Small Games of Chance

[melody]

If they would have just listened to us when they were working on this last year, instead of letting LE write the language....we would already have these changes. But I guess its better late than never. Hopefully, we can get these changes implemented early next year, and it won't take them 2 years to do it.

[galthatfishes]

Yeah! Senator Folmer offered a good bill on SGOC a while back. Their office was very easy to deal with on changes.

[Dutch]

Well, that would make my club able to have a ticket, if they wanted to.

[galthatfishes]

This is yet another example of why all clubs should belong to the PFSC if they can afford to Brad. Gary has been working on this bill for months.

[melody]

SB 444 Amends Local Option Small Games of Chance Act Earll, Jane
Oct 15, 2012 - H-House concurred in Senate amendments to House amendments by a vote of 182 YEAS 12 NAYS

This one's gone back and forth so many times, but I think it's now ready to go to the Governor.

[melody]

House OKs small games changes, sends bill to the governor.

The House approved changes to the Small Games of Chance law Monday to allow some major league sports teams to hold 50/50 drawings for charity. Senate Bill 444 also eliminates the annual reporting and background check requirements for clubs whose small games proceeds of $2,500 or less. The amendment also would give county district attorneys discretion in allowing eligible organizations to conduct small games of chance at locations other than the licensed premises, in case of a natural disaster, fire or other circumstances. The measure was approved 182-12 in the House. It passed the Senate earlier this month 46-3.


Doesn't clear up many of the problems we are still trying to deal with, but it's a small start.

[dennyf]

Small enough to have little impact on the real problems with this foolishness.

[melody]

Not sure why they are still introducing legislation when there's no session days left.... So this one will need to be reintroduced next year, and will thus have a new bill number...but we have a sneak peak at the language to expect. (Language that left out "sportsmen".)

HB 2723 By Tobash. Amends the Local Option Small Games of Chance Act further providing for definitions, for regulations of department and for licensing of eligible organizations to conduct games of chance.

www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2011&sind=0&body=H&type=B&BN=2723

[melody]

CHARITABLE CLUBS SAY GAMBLING SUSTAINS THEM

According to an article in the Pittsburgh Tribune Review, legislators thought they were helping earlier this year when they passed a law that increases prize limits and allows veterans clubs to keep 30 percent of their gambling proceeds. For clubs that say they’ve been keeping the money all along, unaware they were supposed to give it all away, the new law is a hindrance more than a help. “We can’t afford to operate the way the state wants us to run these,” said Russ Miller, commander of Connellsville’s American Legion Post 301. “They want you to spend the money at the casinos, not here.”

Click here to read the Pittsburgh Tribune Review article: triblive.com/state/pennsylvania/2817671-74/games-law-chance-clubs-legion-miller-american-post-proceeds-veterans#axzz2AB7jqpgM

[galthatfishes]

Pretty much sums up what most small clubs are going through around the state.

[melody]

Mrs. Delozier said she's puzzled by the outcry. "The bill had a wide base of support from both Republicans and Democrats," as well as from the governor. She said the final bill was a compromise based on talks with legislators, the veteran and fraternal groups, district attorneys, the attorney general's office, state police and county treasurers, who issue the small games of chance permits to the clubs.

They might have had "conversations" with all those groups, but they basically left the state police write the bill. All our concerns were just basically blown off.


Game fundraisers facing state law requiring oversight, better records

December 13, 2012 4:53 am
By Tom Barnes

www.post-gazette.com/stories/local/neighborhoods-west/game-fundraisers-facing-state-law-requiring-oversight-better-records-666156/

A new state law regulating "small games of chance" is prompting a large uproar from veterans, fraternal and firefighter clubs, who use such small-scale gambling to raise funds to run their organizations and give aid to local charitable groups.

Several Pittsburgh-area legislators are leading the charge to repeal the law's new record-keeping and reporting requirements, reports that must be sent to the state starting in February.

Rep. Peter Daley, D-Washington, and other critics say many fraternal clubs -- Veterans of Foreign Wars, American Legion, AmVets, volunteer firefighters, Elks, Moose and Sons of Italy -- lack the staff to compile records and will have to increase operating costs, meaning less aid to the community, such as food banks, youth groups and park improvements.

