May 1.

Jones said Dave Dolby AMVETS have recently used money from the machines to raise funds for a Home of the Brave women’s shelter in Milford.

During the holidays, the club discovered an Iraq War veteran with a wife and two young children who were homeless, Jones said; one of the children required regular medical care.  He said AMVETS Post 2 and American Legion Post 28 were able to raise funds for food, clothing and shelter for the family.  “He is working now and supporting his family,” Jones said of the veteran.  “Remember, a veteran in need doesn’t want a hand-out.  They just need a hand up.”

Jones urged senators to support the bill.  “These organizations are to be commended for the work they do,” he said.  “Let these organizations continue to survive.”

John Mitchell, Junior Vice Commander for Department of Delaware Veterans of Foreign Wars, said the slot machine funds are integral to charitable donations provided by Delaware veterans.  “These machines have been in operation for many years,” Mitchell said.  “That money, I assure you, is not put in our pockets,” he said.  “We are putting money out into our communities.”

Russ Hall, a commander for Department of Delaware VFW, said members have given about 82,000 volunteer hours to their communities.  “We continue to serve, and that’s the common theme among every veteran’s organization,” Hall said.

A representative of Maryland, Delaware, D.C. Moose Association said a lack of funds last year meant Moose Lodges had to curtail donations.  He said if SB 82 were not passed, “The biggest loser would be our communities.”

Larry Waters, commander of Department of Delaware VFW, thanked the fraternal representatives and the state officials for their work on the bill.  “They hammered out something that’s going to work,” Waters said.  “Please pass this bill.”

The bill is scheduled to be brought to the Senate floor Tuesday, June 11, under a new number – Senate Bill 112.