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Nonprofit groups winning big at bingo
You might win $750 playing bingo, but the
legalized form of state gambling is fueling revenues 80 times that
large for local charities, church societies and veterans'
organizations.
Last year, Galveston County charities brought in $3.26 million in bingo money, the equivalent of every county resident giving those 17 charities $11.50.
Once you figure in the $2.2 million in prize money given away and the more than $500,000 in bingo-related expenses, such as security, bingo materials, advertising and licensing, county charities took in $1.34 million in net proceeds from bingo games, the equivalent of every county resident giving them $4.73.
While some of these charities actually lost money last year on bingo games, many more earned net proceeds between $100,000 and $500,000.
Island-based St. Constantine Helen Serbian Orthodox Church and its men's auxiliary took in $1.16 million, with net proceeds of $350,493 once you figure in expenses. The Knights of Columbus Hall in La Marque took in $418,462 and netted $156,491.
Although the Texas Lottery Commission, which regulates the legalized form of gambling, mandates that charities give back 35 percent of their bingo earnings in charitable donations, it appears that most local organizations give back less than 10 percent. Galveston County bingo operators gave back a total of $158,000 in charitable distributions last year. That's slightly less than 5 percent of the gross.
Phil Sanderson, director of the charitable bingo operations division, said the formula to calculate the amount that must be distributed to charities is "very convoluted," and in some cases, bingo operators don't have to donate any money to charities.
"If you're just looking at the line item 'charitable distributions,' it's not going to be 35 percent," he said. "
While the St. Constantine and Helen Serbian Orthodox Church in Galveston took in more than $607,000 in gross receipts, it gave away $22,700, or 4 percent, in charity.
The state commission that audits the organizations that conduct bingo games is short-staffed. The Texas Lottery Commission's charitable bingo division employs 15 auditors to inspect 1,250 of the state's bingo halls. Of the 885 audits the agency conducted last year, auditors observed only one bingo game, conducted five financial audits and inspected the books and records of 28 organizations.
One of the county's bingo operators, The Raymond C. Paul Veterans of Foreign Wars Post 880, was investigated by the Internal Revenue Service for failing to report taxable bingo income. The post reported financial losses to the IRS, even though it collected several hundred thousand dollars in gross receipts in bingo games.
Meanwhile, charitable bingo was a $663 million industry in Texas last year, earning the state $25 million in fees collected from the $494 million in bingo prize money.
Sanderson said half, or $12 million, of that prize fee money collected by the state was given back to local municipalities to put in their general funds. There are no restrictions on how that money is used.
"The cities and counties appreciate getting it," he said. "It pays for a police officer."
Charitable bingo was first authorized in Texas in 1980 when voters approved a constitutional amendment. The first bingo licenses were issued in the spring of 1982. In 1990, the Texas Alcoholic Beverage Commission regulated bingo games before handing them over to the Texas Lottery Commission.
Charitable bingo was faltering in Texas before the state expanded the types of pull-tab -- or instant bingo -- tickets that could be sold in Texas. In instant bingo, players pull off a tab on a card to win up to $500 instantly.
Marcelino Compean, grand knight of the Knights of Columbus in La Marque, said bingo money has helped his charity support Catholic churches and schools and build a new hall and pay its mortgage. The La Marque charity was running bingo games at least 15 years before they were legal, Compean said. The local Knights of Columbus earned more money off the illegal games before state regulation, Compean said.
"We didn't have to give any money to the state," he said. "We could keep all the money ourselves."
The La Marque organization has never been investigated by the Internal Revenue Service or the state's bingo commission, Compean said.
Sanderson said he's not sure what's in store for Texas bingo. Instant electronic bingo, an electronic game that has determined in advance which tickets will win, was recently banned in Maryland and has been ruled illegal by the Texas Attorney General. Meanwhile, bingo operators saw gross receipts dip in the last three quarters of 2007.