One new requirement will force clubs to keep records of the names and address of anyone who wins more than $100 and also to withhold income taxes on winnings and send them to the state. They would also have to report the total amount won by bettors each week.

Mr. Daley said the clubs would be hurt financially by the new regulations on the "small games of chance," such as sales of raffle tickets, picking numbers from "punchboards" and buying sealed tickets called "pull-tabs."

Before legislators voted on the bill in January, "nobody sat down and looked at all the issues and how it was going to affect the clubs," said Russell Miller, Fayette County American Legion commander, whose club is in Connellsville.

He wrote a Nov. 25 letter to Legion district officials and said the small-games law "is hurting numerous veteran clubs. ... Many of our posts in District 24 are on the verge of closing because they aren't making enough money to pay utilities, wages and other overhead."

Mr. Miller said the new law adds to the damage the poor economy has done to the fraternal clubs.

Mr. Daley claims the law "wasn't properly vetted with fire and fraternal groups" before being approved in January, adding he has collected 4,000 petition signatures demanding changes.

The controversial measure, House Bill 169, was sponsored by Rep. Sheryl Delozier, R-Cumberland, in an effort to help the fraternal clubs by making the small games of chance more lucrative and attracting more bettors. She said it has already helped two clubs in her House district, just west of Harrisburg.

One major change the law made is to raise the clubs' prize limits to as much as $25,000 per week (up from $5,000), although only the larger clubs can manage so much betting. An individual can now win $1,000 on one game, up from $500, the limit set in 1988 when the original small games of chance law was enacted.

"The clubs wanted the increase in prize money, and they got it," Mrs. Delozier said.

Similar bills were introduced in the past five sessions but died. She, however, got HB 169 passed easily in the House in January on a 178-10 vote. Gov. Tom Corbett signed it in February but the first reports aren't due until February 2013.

Mrs. Delozier said she's puzzled by the outcry. "The bill had a wide base of support from both Republicans and Democrats," as well as from the governor. She said the final bill was a compromise based on talks with legislators, the veteran and fraternal groups, district attorneys, the attorney general's office, state police and county treasurers, who issue the small games of chance permits to the clubs.

She said the governor and law enforcement officials said that with the large increase in prize limits under the new law, better accounting was needed to show who placed the bets, how much each person won, how much a club was keeping for its own operation and how much money was actually going to benefit community groups.

She said the law makes a serious increase, from $5,000 a week to $25,000 a week, in the amount of small-games-of-chance tickets a club can sell.

"I know some clubs don't like the new reporting requirements, but with a five-fold expansion in betting, we wanted to make sure the money was properly accounted for," Mrs. Delozier said.

Mr. Daley and Pittsburgh-area legislators such as Sen. Tim Solobay and Reps. Ted Harhai, Jesse White, Rick Saccone and Brandon Neuman, will try to change the new law when the 2013-14 legislative session opens in January.

Some local veteran and fire organizations have said their statewide groups didn't fully explain all the bookkeeping effects of the new law and thus clubs didn't press legislators to vote against it. "I don't think legislators realized what they were doing," Mr. Miller said.

The new law also prohibits raffle tickets to be sold at convenience stores or bars if employees there don't belong to the particular sponsoring organization. Sometimes club members have dropped off raffle tickets at bars or stores for sale by clerks, but that must stop under the new law.

Another problem, Mr. Miller said, is that the new law limits -- to 30 percent -- how much of the raffle ticket funds a vets or fire club can keep for its own use. The other 70 percent of the raffle ticket sales must go for community-benefit organizations.

"The 70/30 [split] is not working," said Mr. Miller. "Many of our posts are on the verge of closing. The law should be changed to benefit the clubs. Lawmakers want to amend the law when they return to session in January."

Mrs. Delozier said the original 1988 "small games" law didn't allow the clubs to keep any percentage of the money, other than what they needed to cover operational expenses. So putting the 30 percent into the bill guarantees them a certain amount by law, she said. But Mr. Daley insisted he's been deluged with complaints, which he said "should be a real eye-opener to all of my colleagues in Harrisburg."

