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Bingo! Operators complain DF&A getting windfall from game card tax Sunday, Mar 2, 2008 By Rob Moritz Arkansas News Bureau LITTLE ROCK - Bingo became legal in Arkansas last summer and is going well for the charitable organizations that operate them, but operators say the big winner so far has been the state Department of Finance and Administration. They say a 1-cent per bingo game card tax that has generated in its first seven months nearly the full amount DF&A said it would cost to administer the program for a full year is cutting into money available for charity. "They're getting money that ought to be spent on college scholarships, taking care of old people and allowing kids to go to Boys State and Girls State," said Bill Vines, commander of American Legion Post 31 in Fort Smith. For years, despite a constitutional prohibition against gambling, some veterans' posts and churches operated weekly bingo games to raise money for scholarships and other charitable giving. Voters in 2006 approved a constitutional amendment legalizing charitable bingo and raffles. Act 388 of 2007 established rules and regulations for operators, including a method of taxing the games. DF&A officials say tax proceeds are being used to cover administrative costs of overseeing bingo operations in the state. The state fiscal office has hired five new employees to monitor bingo operations and has set the new division's annual budget at about $700,000 a year. Since July 1, when the games began, the tax has generated almost $600,000, DF&A said. Vines said the tax has made it impossible for his American Legion post to fund five college scholarships, $1,000 each, for high school students in western Arkansas this year. "The state is funding a new agency," Vines complained, suggesting any policing or oversight of bingo games could be done locally by the county sheriff, local police and prosecutor. Bingo operators in other areas of the state also have said the tax has cut into their charitable giving. "When we look at what we order versus the cost we pay on the tax, it's 300 percent to 350 percent," said Kathy Dust of Pocahontas, who coordinates the weekly bingo game for St. Paul the Apostle Church in that northeastern Arkansas city. She said a case of 9,000 bingo game cards costs $25-$30 and the tax is an additional $90. "We don't mind paying the tax, we just feel like the tax is excessive and can be reduced and still support the state and employees," Dust said. "On our first invoice after we started, we saw the tax and commented that it would pay tuition for one child to go to our school for a year." Dust said she is collecting signatures on a petition asking the Legislature to reduce the tax. She said she has collected about 500 signatures and has asked other groups operating bingo games to participate. She said she plans to present the petitions to lawmakers and the governor later this year. The Veterans of Foreign Wars post in Springdale is reportedly losing about $1,500 a month because of the tax. Reps. Rick Green, R-Van Buren, and Tracy Pennartz, D-Fort Smith, both raised the possibility of reducing or eliminating the tax during an extensive discussion of the issue by the Legislative Council last month. "My concern is, we don't want to tax our local community programs like this so that they can't contribute scholarships and things like they've been doing," Pennartz said. During the meeting, Green asked DF&A Deputy Director Tim Leathers if he thought the tax was excessive. "It could generate over $1 million ... if continued at this pace, but we think a lot of these taxpayers bought a lot of cards upfront and we got a big windfall," Leathers said, adding that he and other officials expect the amount generated by the tax to taper off by the end of the fiscal year June 30. Rep. Shirley Walters, R-Greenwood, who sponsored legislation that became Act 388, has been looking at whether the tax can be altered without approval of the Legislature, which convenes its regular session next year. Walters recently met with several bingo operators in Fort Smith to hear their concerns and later sat down with DF&A officials to determine if the tax could be reduced. DF&A officials said any changes must be made legislatively. "Not only does state law provide that a single card is a bingo face, but it is also the commonly understood meaning of that term in the industry," said John Theis, assistant revenue commissioner with DF&A. "I imagine this is going to be something for the next Legislature to consider," Theis said. "We are going to keep working on this to get them to change the rule, but if not it will stand as 1 cent per 'face,' which is one game card," Walters said. Under Act 388, groups must purchase a license, and then pay a 1-cent tax on each bingo game card, or "face," sold. Along with the tax, charities must pay $25 for a one-time bingo or raffle license, or $100 for a regular annual bingo and raffle license. Fort Smith police Sgt. Jarrad Copeland said his department routinely sends an undercover officer to any bingo operation suspected of operating illegally. Any information is then turned over to the prosecutor's office, he said. Sebastian County Prosecutor Gunner DeLay did not return a telephone call seeking comment. Sebastian County Sheriff Frank Atkinson said his deputies rarely are called to bingo establishments because they are all located within the Fort Smith city limits. |