"The fourth quarter increase was not as substantial as it had been in the past," he said. "We're not sure if we're feeling the impact of the economy or if we've reached a plateau. The price of gas and cigarettes doesn't help, either."
www.galvestondailynews.com
Last year, Galveston County charities brought in $3.26 million in bingo money, the equivalent of every county resident giving those 17 charities $11.50.
Once you figure in the $2.2 million in prize money given away and the more than $500,000 in bingo-related expenses, such as security, bingo materials, advertising and licensing, county charities took in $1.34 million in net proceeds from bingo games, the equivalent of every county resident giving them $4.73.
While some of these charities actually lost money last year on bingo games, many more earned net proceeds between $100,000 and $500,000.
Island-based St. Constantine Helen Serbian Orthodox Church and its men's auxiliary took in $1.16 million, with net proceeds of $350,493 once you figure in expenses. The Knights of Columbus Hall in La Marque took in $418,462 and netted $156,491.
Although the Texas Lottery Commission, which regulates the legalized form of gambling, mandates that charities give back 35 percent of their bingo earnings in charitable donations, it appears that most local organizations give back less than 10 percent. Galveston County bingo operators gave back a total of $158,000 in charitable distributions last year. That's slightly less than 5 percent of the gross.
Phil Sanderson, director of the charitable bingo operations division, said the formula to calculate the amount that must be distributed to charities is "very convoluted," and in some cases, bingo operators don't have to donate any money to charities.
"If you're just looking at the line item 'charitable distributions,' it's not going to be 35 percent," he said. "
While the St. Constantine and Helen Serbian Orthodox Church in Galveston took in more than $607,000 in gross receipts, it gave away $22,700, or 4 percent, in charity.
The state commission that audits the organizations that conduct bingo games is short-staffed. The Texas Lottery Commission's charitable bingo division employs 15 auditors to inspect 1,250 of the state's bingo halls. Of the 885 audits the agency conducted last year, auditors observed only one bingo game, conducted five financial audits and inspected the books and records of 28 organizations.
One of the county's bingo operators, The Raymond C. Paul Veterans of Foreign Wars Post 880, was investigated by the Internal Revenue Service for failing to report taxable bingo income. The post reported financial losses to the IRS, even though it collected several hundred thousand dollars in gross receipts in bingo games.
Meanwhile, charitable bingo was a $663 million industry in Texas last year, earning the state $25 million in fees collected from the $494 million in bingo prize money.
Sanderson said half, or $12 million, of that prize fee money collected by the state was given back to local municipalities to put in their general funds. There are no restrictions on how that money is used.
"The cities and counties appreciate getting it," he said. "It pays for a police officer."
Charitable bingo was first authorized in Texas in 1980 when voters approved a constitutional amendment. The first bingo licenses were issued in the spring of 1982. In 1990, the Texas Alcoholic Beverage Commission regulated bingo games before handing them over to the Texas Lottery Commission.
Charitable bingo was faltering in Texas before the state expanded the types of pull-tab -- or instant bingo -- tickets that could be sold in Texas. In instant bingo, players pull off a tab on a card to win up to $500 instantly.
Marcelino Compean, grand knight of the Knights of Columbus in La Marque, said bingo money has helped his charity support Catholic churches and schools and build a new hall and pay its mortgage. The La Marque charity was running bingo games at least 15 years before they were legal, Compean said. The local Knights of Columbus earned more money off the illegal games before state regulation, Compean said.
"We didn't have to give any money to the state," he said. "We could keep all the money ourselves."
The La Marque organization has never been investigated by the Internal Revenue Service or the state's bingo commission, Compean said.
Sanderson said he's not sure what's in store for Texas bingo. Instant electronic bingo, an electronic game that has determined in advance which tickets will win, was recently banned in Maryland and has been ruled illegal by the Texas Attorney General. Meanwhile, bingo operators saw gross receipts dip in the last three quarters of 2007.
"The fourth quarter increase was not as substantial as it had been in the past," he said. "We're not sure if we're feeling the impact of the economy or if we've reached a plateau. The price of gas and cigarettes doesn't help, either."
www.galvestondailynews.com
