Corruption in charity games rampant due to inadequate oversight, lawmakers say
RICHMOND, Va. (WRIC) – Corruption in Virginia’s charitable gaming industry is rampant due to inadequate oversight and conflicts of interest.
Gary Opdyke, the bingo commissioner for the men’s club at St. Gregory the Great Catholic Church in Virginia Beach, said a lot was at stake for legitimate traders in what he called the “Wild West” of charity games.
âIt’s out of control,â Opdyke told the panel of lawmakers. “These unscrupulous operators, as I call them, are making it difficult and putting honest charities out of business.”
The chairman of the House General Laws Committee, Paul E. Krizek, said loopholes in state law are only exploited by the name of charities.
“It’s a real shame for the General Assembly because we have a Swiss approach to regulate this,” Krizek said.
According to Sen. Bryce Reeves (R-Spotsylvania), one of the results of ambiguous state laws is an increase in gaming machines known as electronic pull-tab devices.
Reeves said they have become more and more common in bars and restaurants since the ban on skill games or “gray machines” went into effect earlier this year. As business owners try to make up for lost revenue, he said charity games are popping up right next to gray machines now labeled with “out of service” signs.
Reeves said conflicts of interest between members of the Charitable Gaming Board are to blame for the expansion.
State law attempts to limit where charitable gambling can take place, but allows such activities in so-called âsocial neighborhoodsâ. Reeves accused the regulator of expanding the definition of a social neighborhood for the purpose of financial gain.
âThe regulatory council, in its own interest, has said that we can also have social quarters in bars and restaurants and this goes directly against the intention of the General Assembly. We don’t want to see the game in bars and restaurants, âReeves said.
Reeves said members of the subcommittee plan to introduce legislation to tighten the definition of social neighborhoods and increase penalties for violators, such as revoking liquor licenses.
In a recent report, The state watchdog agency found that 92% of electronic pull-tab devices were located in social neighborhoods in August 2021. This is important because operators are currently not required to report gross revenue to the state. for machines in these spaces, according to the Office of the Inspector General of the State. SOGI said these receipts are audited to ensure the money is being used correctly.
This SOGI report also found that six of the eleven current members of the Charitable Gaming Board had conflicts of interest.
It caused a stir recently after the chairman of the board of directors did not recuse himself from writing the rules for the Texas Hold ‘Em poker tournaments he could benefit from, according to the Virginia Mercury. This is another area where lawmakers are looking to crack down.
Additionally, Reeves said the committee is proposing legislation to strip the board of its regulatory authority to avoid future conflicts of interest. If passed, he said they would serve in an advisory capacity.
In the long term, Reeves said the state should create a new commission to oversee all gambling in the Commonwealth.
âOur job is not to pick winners and losers. It is about establishing a level playing field. The only thing we don’t want to do is see our charities decimated, âReeves said.
The Charitable Gaming Board could not immediately be reached for an interview. The Virginia Department of Agriculture and Consumer Services declined to comment.
VDACS Director of Communications Michael Wallace did not provide contact details for the board as requested.
âVDACS is not speaking on behalf of the Charitable Gaming Board with respect to the subject of your request,â Wallace wrote in an email. âTo comment, you will need to contact members of the Charitable Gaming Board directly. Their direct contact details are not available on our website.
The SOGI report also noted that VDACS does not have sufficient resources or authority to adequately enforce operator violations, which could increase the risk of fraud. He noted that 6 of the 14 charitable gaming staff positions are currently vacant.