Charitable gaming is declining

It has been 16 years since Kentuckians voted 2-to-1 to update our constitution so that charities could offer games like bingo and raffles to raise money.

Since then, Kentuckians have shown a ready willingness to help out.  In fact, more was raised via charitable gaming last year – $489 million – than was wagered on horse racing, which brought in $470 million.

Charitable gaming can come in many forms, whether it is bingo, raffles, or popular pull-tab events, which account for three out of four charitable-gaming dollars.  Those that benefit include churches, veterans organizations, fire and rescue departments and youth-oriented groups like bands and sports associations.  All told, more than 730 organizations are licensed.

Comparisons pitting Kentucky against 34 other states that report their data found that we were fourth in 2006 in the amount raised and fifth in the amount charities got to keep.  In 2007, that totaled $52.3 million.

While that is good news, the numbers are trending downward for charities, undoubtedly due in part to the economy.  In 2001, charitable gaming in Kentucky brought in almost $120 million more than it did in 2007, and attendance declined from 5.4 million people to 4.3 million.  Between 2003 and 2007, 41 counties saw attendance dip by at least 10 percent, while just 17 saw growth of 10 or more percent.

There has been some discussion about what might happen to charitable gaming if voters legalized other forms of gaming.  A report last week by the state’s Auditor of Public Accounts said this is hard to predict.  West Virginia, for example, only saw a relatively small decline in its charitable pull-tab revenues after it expanded gaming at its race tracks.

Given the hundreds of millions of dollars at stake, the auditor’s report recommended greater oversight of charitable gaming organizations – audits are generally done only after a complaint – and keeping a closer eye on volunteers to limit the criminal opportunities some unfortunately may take.

The report did note that Kentucky is unique among the states when it comes to charitable-gaming regulation.  The Kentucky Department of Charitable Gaming is a stand-alone agency, and it is entirely funded from the license fee charities pay.  Most importantly, state government doesn’t receive a dime beyond the regulatory expenses.  Other states take anywhere from hundreds of thousands to millions of dollars for unrelated government programs.

Around the time the auditor’s report was released, Governor Beshear put pressure on another form of gambling: off-shore Web sites that offer betting that is illegal in the state.  This is an ongoing matter in the courts, but it appears that the administration’s efforts could lead to many of these Web sites complying with Kentucky law.

If you have any thoughts or concerns about these issues, or any other affecting state government, please don’t hesitate to contact me.  My address is Room 351C, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.

You can also leave a message for me or for any legislator at 800-372-7181. For the deaf or hard of hearing, the number is 800-896-0305.

I hope to hear from you soon.

Representative Rick Rand