Mr. White said that because the first new reports are due to the state by February, "The clock's really ticking on this. Hopefully we'll show up in 2013 with bipartisan energy and help these clubs, fire departments and veterans organizations, who do good work in their communities."

[dennyf]

Just the usual disconnect between what should've been done and what the General Assembly did. Now and then they get it right, despite themselves.

Most of the time their "improvements" result in things going the wrong way.

We're really only ever safe, when they're not in session.

[davetm]

Dec 13, 2012 18:10:27 GMT -5 melody said:

One new requirement will force clubs to keep records of the names and address of anyone who wins more than $100 and also to withhold income taxes on winnings and send them to the state. They would also have to report the total amount won by bettors each week.

Are you saying this is in the new "proposed" law. Because it sure isn't in the current amended law. If it is, please show me chapter and verse!!

Dec 13, 2012 18:10:27 GMT -5 melody said:

The new law also prohibits raffle tickets to be sold at convenience stores or bars if employees there don't belong to the particular sponsoring organization. Sometimes club members have dropped off raffle tickets at bars or stores for sale by clerks, but that must stop under the new law.

I think you have this Arse-backwards. The current amended law essentially divides or defines SGOC into two categories. The first is defined as "Drawings" which would include items such as 50-50 club chances. These 50-50 ticket sales are limited to members only.

But "Raffles" as defined under the new SGOC law, are permitted to be sold to the general public and the record keeping must be followed in accordance with the amended SGOC law. This requires the ticket stub to be kept by the "eligible organization" or the "Club" ( a "Club" as defined under the SGOC is a 501(c) organization that owns a liquor license.) An "eligible organization" is all other 501(c) organizations that do not own a liquor license.

So, an Eligible Organization can sell a "Raffle" or a ticket that is determined to win from the Pa. Lottery, or a Club drawing where the winner need not be present, to any member or non member other than an Officer of the Eligible Organization.

"Clubs" Also know as "Eligible Organizations that own a liquor license" can sell "Raffle Tickets" also known as a ticket that will win based upon the drawing of the Pa. daily lottery number, to the general public, but the "Club" is permitted to use only 30% of the net proceeds towards operating expenses of the Club. The remaining 70% must me either used towards civic purposes, or given to another 501(c) organization that is for a civic purpose.

But a fundraising ticket can be sold to the general public by a "Club".

[melody]

Dave, along with the new law, the Department of Revenue has the authority to develop regulations to implement and enforce the law according to their interpretation.

From Law Enforcements Power Point Presentation:

REQUIRED RECORDS
(CONTINUED)
RAFFLES
• Record for each raffle should include:
–Gross proceeds received.
–Expenses.
–List of merchandise, prizes and their receipts.
–Names and address for all winners over $100.
–Cash value of all prizes.


The $100 threshold is repeated for all the other types of SGOC formats.

[davetm]

Dec 14, 2012 17:15:08 GMT -5 melody said:

Dave, along with the new law, the Department of Revenue has the authority to develop regulations to implement and enforce the law according to their interpretation.

Yeah....well "their interpretation" can't be unreasonable or out of line with the intent of the law.

Dec 14, 2012 17:15:08 GMT -5 melody said:

From Law Enforcements Power Point Presentation:

REQUIRED RECORDS
(CONTINUED)
RAFFLES
• Record for each raffle should include:
–Gross proceeds received.

That's pretty easy. Number of tickets sold x ticket price.
–Expenses.[/quote]

Dec 14, 2012 17:15:08 GMT -5 melody said:

–List of merchandise, prizes and their receipts.

That's easy. It's usually listed on the ticket. If it's other than a cash prize, the organization has a receipt for the prize value from it's purchase, if it's cash....then it's cash and the "net" deposit into the bank account reflects this.

Dec 14, 2012 17:15:08 GMT -5 melody said:

–Names and address for all winners over $100.

Remember, this information has to be kept on file by the organization. It does not have to be submitted to the State. And for the most part, names are usually written on the stub that is turned in.

