Casino & Bingo: ND Charitable gambling group says smoking ban hurts

By Jonathan On Jul 5, 2017

Charitable gambling group says smoking ban hurts

Williston bingo parlor closing

11-28-2006

WILLISTON (AP) – The Bingo Barn is closing after 20 years, and officials say the state’s law that bans most indoor smoking is the reason.

The bingo parlor, which will shut down after its final session on Saturday, supported three charities: the Williston State College Foundation, Williston Basin Skating Club and North Dakota Association for the Disabled.

Officials said bingo parlor revenue dropped after the smoking ban went into effect in August 2005, but the parlor still had to pay more than $100,000 in state taxes for the fiscal year that ended June 30 of this year.

The charities said they will join others in seeking legislation next year to change tax laws for bingo parlors.

Bingo operators hoping for state tax cuts

May 26, 2007

Bingo operators are hoping state tax cuts will offset some of the lost revenues they attribute to a new law that bans most indoor smoking.

Ron Gibbens, president of the North Dakota Association for the Disabled, met with state legislators to ask them to support repealing North Dakota’s sales tax on bingo cards, and cutting the tax rate on bingo proceeds.

The NDAD, which operates bingo halls in Minot, Grand Forks and Williston, does not intend to request that bingo establishments be exempted from the anti-smoking law, Gibbens said.

“As an organization that provides for the health of citizens, we don’t want the NDAD to be portrayed as being pro-smoking,” he said.

North Dakota taxes the adjusted gross proceeds from bingo and other charitable gambling operations at rates ranging from 5 percent to 20 percent. Adjusted gross proceeds is the amount left after prizes and taxes are paid. Gibbens said he would prefer a single 5 percent tax rate.

Sen. Bob Stenehjem, R-Bismarck, the Senate majority leader, said the Legislature could consider a flat tax rate, but he said it would probably be higher than 5 percent.

“Coming up with a big tax break is probably going to be hard to do,” he said.

The presidents of Prairie Public Broadcasting and the Plains Art Museum, both of which have bingo operations, said they have experienced steep revenue losses that they attributed to the anti-smoking law. It took effect last August.

The Plains Art Museum has cut 16 staff positions at its Fargo museum and has reduced other expenses, said its president, Ed Pauley.

“We will have to consider closing it altogether if it doesn’t turn around,” he said.

Bingo halls seek tax break due to smoking ban effect

05-25-2006
TOM RAFFERTY

Ron Gibbens said there’s a “very strong likelihood” two charitable bingo halls will close because of a statewide anti-smoking law, yet he is not asking legislators for an exemption to the law.

Gibbens, who founded the North Dakota Association for the Disabled 30 years ago with his wife, Faye, has dismissed the idea of asking for a smoking exemption because of the nature of the organization.

“As an organization that provides for the health of citizens, we don’t want the NDADto be portrayed as being pro-smoking,” Gibbens said.

Instead, Gibbens, the president and CEO of NDAD, is asking legislators to consider granting tax relief to charitable gaming organizations.

The state currently charges a 5 percent tax on the first $200,000 of adjusted gross gaming proceeds, 10 percent on the second $200,000, 15 percent on the next $200,000 and 20 percent on proceeds of more than $600,000.

One of Gibbens’ suggestions is to set the tax at a flat 5 percent rate regardless of the amount of proceeds collected.

Another option he presented to a group of legislators and nonprofit executives in Bismarck on Wednesday was to eliminate the sales tax on bingo sales. Gibbens said if the sales tax is eliminated, bingo halls could maintain their current prices but keep the amount they would have normally collected for sales taxes.

Gibbens estimated that the state would lose about $1 million a year if either one of those proposals passes but that the state risks even more losses if two bingo halls in eastern North Dakota – one operated by the NDADin Grand Forks and another by the Plains Art Museum in Fargo – close.

Since the statewide ban on smoking in most public places went into effect in August of last year, bingo halls have blamed it for lagging sales.

The eastern bingo halls are more susceptible to closure because customers cross the border to Minnesota, where they can smoke in bingo halls there, Gibbens said.

