The Hidden Economy Of Gambling

This is the same letter submitted to the Herald Dispatch. As the Herald-Dispatch has AN approximate 250-word limit, I wanted to expound on the idea for HNN’s dedicated readers.

Dave Peyton recently wrote a column suggesting the City of Huntington operate a bingo venture at the Civic Arena. With Dave Peyton, I’m never quite sure where his tongue is located within his cheek. If he was serious, and the City listens to the suggestion, I would like to offer a fairly qualified opinion based on years of experience. Before jumping into such a venture a closer
look must be taken at the subculture of bingo economics and politics.

There are dozens of bingo operations within this community. One prime example is the Redmen. A fraternal organization, The Improved Order of Redmen operates bingo on Adams Ave. If not for the Redmen, the former Lowe’s building would probably be standing vacant. As it is, they revitalized that abandoned building and attract many bingo players to that end of town. Those
people buy fuel, food, lottery tickets. The Redmen bingo attract out-of-state gamblers by the busload. They went to an enormous amount of expense and effort to create a haven for bingo players. The Redmen put a large number of dollars back into the community through donations to other non-profits and support many community projects. It is a requirement under WV bingo law that at least 80% percent of their profits are placed back into nonprofit ventures.

In 1996 a colleague, Kathryn Weidenfeld-Smith and I negotiated a contract for a sublease of the Redmen facility for Mountain State Centers for Independent Living. This 501c3 still hosts a bingo under this sublease contract that produces generous amounts of annual revenue for them. This nonprofit provides much needed services for persons with disabilities. Most non-profits have difficulty existing entirely on federal and state grants.

I also brokered similar bingo and nonprofit joint ventures in Martinsburg, WV and in Weirton-Follansbee area of northern WV. I’m not a fan of bingo, nor do I think it is a solution to our problems in regard to nonprofit survival. Through these bingo dollars being funneled back into the community with a "Foundation" concept, many people benefited. Personal dislike aside, with playing to the gambling addiction mentality being one complaint, it is often the only viable option available to many struggling non-profits whose loss if they closed their doors would be felt more intensely than most realize due to the makeup of economics surrounding nonprofit entities.

The City has offered little or no support to Mountain State Centers for Independent Living and other nonprofit through any avenue, such as block grants and other funds in the past. Understandably, the City's contribution priorities should be to support independent businesses, to create new income-deriving businesses and broad-based tax payers. Supporting non-profits isn’t the City’s primary goal – nor should it be. But, the non-profits contribute greatly to the economy of the city. The City of Huntington has a hidden economy of not-for-profit organizations that bring a lot of revenue into the City through offering their services. Families come here from all over the country to receive quality services that they cannot receive elsewhere for their children or family members. These people spend money while here and contribute to the income of the non-profits. The City of Huntington is part of the Empowerment Zone in part due to the numbers of nonprofit and low-income individuals that are attracted by the numbers of successful non-profits that exist in Huntington.

In a perfect world non-profits should be able to turn to their parent city for financial support when needed. The City of Huntington is in no position to extend services to all the non-profits needing assistance. By operating a bingo the city would effectively be cutting off hope for existing bingo venues to successfully continue to raise money.

Operating a bingo must be done by a 501c3 organization. The community Dave Peyton spoke of in his column as operating a bingo must be included in this mandate as they are not a true 501c3. I'd be curious as to the creative strategizing that they are operating under. The 501c3’s that operate bingo have stringent guidelines on the number of volunteers operating a bingo versus hiring personnel to do so. The rules governing employees that are not volunteers are also restrictive, as is the amount these individuals are paid. The toll on nonprofit volunteers working at the never-ending grind of weekly bingo is enormous in terms of time, energy and exhaustion. Not to mention the potential health hazards of cigarette smoke as smoking is allowed in these establishments. Hence, raising the medical cost envelope considerably for those working in the smoke-filled atmosphere.

Will the City be willing to disperse a healthy portion of their gambling revenues back into the true nonprofit organizations that will suffer when their bingo revenues are lost? I doubt it, as the City's deficit is so large. This hidden economy has to be looked at closely or more harm than good will come of such a venture.

Sandra McCoy

Wayne, WV