Dec 14, 2012 17:15:08 GMT -5 melody said:

–Cash value of all prizes.

Again....cash is cash. And prize values are based upon what the organization paid for the prize.

Dec 14, 2012 17:15:08 GMT -5 melody said:

The $100 threshold is repeated for all the other types of SGOC formats.

Yup.....repeat above and rinse on a daily basis.

[melody]

GROUPS GET EXTRA YEAR TO COMPLY WITH SMALL GAMES LAW

According to an article in the Pittsburgh Tribune Review, clubs and fraternal groups that run small games of chance will have another year to file onerous financial reports and some lawmakers plan to use the time to repeal or fix the law they approved last year. The Department of Revenue said the Feb. 1 deadline for the organizations to file annual reports will move to Feb. 1, 2014, said spokeswoman Elizabeth Brassell. The Department of Revenue, an agency under Gov. Tom Corbett, is designated to collect and house the reports. Click here to read the Pittsburgh Tribune Review article.

triblive.com/news/adminpage/3227833-74/law-reports-clubs#axzz2Gues7lPx

[dennyf]

Great way to "deal" with a cluster: Extend the deadlines for complying.

[davetm]

The article is a little vague on exactly what "fix" means. If it means "repeal" and go back to what they did before....which was nothing, that's what the "Clubs" (those with liquor License) would love to see. But their counter-parts (Those taverns who are "Taxable entities") probably see it a bit differently.

And I'm pretty sure (well I know from the whining I've heard) that the small not-for-profits are whining about the record keeping, and the fact that even with the raised prize limits, most not-for-profits who run raffles (that's the laws word for "tickets"), the ticket prize is worth more than the $1,000 limit that the "now new and improved" law allows for.

Yeah.....it's a cluster. Who came up with this light bulb of an idea anyway?

Dave

[melody]

Now we are getting somewhere!

Co-Sponsor Memo:

January 3, 2013 10:43 AM
Sen. Timothy Solobay
Small Games of Chance Amendments

In the near future, I plan on introducing legislation that would amend the Local Option Small Games of Chance Act to address concerns recently raised by many organizations that use games of chance to raise funds.

My bill would increase the portion of proceeds from games of chance that a club licensee may keep for operating expenses from 30% to 50%.

Since many of the organizations that conduct games of chance rely on volunteers to operate, my legislation would also exempt smaller organizations from burdensome new reporting requirements if they make under $100,000 a year from games of chance.

Other significant provisions of this legislation would allow monthly drawings, Chinese auctions, Night at the Races, coin auctions, and other events and games that many organizations have hosted for years.

Local law enforcement and county licensing authorities would be responsible for violations of the law.

Additionally, this legislation will:

- allow organizations to limit the prize of a daily and weekly drawing
if the winner is not present at the time of the drawing;

- permit eligible organizations to use the premises of another
licensed organization with proper notification of the district
attorney;

- allow raffle tickets to be sold outside of the county of where an
organization is located;

- enable non-organization members to sell tickets with written
consent of the organization's officers;

- clarify that a club licensee's charity events, scholarship programs
and other philanthropic events are valid public interest purposes;

- and require background checks with the license application only
when there is a change in the organization's leadership or an
individual is the subject of criminal history information.

The primary purpose of allowing of small games of chance has all along been to assist veterans' clubs, volunteer fire companies, and other nonprofit associations raise money for charitable or civic purposes.

While Act 2 of 2012 was meant to aid these organizations in this goal, it has unfortunately resulted in widespread confusion and hardship. With many of these organizations now struggling to make ends meet, the changes above would help them survive and ensure that their significant contribution to the local community continues.

[melody]

HCO 839 By Brooks. Provides for small games of chance revisions.

