-- — INDIANAPOLIS – An Indiana House committee wants to take a long look at some of the rules governing the charity gaming events that generate more than $500 million dollars annually for nonprofit organizations across the state.
Among the questions they want answered is how much the state may lose in excise taxes and licensing fees if the Legislature rolls back the amount of money that charities have to pay to play the games of chance.
Also of concern: How to modify rules put in place just a few years ago to curb the illegal gambling schemes that had been operating under the guise of charities.
“When you attract the kind of money that charity gaming does, you may not always attract people who have the best interests of charity at heart,” said Rep. Bill Davis, a Republican from Portland, who chairs the House Committee on Public Policy.
On Wednesday, Davis’ committee amended a Senate charity-gaming bill aimed at easing the impact that the state’s 2006 charity gaming rules have had on churches and community organizations.
The amendment would establish a summer legislative study committee to look into several aspects of the rules passed in 2006, including the fees charged to charities to hold bingos, raffles, card tournaments and other gambling events conducted to raise funds for charitable causes.
The study committee would also take a look at a proposed change of law that would allow organizations to pay their members a small stipend to work at their charity gaming events.
The amended bill passed out of committee on 10-0 vote. It now goes to the full House for a vote.
Portions of the Senate bill were left intact. A key one: Fees charged to charities to hold gaming events would be based on the revenues generated by the game of chance, and not by other activities related to it, such as ticket sales for a dinner held in conjunction with a raffle.
Under the current law, a charity could sell $500 worth of raffle tickets and $200,000 worth of dinner tickets, but would be charged a gaming-license fee based on the entire amount, Davis said.
The original Senate bill, co-authored by Sen. Carlin Yoder, a Republican from Middlebury, was aimed at what he called the “unintended consequences” of regulations put into place in 2006.
Those regulations were instituted to protect charities from professional bingo operators charging charities exorbitant fees and fleecing the charities of profits.
Supporters of those original rules, including state Sen. Jean Leising, a Republican from Oldenburg, said those rules now need to be revisited to make sure they aren’t negatively impacting churches and charities.
Charity gaming brings significant money to the state’s coffers.
The Indiana Gaming Commission, which regulates charity gaming, collected more than $4.2 million in fees and penalties in fiscal year 2010.
In addition, the charity gaming excise tax brought in another $1.25 million to the state last year.
Meanwhile, the amount of charity gaming is also growing. The state gaming commission issued 2,604 charity gaming licenses in fiscal year 2007; in fiscal year 2010, the number was more than 3,400.
While the amount of money generated by the charity gaming events was more than $530 million last year, only a fraction of it, about $76 million, was profit. Much of the rest goes for prize money and administrative and operational costs, according to gaming commission reports.
In addition, about one-fourth of the charitable organizations with bingo licenses reported losing money in fiscal year 2010.