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Consultant says state needs better oversight for charitable gaming

State House Bureau

October 24. 2013 9:14PM

CONCORD — Charities and the state may not be realizing all the money they should from charitable gaming operations due to the lack of oversight, a consultant told the Gaming Regulatory Oversight Authority Thursday.

Maureen Williamson, who heads the regulatory advisory practices of White Sand Gaming, told the authority the state needs to make its charitable gaming statutes and regulations comparable to standards for resort casinos.

The absence of internal controls makes it impossible to determine how much money is bet at the privately operated charitable gaming facilities around the state, she said.



“The gaming public at these tables are entitled to the same standards and regulations as someone at a commercial casino,” Williamson said. “Charities get 35 percent of the revenue after costs for the game operator and the facility, but you don’t know that with any level of assurance.”



State law requires charities to receive 35 percent of the profits from the gaming operations, but some of the facilities that operate year-round with different charities sponsoring events charge charities for other costs such as paperwork, rent and security, reducing a charity’s share.



Williamson said the law needs to be clarified so that the charities do receive 35 percent of the profits.Paul Kelly, Racing and Charitable Gaming Commission executive director, noted his agency asked lawmakers to clarify the statute the last few years, but the House has killed the bill after the Senate passed it.



Last year about 300 charities raised $4.7 million at the 10 charity gaming facilities throughout the state.

Williamson also suggested the authority include other changes to charitable gaming regulations in its recommendations to the legislature.

The private operators of charitable gaming should be subject to full background checks by the Attorney General, she recommended, with the cost borne by the operator.

“Gaming is a privilege and a revocable privilege,” Williamson said. “It is a bargain you make with those who come into the sector. These are for-profit entities.”

Other suggestions included licensing the equipment sellers for roulette wheels and tables, dice and cards as they would be for a resort casino and to require independent surveillance systems with significant gaming activity.

If the state goes forward with expanding gaming, Williamson noted, it could use the opportunity to address the charitable gaming sector and bring it up to a single standard.

“The problem has taken a long time to develop,” Williamson said, “it will take a long time to fix.”

The state should not allow charitable gaming within a resort casino, she said, as Senate Bill 152 would have allowed.

The bill established one casino in the southern part of the state. It passed the Senate but was killed by the House.

She said there should not be two different standards in the same facility, noting the public will not make the distinction.

She was also critical of “redemption slot or poker machines” that are legal in “family entertainment centers” as long as the pay out is merchandise instead of cash or alcohol.

Many facilities stretch or even circumvent the law with some paying out in Visa cards, she noted. “Nothing governs the level of play with these games,” Williamson told the authority.

Although the machines are licensed at the local level, she said, there should be one standard throughout the state.



The authority also heard from the director of research and problem gambling for the Massachusetts Gaming Commission.



Mark Vander Linden told the authority his state will set aside between $15 million and $20 million annually for problem gambling programs and services.He said he is in the process of conducting a baseline study before the three resort casinos and one video slot machine facility open in the state.

He said the Massachusetts law requires the commission to make yearly adjustments based on the research.

He and others said outreach is needed for high risk populations such as casino employees, adolescents and the elderly.

Kathy Scanlan, former director of the Massachusetts Council on Problem Gaming, said, “We ask that you put as much effort into minimizing the harm as you do into maximizing the benefits.”

The authority meets again Thursday to work on its report.

The group must submit draft legislation by Dec. 15.

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