* January 17, 2013 04:46 PM
* Rep. Michele Brooks
* Small Games of Chance Revisions
*
* Since the passage of Act 2 of 2012 (Small Games of Chance), many of us
* have been contacted by the various clubs and organizations in our
* districts with concerns regarding some of the changes that were made.
*
* Shortly, we plan to introduce legislation that should remedy some of
* these concerns and help our organizations. We are proposing to:
*
* - Clarify the definition of public interest purpose to make it clear
* that an entity operating solely in the public interest has the ability
* to retain the money for their own charitable purposes;
*
* - Add new games such as Chinese auction (selective raffle), quarter
* auction, Night at the Races, Texas Hold 'em (defining it in a manner
* that the game can only have an entrance fee to play and there is no
* award of money for the play of the game) and vertical wheel (chuck a
* luck, big wheel);
*
* - Permit Department of Revenue to approve new small games of chance
* per regulation with statutory guidelines;
*
* - Clarify when proceeds need to be expended for public interest by
* changing it from same calendar year to 12 months from when the proceeds
* were received;
*
* - Include that annual report form will be available in paper format
* and can be filed by mail;
*
* - Clarify that an organization may hold their small games at another
* organization's licensed premise and each organization can operate games
* at the same time (For example, if a VFW wants to operate their games,
* they can still rent out their banquet room to another organization
* holding a fundraiser simultaneously);
*
* - Change secretary to treasurer for those who need background checks;
*
* - Eliminate the need for a limited occasion license (see below for new
* licenses);
*
* - Clarify the license process and requirements based on the amount of
* proceeds an organization receives from small games of chance. There
* will be two licenses -
*
* - An organization making less than $40,000 a year in proceeds from
* games of chance will pay $25 for their license. This license will
* allow them to operate all the current small games of chance, and also
* exempt them from annual reporting, background checks and separate bank
* accounts for their proceeds.
*
* - An organization making more than $40,000 a year in proceeds from
* games of chance will pay the current license fee of $100 for a license.
* The license will allow them to operate all the current small games of
* chance, but will be required to report annually, submit to background
* checks and keep separate bank accounts for their proceeds.
*
* - Provide that club licensees may retain the first $40,000 in small
* games of chance proceeds for their own use. Once the $40,000 has been
* retained by the organization, the current 70/30 split of proceeds
* between public interest purposes and general operating expenses begins;
*
* - Clarify that Liquor Control Enforcement (LCE) does not have
* enforcement powers over small games of chance violations with
* organizations that solely have a special occasion permit under the
* Liquor Code. LCE would retain enforcement power over any Liquor Code
* violations of these organizations;
*
* - Change the following regulation record keeping requirements:
*
* -Increasing from $100 to $600, the requirement that an organization
* must record the name and address of a winner. This will align with the
* $600 federal requirement for the organization and winner to report to
* the IRS.
*
* -Eliminating the requirement that an organization must obtain receipts
* for all donated items.
*
* The changes we are proposing are beneficial to all organizations,
* whether large or small. We greatly value the contributions these
* organizations make to our communities.
*
* We hope you can join us in co-sponsoring this legislation.

[melody]

SB 144 By Kasunic. Amends the Local Option Small Games of Chance Act further providing for regulation of department, for licensing of eligible organizations to conduct games of chance, for club licensees and for distribution of proceeds.


Looks like its going to be another battle of egos to see who gets credit for 'fixing' the problems.

[davetm]

From what I see on the above "list" it still appears the record keeping for those organizations that do a lot of "heavy selling" will increase.

I'm not saying that's a bad thing, I'm just pointing out that the "fix" doesn't put it back to the way it use to be.

The "reporting requirement" of winnings is always going to be a sticky issue with small organizations. It's been my experience that small, not-for-profits that sell "raffles" (i.e.: Tickets based upon the Pa lottery) rarely comply with the IRS reporting requirement of $600.

I suppose if an organization sells "raffles" and fails to comply, it may (and I stress "May") be a worse case scenario that the organizations Small Games of Chance could get pulled. But, I would think...... ....that may be a long shot!!! (Just a pure SWAG on the long shot thing)

Dave

[melody]

SB 390

Solobay Introduces Changes to Small Games Regulations

HARRISBURG, Feb. 1, 2013 – State Sen. Tim Solobay today introduced a bill that will make needed changes to Pennsylvania’s cumbersome Small Games of Chance Law.

