Subject:  Concerns regarding the Use of Proceeds calculation and what falls into this category.  

According to the draft report, organizations with electronic pull tab machines are required to have UOP based on total ticket sales minus prizes paid out (adjusted gross).  However, there is no consideration that the organization only keeps half of this adjusted gross in this calculation.  The one half of the adjusted gross goes to the gaming company providing the machines.  So half of income realized from this gaming activity is are not ours in the first place.  However, we are having to base UOP on the total adjusted gross.

The calculation for UOP should take that into consideration.  Example:  Ticket sales = $50,000 - $45,000 prizes paid = $5000 adjusted gross.  The charitable organization only keeps $2,500 of that because the other half goes to the gaming company.  However, as the regs are currently written we must have UOP based on the $5,000.  This is NOT FAIR, EQUITABLE or REASONABLE.  Therefore, the UOP calculation needs to be adjusted to consider only the money actually kept by the organization with the electronic machines. How can we be responsible for funds that are not ours in the first place.

Second, per the regulations we are required to have a gaming manager on duty while the games are available.  Since this is a requirement of  the regs we should be able to pay those employees from gaming funds.

Third, in the bingo/raffle part of the report the UOP is only 10% and we may use 85% of facility expenses as UOP.  This makes sense since we need a facility to house the charitable gaming activities.  The same is true with electronic devices - we must have a facility to house the machines.  Additionally, the Bingo/raffle funds may come from the public playing.  The electronic pull tab machines income comes from members of the charitable organization operating the machines.  Why the difference in the UOP amount and what can be considered UOP?  Again, this is NOT FAIR, EQUITABLE or REASONABLE. 

Please reconsider the following in the revised regulations:

1.  UOP on electronic pull tabs should be based on the half of the adjusted gross kept by the charitable organization - not the entire adjusted gross

2. UOP should be the same percentage as the Bingo/raffle income

3. UOP should include a portion of facility expenses like the Bingo/raffle portion UOP reguirements

4. UOP should include payroll for the Gaming Managers as required by the regulations.

Thank you for considering these changes.

Barbara Carpenter

Administrator

Montross Moose Lodge #2333