Temporary reprieve in Pennsylvania's gaming law
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Nelson Smith, a top American Legion official in Fayette County, summed it up tersely, "I think we made a lot of noise."
Veterans and fraternal groups made so much noise complaining about a new state law regulating raffles and other small games of chance that Gov. Tom Corbett decided to postpone the starting date for detailed club gambling reports for a whole year -- until February 2014.
"I'm happy -- this is a start," said Fayette County Legion Cmdr. Russell Miller. "If they don't change this new small games of chance law, there may not be an American Legion in Pennsylvania. It may become extinct. Many clubs are already operating on a shoestring."
Mr. Smith said the new law, officially called Act 2 of 2012, is "a mess. They need to do something to make things easier for us."
Frank Zadell, an American Legion official at Post 301 in Connellsville, agreed that Mr. Corbett's decision to delay the new reporting requirement was a good one. "It will give the state more time to research and rethink the effect of the new law on our clubs," he said.
A lot of state legislators from southwestern Pennsylvania -- including Reps. Peter Daley, D-Washington; Brandon Neuman, D-Washington; Deberah Kula, D-Fayette; and Rick Saccone, R-Elizabeth -- heard the club officials and joined in criticizing the new small games law.
Mr. Daley has vowed to try in the 2013-14 session to repeal Act 2, which regulates raffles, pull-tabs, punchboards and other small, non-casino forms of gambling. The law was signed by the governor in March. Mr. Daley this week applauded the decision for a year's delay in making detailed reports to the state Revenue Department.
"I thank Mr. Corbett for this freeze," Mr. Daley said. "The delay will be a relief for the thousands of organizations that rely on small games of chance to raise money for community services and programs," such as Boy Scouts, Little Leagues, local parks improvements and others.
Since the small games of chance law was enacted in 1988, thousands of fraternal clubs in Pennsylvania -- VFWs, American Legions, Elks, Moose, Sons of Italy, volunteer firefighters -- have used punchboards, pull tabs and other small-scale forms of gambling for two purposes -- helping to fund local community activities and charities and generating money to keep the clubs open by paying for utilities, rent, taxes, food, alcohol, and bartenders and other staff.
Technically, under the 1988 law, all of the gambling revenues were supposed to go to local charities, but since clubs were not required to submit reports to the state, no one knew how the money was actually being used at many organizations.
Rep. Sheryl Delozier, R-Cumberland, sponsor of the 2012 bill to tighten reporting requirements, said it would allow veterans clubs to keep 30 percent of the gambling profits for their internal operations while requiring them to give 70 percent to outside groups.
Legion officials want the 70/30 split changed, claiming it doesn't give clubs enough money to keep their doors open, especially when membership has been falling due to job loss in the poor economy.
Jim Killinger, a retired state trooper who is the American Legion adjutant in Fayette County, said in a phone interview, "The 70/30 split is a bigger problem than the new reporting that's required."
If clubs are allowed to retain just 30 percent of the gaming revenue, he said, many will be forced to close.
"We've got to have enough money for upkeep on the clubs," agreed Mr. Smith, the Fayette County vice commander.
Mr. Daley doesn't think the one-year delay in the reporting requirements includes a change in the 70/30 percent revenue split contained in Act 2.
However, he said he still plans this year to try to repeal the entire Small Games of Chance Act and "rework it from the beginning."
That would include changing the 70/30 split. Perhaps, he said, instead of 70 percent of the gaming revenue going to community groups, the fraternal groups could keep 70 percent, with the other 30 percent going to charitable organizations.
Not everyone is critical of the new small games of chance law.
Amy Christie, Pennsylvania Licensed Beverage Association director, said her members -- privately owned restaurant and tavern owners across the state -- supported the tighter reporting required by Mrs. Delozier's bill.
Ms. Christie contended that many of the nonprofit firefighter, fraternal and veterans groups have been "inappropriately using their small games revenues to subsidize their bar, restaurant and entertainment offerings, putting the state's [for-profit] family-owned businesses at a competitive disadvantage." She said her members wish they could offer customers small games of chance, too.
Supporters of Act 2 also point out that the law significantly raises prize limits on daily and weekly games. A club can award prizes of up to $25,000 per week instead of $5,000 and a person can win up to $1,000 betting on just one game, up from $500.
"The clubs wanted the increase in prize money and they got it," Mrs. Delozier said.
The additional reporting requirements were intended to "hold these charitable organizations accountable for the funds they raise to support community causes," Ms. Christie said.
She said small business owners want Mr. Daley to let the new small games of chance law go into action -- and gauge its effects -- before trying to repeal it.
First Published January 10, 2013 4:58 am