“The law that went into place last year made it impossible for some small organizations to comply, threatening their existence,” Solobay said. “We can’t underestimate the importance of local volunteer organizations to both the fabric and the economy of communities.”

Earlier this year, the Corbett administration agreed – at the urging of Solobay and Senate colleagues — to suspend the reporting requirements of Act 2 of 2012, after community organizations across Pennsylvania complained that the bill’s strict requirements could cause them to close their doors.

Solobay’s new bill, Senate Bill 390, would allow organizations to keep a greater share of their revenues from small games to operate their organization. It would also exempt smaller organizations from the onerous new reporting and background-check requirements if they generate less than $150,000 a year from games of chance.

Solobay, a former fire chief who still serves as an officer in his local fire department, said he has decades of experience with the on-going struggle to recruit volunteers and continue community service.

“Many organizations that conduct games of chance are facing serious financial pressures and rely on a dwindling pool of volunteers,” Solobay said. “The reporting requirements added last year created a huge burden for them.”

Solobay said SB 390 would make a number of other common-sense changes to the law, such as legitimizing a number of games that most organizations thought were legal for years, such as monthly drawings, Chinese Auctions, coin auctions, and “A Night at the Races.” Non-members would also be permitted to conduct games of chance with authorization of organization’s officers.

Another significant provision of the legislation delegates small games of chance oversight to local law enforcement rather than state Liquor Control Enforcement officers, who, Solobay said, have drawn complaints of overzealous action over minimal infractions.

Most importantly, Solobay said, Act 2 resulted in widespread confusion and hardship, and it needs to be simplified.

“Many of these local clubs and charitable organizations are struggling to make ends meet. The changes I’m proposing in SB 390 would help them survive so that their valuable contribution to the local communities can continue,” he said.

Senate Bill 390 would also:

•Allow organizations to limit the prize of a daily, weekly or monthly drawing by up to 50 percent if the winner isn’t present at the time of drawing.

• Allow club licensees to carryover funds – either the portion retained for operational expenses or the portion paid to public interest – beyond the calendar year if they notify the Department of Revenue of a significant purchase or project.

•Clarify that charity events, scholarship programs and philanthropic events held by the club are a valid public interest purpose and the club may spend small games proceeds for public interest purposes on these events.

•Delete the limitations throughout the act that require an organization to have a licensed premises, conduct all games of chance at their licensed premises, prohibit organizations from sharing a licensed premises, etc.

•Allow members to purchase a chance for the next daily, weekly or monthly drawing as soon as a daily, weekly or monthly drawing has taken place.

•Increase the threshold at which an organization must record the name address of a winner from $100 to $600, in line with the current IRS reporting requirements.

[melody]

This one is moving in the House:

HB 290 Brooks, Michelle - (PN 438) Amends Local Option Small Games of Chance Act by amending the definition of “games of chance” to include selective raffles, coin auctions, a night at the races, Texas Hold’em card tournaments and vertical wheel games. Provides definitions of selective raffles, coin auctions, a night at the races, Texas Hold’em card tournaments and vertical wheel games. Allows the Department of Revenue to approve small games of chance through regulation with statutory guidelines. Provides the annual report form to be available in a paper format and allows the report to be filed by mail. Clarifies that an organization may hold their small games of chance at another organization’s licensed premise and allows each organization to operate games at the same time. Changes the background check requirement from the secretary to the treasurer. Eliminates the need for limited occasion licenses. Clarifies the license process and requirements based on the amount of proceeds an organization receives from small games of chance. Allows club licensees to retain the first $40,000 in small games of chance proceed for their own use and when the $40,000 has been retained by the organization, allows the current 70/30 split of proceeds between public interest purposes and general operating expenses. Clarifies that Liquor Control Enforcement does not have enforcement powers over small games of chance violations with organizations that solely have a special occasion permit under the Liquor Code. Makes changes in record keeping requirements and eliminates the requirement that an organization must obtain receipts for all donated items.

More posted in the committe reports forum shortly.

[melody]

HB 290 Amends Small Games of Chance Act re games Brooks, Michele
Feb 13, 2013 - H-Final Passage by a vote of 186 YEAS 10 NAYS