Oversight urged for Shore gambling Grand jury calls slots vulnerable to crime

November 24, 1993|By Thomas W. Waldron | Thomas W. Waldron,Staff Writer Staff Writer William Thompson contributed to this article.

Lax oversight and sloppy bookkeeping, which included records kept on paper napkins, has made the $32 million annual slot machine activity on the Eastern Shore vulnerable to criminal abuse, a state grand jury report concludes.

However, the 15-month grand jury probe found no evidence of criminal activity involving the fraternal clubs that have the slots, and no indictments were handed down.

Attorney General J. Joseph Curran Jr., whose office directed the probe, endorsed the grand jury recommendation for stricter state scrutiny, including the creation of a slot machine oversight commission.

"There are virtually no real regulations, restrictions or controls," Mr. Curran said yesterday. "Before things get out of hand, we should do something."

The 1987 law legalizing the slots in Eastern Shore fraternal clubs is so badly written that it's not even illegal to lie on the annual reporting forms, Mr. Curran said.

The grand jury found a "generalized confusion" about the law.

Some 250 slot machines are found in 52 clubs in eight counties. Quarter by quarter, the machines raked in nearly $32 million in gross revenues last year.

Roughly 88 percent of the take is paid back as winnings to players. Half of the remaining 12 percent is supposed to be donated to charity, with the other half used for club expenses, which ranged from new roofs to pool tables.

The grand jury found the clubs gave charities some $9 million during the four years ended June 1992, making the clubs some of the biggest philanthropists on the Shore.

The clubs, though, were generally ill prepared to account for such large sums of money.

In some cases, clubs used paper napkins to record money wagered in the machines.

In other cases, the clubs mixed the slot machine revenue with money collected as dues, making it impossible to track how the slot proceeds were used.

Mr. Curran and the grand jury called for annual audits and a new definition of eligible recipients.

Contributions now often go to noncharitable causes, such as boat regattas, prom nights or fireworks shows.

The contributions were probably not legally appropriate, but also not criminal offenses, Mr. Curran said.

Andy Holland, commander of Veterans of Foreign Wars Post 7686 in Chesapeake City, said he would support better reporting guidelines, but would strongly oppose further "state control" of the slots.

"We're all veterans," Mr. Holland said. "We don't believe in thievery."

During its last session, the General Assembly turned down two proposals backed by Gov. William Donald Schaefer that would have increased scrutiny of the slot machines.

The measures were strongly opposed by some Eastern Shore legislators who said there was no evidence of wrongdoing.

A gubernatorial task force on gambling, appointed in September, is expected to make recommendations before the 1994 legislative session.

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