Legislators at Wednesday’s meeting were open to the idea of looking at the tax structure or making other changes to help charitable bingo.

Sen. Bob Stenehjem, R-Bismarck, suggested that charitable gaming organizations could lobby cities to ban smoking in all bars that conduct bingo games so that a level playing field is created. He also said legislators could consider a flat tax rate that is higher than 5 percent.

“Coming up with a big tax break is probably going to be hard to do,”Stenehjem said.

Rep. Dwight Wrangham, R-Bismarck, said he was surprised the NDADdoesn’t want an exemption to the smoking ban. Wrangham said people should be allowed to smoke in bingo halls, but the age to enter a bingo hall should be increased to 21.

“We should allow those people to exercise their right to smoke,” Wrangham said.

Rep. George Keiser, R-Bismarck, said the Legislature needs to re-examine taxes on all gaming revenue and could consider a flat tax that is revenue neutral to the state.

According to Gibbens, the NDADcollects 70 percent of its revenue from gaming. To make up for lagging bingo sales, the NDADhas eliminated their medical equipment budget for 2007 and other budgets and has put a freeze on raises for staff. The NDADprovides medical equipment, drugs, transportation and attendant care for people across the state with a variety of disabilities.

Gibbens said the NDAD bingo hall in Grand Forks lost $27,800 from October 2005 to this March, and he presented a report showing a combined 74.4 percent decrease in net income for NDAD bingo halls in Grand Forks, Minot and Williston from that time period compared to the previous year.

John Harris III, president and CEO of Prairie Public Broadcasting, which operatesDakota Skies Bingo in Bismarck, said the bingo hall will survive if no changes are made, but the lost revenue will affect the services the company provides to the public. Harris said Dakota Skies Bingo made about $211,000 less from October 2005 to April 2006 compared to the same period of time a year ago. Harris said bingo income is about 12 percent of the company’s total income.

Ed Pauley, president and CEO of the Plains Art Museum, said the museum has reduced staff by 16 at the museum and has made other cuts.

“We will have to consider closing altogether if it doesn’t turn around,” Pauley said.

North Dakota Association for the Disabled business devastated by law

Apr. 23, 2006
By Tu-Uyen Tran
Herald Staff Writer

Born with cerebral palsy, a condition that weakened the left side of her body, Joan Schiele never has had an easy time getting around. Too disabled to drive or walk very far or easily get on a bus, she had, until recently, relied on a taxi service for the disabled.

Stricken with gout, diabetes, high blood pressure, high cholesterol, chronic kidney stones and depression, Phyllis Perkerewicz hasn’t had an easy time, period. Until recently, she had been taking 13 different medications, but now she only can afford five.

Different conditions but one common problem. Both are clients of the North Dakota Association for the Disabled, based in Grand Forks. Until late last summer, the nonprofit group was able to offer generous financial aid to disabled people who couldn’t get similar help elsewhere.

On Aug. 1, 2005, smoking bans enacted by the state and the city to protect workers from carcinogenic second-hand smoke went into effect. As an unintended side effect, it dealt a crushing blow to NDAD’s bingo parlors – including the Bingo Palace in Grand Forks – whose customers are, by and large, smokers. The parlors had been the main source of funding for NDAD, allowing the group to help Perkerewicz pay for her medicine and Schiele pay for a powered wheelchair and taxi service.

As things now stand, NDAD has had to cut back financial aid to the bare minimum and cease accepting new clients. It’s the worst financial crisis the group has faced since it began offering aid in 1982.

“We’ve had some setbacks (in the past), but nothing quite this devastating,” said president and co-founder Ron Gibbens.

“It’s been tough telling people we can’t help them with direct assistance,” said Jeri Hietala, an NDAD case worker. “All of a sudden, our budget was gone.”

Total bingo earnings last year was down to $884,000, nearly 30 percent lower than in 2003 – and that’s with two quarters’ worth of higher than expected earnings. By the third quarter, during which the smoking bans went into effect, earnings began dropping precipitously.

NDAD’s three bingo parlors together earned less than $7,000 in the final quarter. The Bingo Palace actually reported a loss of nearly $40,000. The same period a year ago, the three parlors earned nearly $250,000.

