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Charity casino gambling
In 2008, charity casino gaming at fraternal lodges brought in just over $1.4 million statewide. By fiscal year 2012, that number swelled to $15.4 million, led by five Allen County organizations:

Club

City
Gross
receipts
Total
expenses
Net
proceeds
Amount to charity Amount
retained
Total
undistributed
Percent
profit
American Legion Post No. 377 Woodburn $650 $313 $337 $0 $337 $0 52%
American Legion Post No. 499 Fort Wayne $904,269 $851,776.50 $52,492.50 $2,000 $45,441.68 $5,050.82 6%
Fraternal Order of Eagles No. 248 Fort Wayne $2,588,495 $2,492,176 $96,319 $29,935.92 $66,383.08 $0 4%
Fraternal Order of Eagles No.3512 Fort Wayne $2,252,237 $2,128,103 $124,134 $34,385 $89,749 $0 6%
Navy Club of New Haven Ship 245 New Haven $34,875 $34,530 $345 $0 $345 $0 1%
Source: Indiana Gaming Commission
Photos by Samuel Hoffman | The Journal Gazette
Blackjack dealer Melissa Leverton waits for players at The Pub Casino on Washington Center Road.

Lodges’ new lifeblood

Revenue falling at state’s regular casinos, but local licensees thrive

Samuel Hoffman | The Journal Gazette
A roulette table at The Pub Casino on Washington Center Road.

It’s Wednesday afternoon, a slow day compared with Fridays and Saturdays, but still there’s some action.

The click of poker chips and banter echo throughout The Pub on Hatfield Road. A group of a dozen or so men surround a green felt table, their eyes deep into the cards fanned out in their hands.

They’re anteing, raising, calling, and by the sound of things, having a very good lunch hour.

This has been going on at The Pub – operated by the Fraternal Order of Eagles No. 3512 – for roughly four years now. And just as it has been for other lodges throughout the state, charity gaming has become a saving boon for the Eagles.

“Our club was in dire need of this,” said Doug Pelz, the head trustee for Eagles 3512 and a member for 25 years. “We were sinking. We had to find more ways to make money for the club.”

Indiana’s regular casinos continue to report declining attendance and revenue figures, and bingo halls, mainstays of charity gaming, are beginning to disappear.

But that’s not because Hoosiers’ appetite for gambling is shrinking. Instead, fraternal lodges offering games like poker, roulette and blackjack are beginning to thrive.

Especially in Allen County, where clubs made more gross receipts off charity casino games than any other county in the state during fiscal year 2012, which ended June 30, 2012.

And while bingo gross receipts have declined by more than half statewide in the past four years, lodges and clubs using casino games have reported revenue spiking.

In turn, these clubs are making a bit of a profit and also are able to donate more money back into the community, according to club officials.

‘Keeping us alive’

Fraternal organizations and veterans clubs that obtain an “annual charity game night license” can operate casino games three days a week.

Some of the rules and laws have been amended in recent years, but the clubs are restricted to using volunteers to run the games and can be open only at certain times during the day. They cannot be open more than two consecutive days.

In 2008, the gross receipts from these casino games at fraternal organizations were relatively anemic, bringing in $1.4 million statewide.

Bingo, on the other hand, was the overwhelming king of charity gaming in Indiana. Clubs that had annual bingo licenses showed gross receipts totaling $389 million statewide that year.

The only fraternal organization in Allen County with a casino license at that time, the Fraternal Order of Eagles No. 248, had gross receipts of $24,413.

By last year, receipts statewide from charity casino gambling in clubs had swelled to more than $15.4 million. The five Allen County organizations with annual casino night licenses brought in more than $5.7 million, more than a third of the state total and by far more than any other county, according to gaming commission numbers.

The Eagles No. 248, located at 4940 Bluffton Road, led the way with gross receipts totaling $2.5 million.

For that club, the casino came just as the popular Cherry Masters gambling machines were outlawed throughout the state, according to the assistant manager.

“It’s keeping us alive,” said an assistant secretary with the Eagles No. 248 who did not want her name used for this story.

“When they took the Cherry Masters out, that pretty much killed us,” the woman continued, who described herself as a 30-year member of the club.

