Indiana Charities Want State to Ease Gambling Restrictions

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January 25, 2011; Source: TribStar | Efforts to curb gambling operations in Indiana that are either illegal or mislead people into thinking they're supporting charities are having the unintended effect of cutting off nonprofits from a potentially lucrative source of revenue. To ease those burdens, the TribStar says state lawmakers are considering bills that, among other things, would reduce fees churches and charities pay to hold raffles and allow these groups to pay workers a modest wage – less than $50 a week – to staff gambling events.

Current rules restrict who can run charity games, the amount that can be paid out in prizes, and how revenues from gaming can be spent. Some of the more arcane laws that lawmakers also hope to fix even prohibit anyone from dealing poker hands for a charity tournament. On the other hand, it's okay to deal if the game is euchre.

Ed Feigenbaum, editor of the Indiana Gaming Insight newsletter, told the TribStar, the state thought its gambling restrictions would protect charities from “circuit riders” – what the paper describes as "professional bingo operators charging charities exorbitant fees and fleecing the charities of profits."

Oddly, the money the state charges charities to conduct raffles can have the same effect as paying outsized fees to gaming operators. For instance, if a church builds a house to raffle off, they must pay an initial fee to the Indiana Gaming Commission. If they want to conduct a second raffle, the charity would be assessed a higher fee, based on the amount they raised the first time.

“You could end up paying in fees more money than you raised,” said state Sen. Carlin Yoder. “I don’t think that was intent of the regulations." For now, charities are betting their luck is about to change.—Bruce Trachtenberg