I am the Worthy President of Colonial Beach Fraternal Order of Eagles #4315.  We donate a tremendous amount of money to our local community and to state and national charities. The proposed changes to charitable gaming laws will be detrimental to how our organization does business – that is, if we can remain in business because the proposed changes will surely cause many of Aeries to have to close their doors.  If these laws are passed as is, it is guaranteed to happen; we are a non-profit organization that donates most of what we take in, with the rest going to operating expenses.  We understand that Virginia wants to take control of the electronic gaming machines and pull tab games, but don’t take such drastic steps that it will put us out of business.  I would suggest at least a few changes as follows:

1. 11VAC20-20-40(B) Charitable gaming authorization for electronic gaming

A social organization desiring to operate and conduct electronic gaming shall complete a department-prescribed application to request a new or to renew an existing authorization. The social organization must provide the number of electronic gaming devices it intends to operate on the premises at the time when the authorization is issued to the organization. In accordance with §§ 18.2-340.23 and 18.2-340.26:3 of the Code of Virginia, a social organization shall submit a nonrefundable application fee payable to the Treasurer of Virginia in the amount of $200, in addition to the fee prescribed for the charitable gaming permit.

Why do organizations need to pay the additional fee to add the electronic games – they already have them, have had them for years, and now that they are to be overseen by the state, we shouldn’t have to pay another $200.00 fee because we’ve already paid for our license.  

Recommendation:  Remove the fee from the guidelines; it is redundant.

2. 11VAC20-40(K) Charitable Gaming authorization for electronic gaming

A social organization authorized to operate and conduct electronic gaming shall expend, at a minimum, 40% of its electronic gaming adjusted gross receipts for those lawful religious, charitable, community, or educational purposes for which the organization is specifically chartered or organized.

Forty percent is unrealistic.  Then, it’s of the gross receipts – that’s unrealistic.  If we take in $10,000 one week, give the machine owner their 50% ($5,000), then we give 40% of the $10,000, i.e., $4,000, to charities, that leaves us with $1,000 for operation funds.  AND, per other proposed changes, there are restrictions on use of that $1,000.  This WILL put us out of business!!!

Recommendation:  reduce the 40% requirement to 10%, in keeping with the other charitable gaming activities, at the most 15%.

3. 11VAC20-70(D) Accounts

All receipts from each session of bingo games, network bingo games, raffles, instant bingo, pull-tabs, seal cards, or electronic gaming shall be deposited by the second business day following the session at which they are received. 

Our Officers, the ones who handle the deposits are volunteers; many have full-time jobs.  Having to make deposits every other day is burdensome, and is not necessary.  Monies are kept in the safe until time to count and deposit it. 

  Recommendation:  Allow for weekly deposits as is currently done.

4. 11VAC20-20-100(K) Financial reporting, penalties, inspections, and audits

Salaries and wages of employees whose primary responsibility is to provide services for the principal benefit of an organization’s members shall not qualify as a business expense.

The days of having volunteers to do all of the work we need done are gone.  We have to pay employees (kitchen help, bartenders, etc.).  With that comes required payroll taxes, workmen’s comp, etc.  This law will not allow us to use any gaming proceeds for these expenses.  This will more than likely cause our small business to go under. 

Recommendation:  Allow salaries/wages as a qualifying business expense to be paid.

With all due respect, I ask that you reconsider this proposal as currently written.  The impact on the local and state charities that we contribute to will be highly affected as well as our individual Aeries across the Commonwealth of Virginia.  I find it  hard to believe that you want us to go out of business, but I can assure you, it will happen.  We do not make enough money on bar/food sales to operate; we NEED the electronic gaming machines money to keep our doors open.  Allow us to continue to fulfil our motto, People Helping People. 

Thank you in advance for your consideration.