“So the casino is a big contributor to keeping our doors open.”

But such clubs are not allowed to keep all the money they bring in. Some must be spent on expenses; some gets pumped back into charity.

While the law does not set a certain amount that must be donated to charity, an Indiana Gaming Commission official said some of a club’s net proceeds is supposed to be used for the club’s “lawful purpose.”

For instance, the Eagles No. 248 may have brought in $2.5 million through casino gaming in 2012, but it spent $2.4 million of that on expenses, according to the gaming commission.

That left more than $96,000 in net proceeds, nearly $30,000 of which was donated to charity.

That left the club with $66,383 – a 4 percent profit.

“It was a mere fact we weren’t donating like we used to donate (before the casino),” said Pelz, the trustee with the Eagles No. 3512, who helped his club open its own casino after visiting his in-town counterparts.

Pelz’s club brought in $2.2 million in gross receipts, spent $2.1 million of that and donated more than $34,000, leaving it with a 6 percent profit of nearly $88,000.

“Over the last four years, we’ve donated about $250,000 to various programs in the community,” Pelz said.

“Prior to that, we barely donated anything.”

As part of an annual charity game license, a club can also give away door prizes and conduct raffles, though the value of those prizes cannot exceed certain amounts.

The law does not set any amounts on how much action can be going on at a table at a given time.

Pelz’s club advertises $5 minimums and $15 maximums for blackjack on its website, and also some poker tournaments with bet limits. The club, though, also offers no-limit cash games, according to the website.

Meanwhile, bingo may still reign in the charity gaming world, but the gross receipts on annual bingo licenses are shrinking, having dwindled to $181 million statewide last year.

In Allen County, clubs with annual bingo licenses reported gross receipts of a little more than $20 million in 2012, down from more than $34 million in 2008, according to gaming commission statistics.

“We had been doing bingo, but it just kind of felt like there was a need for something other than bingo,” said the assistant secretary with the Eagles No. 248. “There was bingo everywhere.”

There were nine clubs in Allen County with annual bingo licenses in 2012, down from 18 in 2008.

State casinos down

While revenues at charity casinos continue to increase, state lawmakers are looking for ways to help the state’s 13 official gambling halls, which are reporting steady losses.

In March alone, revenues fell 4.4 percent compared to the previous month, according to state gaming commission numbers.

Not coincidentally, experts say, a new casino opened last month in Cincinnati, and revenues at two of Indiana’s southern riverboat casinos took huge hits.

Other casinos opening in Michigan in recent years – which also advertised heavily here – are also blamed for the loss of state casino revenue.

But it’s unclear whether charity gaming has any impact on the “real” casinos across the state.

“The only reason I know it worked is people can come here,” said Pelz of his club’s casino. “People don’t have to make the drive.”

Still, any correlation between the rise of charity casinos and the trouble at permanent casinos might be hard to assess, according to some experts.

“We’ve looked at some of that over the years, and the impact has not been as pronounced as you might assume,” said Ed Feigenbaum, editor of Indiana Gaming Insight, which tracks gaming in the state.

Feigenbaum, though, said his publication has focused on tracking some of the bingo trends and has not taken a hard look at charity casino gaming in the past few years.

Still, he said there may be several factors at play with an increase in charity casino revenues.

People may like the atmosphere in their club better, or the smoke-free environment, or they may view going to their charity casino as a social obligation.

“It gives them different kinds of options and alternatives,” Feigenbaum said.

State lawmakers are now considering removing some of the tax on free-play coupons that casinos use to entice visitors, according to The Indianapolis Star.

It would allow Indiana casinos to compete with Ohio, which does not tax free play.

With casinos struggling, Pelz on Wednesday was looking forward to a decent crowd at his club during the weekend, with Friday being typically its best day.

He expected the dozen or so empty poker tables to be filled, the blackjack tables to be lively, the roulette tables hopping and the food out fast.

He expects a lot of weekends like that, so long as Hoosiers want to gamble.

“As long as everything keeps going and it’s worth our while to do this, we’ll do it,” he said.

jeffwiehe@jg.net

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