Charity gambling needs oversight, panel says

January 11, 1994|By Frank Langfitt | Frank Langfitt,Staff Writer

A governor's task force recommended yesterday that the state step in to regulate the scores of civic groups that take in millions of dollars each year through gambling.

Under the recommendation, a state commission would license a wide array of games, from tip jars in Western Maryland and casino nights in Prince George's County to slot machines on the Eastern Shore. Currently, a hodgepodge of local laws governs many of the games, which police say are ripe for theft and mismanagement.

"We had the sheriffs come up from a number of jurisdictions saying they can't handle it," said Gary R. Alexander, speaker pro tem of the House of Delegates and a member of the task force. "Prince George's County is totally out of control for casino night gambling. In Western Maryland, there's no regulation whatsoever."

Creating a commission would require legislation. A bill is expected to be introduced during this year's 90-day legislative session, which begins tomorrow, but its chances remain uncertain.

Gov. William Donald Schaefer said yesterday that he supported the idea, but a key Senate committee chairman said he would fight it. Some of the fraternal and other charitable organizations that rely on gambling for fund-raising are also expected to oppose state regulation.

Mr. Schaefer created the Task Force to Study Gambling in August. Chaired by John J. Mitchell, a retired Montgomery County Circuit judge, the panel was a diverse group, with members hailing from as far away as Easton and Hagerstown. Members included career police officers, state legislators and members of the public.

At task force hearings last fall, police from around the state testified to the myriad problems of Maryland's growing gambling business.

The hearings offered legislators and the public a glimpse of the breadth of the largely unregulated enterprise, as well as the related confusion and abuse.

In Anne Arundel County, alleged links between certain bingo operations and organized crime have led to four indictments. A police sting in Prince George's County found that casino operators offered charities bribes of $1,000 to $2,000 a night to use the charities' names.

Veterans groups and fraternal organizations on the Eastern Shore operate slot machines that bring in gross receipts of at least $30 million annually by state estimates. They must donate half of the profit -- more than $18 million from 1988 to 1992 -- to charity, then use the other half for their organizations.

An Annapolis grand jury working with the state attorney general's office found that many groups were confused over exactly what they could use the slot machine revenues for. And, though each group must file financial reports with the state, no one checks them.

As proposed by the task force, the commission would be able to review and make recommendations about the state lottery and the horse racing industry, but it would have no authority over those forms of gambling, which are already regulated.

The commission would license civic groups and other charities that bring in a substantial income from gambling. It would also require uniform financial filings and could investigate complaints against the organizations.

If an organization violated the law, the commission could strip it of its license after a due process hearing and effectively put it out of the gambling business.

Opponents, including Sen. Walter M. Baker, a conservative Cecil County Democrat, concede that there are problems with the current system but suggest that they be dealt with on a regional basis.

"I don't believe in going around killing gnats with sledgehammers," said Mr. Baker, chairman of the Senate Judicial Proceedings Committee. "I think a tack hammer will do."

Any bill to create a commission is likely to have to pass through Mr. Baker's committee.

Mr. Baker said he plans to introduce a bill this session that would standardize recordkeeping for slot machines and make each organization set aside all of its gambling funds in a single account. Mixing funds has been a problem in the past. Local sheriffs and the state Department of Fiscal Services could then oversee the system, he said.

Mr. Alexander, a Prince George's County Democrat, said the intent of forming the commission would be to keep better track of gambling, not to stop it. He said he hopes charitable organizations will view the proposal that way but noted that if they don't, they could wage a strong fight.

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