Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 15, 1993 TAG: 9303150022
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: JOEL TURNER STAFF WRITER
DATELINE: LENGTH: Long
UNDER NEW LAW, CHARITIES WILL GET MORE OF JACKPOT
Bingo games are supposed to benefit charities. But the big money doesn't go to those who need it most.Bingo operations grossed nearly $3 million in Roanoke last year. But only $124,880 was used for charitable, community, religious and educational purposes.
That's less than a nickel out of every dollar.
The big money goes for prizes; rental of bingo equipment and halls; supplies; and other expenses.
But that is likely to change in July, when City Council will get the power to regulate the percentage of bingo gross receipts that must be used for charity and other eligible activities.
The city soon will have a legal tool to force nonprofit organizations running bingo to provide more money for charity. The General Assembly approved a bill last month that enables localities to do just that.
The bill, which will take effect July 1, goes to the heart of the controversy over bingo games and complaints that small amounts of gross receipts go to charity.
Mayor David Bowers said council probably will set a minimum percentage for organizations to spend on charity or other nonprofit purposes for which they are chartered or organized.
"My guess is that council will look with favor on that," he said.
Bowers has suggested that some organizations are circumventing the bingo regulations because such a small percentage goes to charity.
The new law leaves it to localities to determine the percentage and requires that the same percentage be applied uniformly to all bingo operations.
The bill did not attract much public attention outside Richmond during the legislative session.
Last year, the General Assembly gave Richmond the authority that the new law would give to all localities. Richmond now requires organizations running bingo games to use 6 percent of their gross receipts for the charitable, religious, community or educational purposes for which they are organized.
If the organizations don't comply, they won't be issued a new permit next year, said Jay Doshi, Richmond's tax audit manager.
Doshi said Richmond sought the legislation because some nonprofit organizations were using only 2 percent or 3 percent of their gross receipts for charity. A few groups allotted 10 percent to 15 percent.
In Roanoke, five nonprofit organizations that have bingo operations grossed $2.9 million in the past year. The organizations made an average profit of 7 percent on the bingo operations but spent only 4 percent for charity.
The rest of the profit is being held in the organizations' bank accounts and is available for charity whenever the groups decide to use it for that purpose.
Under the current law, city officials said the groups can hold part of their profits and are not required to spend them during the year in which they were earned.
Of the Roanoke bingo operators, the highest profit margin - 10 percent - was recorded by the Knights of Columbus. The lowest were the Voice of the Blue Ridge and Veterans of Foreign Wars, each at 5 percent.
The Central Virginia Council of the Blind made 7 percent profit, and the Northwest Recreation Club made 9 percent.
James Grisso, the city's acting finance director, believes that the organizations should make a higher profit. Fifteen percent is reasonable, he said.
"If profits are not shown to benefit charity, then the purpose for which this gambling is permitted is not met," Grisso said.
Some organizations say they would find it difficult to clear higher percentages.
One reason for the low profits is the high rental rates for bingo equipment and halls. Four groups rent privately owned buildings, and the fifth uses a church social hall.
Two organizations - the Voice of the Blue Ridge and the Central Virginia Council of the Blind - each pay a fee of $1,000 a night to use a privately owned bingo hall and equipment, and for related expenses. Each organization runs games two nights a week, the maximum allowed by city law.
Joe Ingram, chairman for the bingo committee for the Voice of the Blue Ridge, said the nightly $1,000 bill is high, but the group must have a good hall to attract players. The Voice of the Blue Ridge is a support group for a radio reading service for the blind at public radio WVTF.
Betsy Jenkins, bingo chairman for the Central Virginia Council of the Blind, said the group rents the bingo hall because it has no other place for its game.
"If there was any way to cut down on expenses, we would," she said.
The Veterans of Foreign Wars pays $750 a night for the bingo parlor and equipment that it uses. It operates two nights a week.
The Northwest Recreation Club, which has bingo twice a week, pays $500 a night for its hall and equipment. The Knights of Columbus, which runs bingo once a week, pays $300 a night to use a church hall.
The Knights of Columbus had the smallest bingo receipts in the past year, but it had the highest profit margin and gave the most money to charity.
Dana Long, the city's tax compliance administrator, said that some rental rates appear to be high, but the groups are complying with the city's requirements for keeping financial records covering all aspects of the bingo operations.