Bill regulating charity raffle operators advances
NASHVILLE (AP) — Those who would profit from running raffles for Tennessee charities would have to register, pay annual fees and limit their take to 40 percent of the money raised, under legislation that advanced in the General Assembly Tuesday.
The measure was approved by committees in both the House and Senate as lawmakers continued to push for quick passage of a companion bill that would allow charities to begin holding gambling fund-raisers this year.
The so-called “Charitable Gaming Operators Licensing Law” would require professional operators to pay a $50 application fee and an annual $100 licensing fee. They also must have a $50,000 bond to cover “any losses associated from malfeasance, nonfeasance or misfeasance in the conduct of charitable gaming activities.”
In addition, applicants would have to undergo a background check by the Tennessee Bureau of Investigation and must not have been convicted of a felony or had their license to operate charitable gaming revoked in another state.
The provisions wouldn’t apply to charities that run raffles without professional operators.
The bill, which gives the secretary of state regulatory authority, is part of an effort by lawmakers to avoid problems associated with state-sanctioned gambling in the past.
The “Rocky Top” federal and state criminal investigation found some bingo operators used state charters of legitimate Tennessee charities to run gambling operations in the late 1980s. The House majority leader and several others were convicted of federal crimes and a legislator and the secretary of state committed suicide.
“When you look at the history of where things went wrong, it was the operators that took advantage of the charities,” said House sponsor Rep. Harry Tindell, who presented the bill to that chamber’s Government Operations Committee. “We’re establishing a framework so we know who these people are … that they’re credible people.”
After the Rocky Top scandal, the state Supreme Court ruled in 1989 that bingo and raffle games violated the state Constitution’s ban on lotteries.
Eight years later, the attorney general cited that ruling in an opinion that said the popular rubber duck races benefiting the Boys and Girls Clubs of the Tennessee Valley were illegal. That changed in 2002 when voters approved a referendum to amend the state Constitution to allow the legislature to approve such events.
Even if approved, the regulations won’t take effect until July 1, 2005, in order to allow the secretary of state’s office to institute the approval process. That means businesses and individuals would be able to operate charity gaming events for a full year without a license — something Senate sponsor Jim Kyle says he isn’t worried about.
“We don’t believe very many people will be applying with only two or three weeks to take applications,” he told the Senate State and Local Government Committee, which unanimously approved the bill. “That minimizes the risk to get that done. But there will be a report filed so we’ll know if a charity dishonors itself by doing something inappropriate.”
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On the Net:
See SB3445/HB3476 at Tennessee General Assembly: www.legislature.state.tn.us