Veterans’ groups fundraising threatened by crackdown

Delaware veterans’ groups and some private organizations got an unpleasant surprise for Veterans Day — one that could severely impact their fundraising. The Department of Homeland Security (DSHS) is eying the unlicensed video slots commonly located in private clubhouses.

Groups who didn’t receive the form letter Friday, Nov. 9, expected it by the following week. Sent by the DSHS divisions of Alcohol and Tobacco Enforcement and Delaware State Police, the letter said DSHS was made aware that a number of clubs and businesses allowed those games in their establishments. It listed Delaware gambling laws, but the implied message seemed clear to Jim Gallagher, commander of American Legion Post 28 in Millsboro.

“If they walk in the door and those things are turned on, you’re screwed,” Gallagher said simply.

American Legion Post 24 in Dagsboro is one of many veterans’ organizations that have video slots. Only the 550 members can access the club with the swipe of their access key. Inside, 12 screens with different games are located along one wall, where players can try their luck.

Commander Billy Hitchens said Post 24 owns no gambling equipment. All the games are leased and serviced by an outside vendor.

However, all video lottery machines must be owned or leased by the State, according to Delaware State Code Title 29, Chapter 48. Those machines and table-games equipment are subject to state control and may only be used with permission from the lottery office. Video lottery machines may only be located within an existing casino/racetrack property.

Violators could be fined thousands of dollars.

The letters stemmed from several citizen complaints regarding the increase in the presence of slot machines in various venues in Delaware, according to the Department of Homeland Security.

“In response to those complaints and subsequent on-site visits by law enforcement, the Attorney General’s Office was consulted and advised that, under the current law, most of the machines were clearly illegal under Delaware law,” said Lewis D. Schiliro, Secretary of Safety and Homeland Security.

“Rather than take immediate enforcement action, we decided to send a letter to known venues, advising recipients of the potential issue regarding the use of these gambling devices,” he said. “While we fully recognize that some of the locations have very important charitable purposes, the nature, payout and regulation of these gambling devices creates an enforcement issue.”

“Our position is we should be exempted because our organization’s a special-needs association,” said Tom Jones, judge advocate for David C. Dolby AMVETS Post 2 in Millsboro. “[Veterans] look at it as a donation because, if they lost, it comes back to the club.”

The veterans groups say they have had video slots games for so long, they don’t remember what they did to get them.

“We were always led to believe by different representatives of our government, ‘Don’t worry about it. You guys are OK. Nobody’s going to mess with you.’ And that’s what we’ve heard over the years,” said Gallagher.

State Rep. John Atkins (D-41st) met with several local post commanders to discuss the situation on Monday, Nov. 12, when government offices were in official observance of Veterans Day.

“The State does not want to hurt these facilities,” Atkins said. “It’s just a loophole in the law that’s been out there for all these years, and now somebody has decided to finally address it.”

As vice-chair of the House Veterans Affairs Committee, Atkins estimated that some machines may have been in place for 15 or 20 years, so either the gambling law or enforcement has long overlooked the clubs.

“To my knowledge, a lot of legislators were not even aware [of the exact regulations]. They assumed that, because they were a non-profit service organization, they were exempt,” said Atkins.

“Our money is charitable,” said Hitchens. “We’re not allowing outside people. It’s just for our members only.”

There are more than 50 veterans’ organizations in Delaware, and there is no telling how many of these and other groups might have games of chance in their meeting places. Post 28 has approximately 18 video game machines in a building that serves more than 5,000 members. Post 2 has more than five machines for more than 1,800 members.

“It allows us to put the lights on,” said Gallagher. “You have to rely on them because people aren’t going out in the droves like they used to for dinner. … You see those numbers starting to dwindle because people just don’t have the money.”

Thus, he said, gaming becomes more important for veterans to support each other. Slots are not the Legion posts’ biggest fundraiser, said Hitchens and Gallagher, but it allows them to hire day-to-day employees.

“We’re not in the slot business. It’s just another branch on the tree that supports us,” said Hitchens. “Just like anything else, it’s a fundraiser. It helps keep our organization going.”

From weekly chicken barbecues to crab feasts and much more, veterans fundraise year-round to support themselves and the community.

“We need those machines, in one respect, to help us keep our building. We’ve got a heck of a mortgage,” said Hitchens. “It’s a real big thing, and every dollar means something to us. Every dollar counts.”

With each dollar that goes in to the machines, they argue, the veterans’ groups support each other and the community. Post 28 alone supports troops, Boys and Girls State, scouts, scholarships, the Home of the Brave, Thanksgiving for Thousands, Relay for Life, Veterans Relief Fund, American Legion baseball and much more. They’ve helped repair homes and provide people with heaters.

If gaming revenues are lost, Gallagher said, “It’s the veterans that are going to suffer. If we’re not there to help them, who’s going to pick them up?”

The veterans’ groups don’t fall under charitable gaming exemptions because their games are video slots.

The Delaware Board of Charitable Gaming permits veterans’ organizations, volunteer fire companies, religious groups and other charitable organizations to host games of chance. However, that exemption excludes slot machines, roulette and craps. The Board regulates bingo, raffles, Texas Hold’em poker tournaments and similar games. Groups must get permission before hosting the games.

Atkins said state police are in a tough position now that the issue has been raised but that he hopes law enforcement will hold off on enforcement action for another month, until legislators can address gaming in January.

“There’s a lot of us who are looking at drafting some sort of legislation to close these loopholes, to allow these veterans organizations to continue giving back to the community,” said Atkins.

Atkins expressed gratitude on behalf of the many retirees who depend on veterans’ groups and taxpayers who benefit from charity services. He suggested that service organizations with existing games could gain protection under a grandfather clause. He said he planned to contact legal counsel, the Governor’s Office and other legislators about the issue. The Delaware General Assembly returns to session on Jan. 8, 2013.

Because out-of-state venues could slip gambling devices into Delaware with little regulatory oversight, Schiliro said this is an appropriate topic for legislative debate, to ensure the appropriate control and safeguards of gaming devices in Delaware.

“Certainly we’re going to sit down as a collective group and come up with some ideas,” Atkins said.