If that trend bears out, earnings will be far worse this year than even last year.

The financial aid budget is assuming the worst. For 2006, it expects to provide only $146,000 worth of aid compared to $753,000 in 2004.

The impact of all this can range from merely inconvenient to disturbing.

Schiele, for example, can’t afford the taxi rides anymore but is still able to get around with the help of her husband Jeff, friends or relatives. That means, though, that she has to inconvenience others and not be as independent as she’d like.

Depending on what she needs to do, get to work or take her 5-year-old Hannah to the doctor, she said she has to juggle three to four people a week.

For 58-year-old Perkerewicz, the impact has been harder to bear.

A widow since she was 38, she’d worked hard to raise three children, one of them still living at home. Several years ago, she was diagnosed with kidney stones, diabetes and then high cholesterol and high blood pressure. Though she had insurance, getting the kidney stones removed put her $6,000 in debt, most of which she still has to pay off.

She became an NDAD client three years ago when she found herself taking out payday loans to pay for rent and utilities.

“I tried to make it on my own, but it got to a point where I couldn’t do it anymore,” she said. “And as you get older, you get more diseases.”

NDAD paid for most of the 13 medications she needed to stay healthy. Now it only can pay for the diabetes medication and she pays for four others. Not included on the list is the medication to keep kidney stones at bay, which means there’s a possibility she’ll need surgery down the road.

Perversely, Schiele and Perkerewicz probably could get financial aid from other sources, if only they were very poor. Both have jobs and fall into that category known as the “working poor” – people who work but, either because of low pay or high expenses, can’t escape poverty.

Perkerewicz has looked into various government programs but found she didn’t qualify.

“It almost seems working is put against you a lot of the time when you’re looking for help.”

That’s precisely where NDAD used to come in.

Hietala, the caseworker, said the group filled in the gap where other agencies or non-profit groups couldn’t help. Sometimes it is because of income that’s not low enough and sometimes because it takes time to cut through red tape and qualify for support, she said.

Sometimes NDAD provides aid that is not so much a necessity as a quality-of-life issue, such as powered wheelchairs and lifts to get those wheelchairs into a vehicle. A powered wheelchair could cost $8,000 to $14,000, a frequently impossible sum for the disabled who live on a fixed income, according to Hietala.

Not that NDAD is accepting its fate without a fight.

“We haven’t given up,” said Gibbens.

So far, NDAD has considered putting bars inside the Bingo Palace to get around the smoking ban, which exempts bars, he said. But remodeling costs are estimated at $750,000, too high for the group’s budget, he said.

NDAD has considered other charitable gaming options, Gibbens said, but earnings projections were too low. “At the very best, we’re still not going to get back to the profits we were making before,” he said.

That leaves the other option: Asking for outside help.

The group is talking with state legislators, presenting six possible ways to save itself.

One is to amend the smoking ban to exempt bingo parlors, a move NDAD officials think is pretty unlikely. The others are considered less controversial. Three involve some sort of tax relief, one involves state funding of NDAD programs and another would let the group deploy slot machines.

NDAD’s finance chief Traci Ladouceur said taxes eat up a huge chunk of the group’s earnings. She pointed out, for example, that in the devastating final quarter of 2005, when the bingo parlors earned only $7,000, the state took in $275,000 in taxes.

The slot machine idea is not as farfetched as it sounds, either. A study conducted by UND for the Charitable Gaming Association of North Dakota found that 79 percent of state residents would vote to allow charities for the disabled to operate slot machines.

Gibbens said the response from the legislators NDAD has spoken with appears favorable, but he hasn’t gotten any assurances.

Which means when a new client comes to the group, caseworkers like Hietala won’t be able to do more than refer them to another agency. “I just have to tell them we have no idea when things will change.”

Smoking bans hurt bingo parlors

April 23, 2006

Smoking bans meant to protect workers from carcinogenic secondhand smoke are having the unintended side effect of reducing business at charitable bingo parlors.

The North Dakota Association for the Disabled, based in this city, was able to offer financial aid to disabled people who couldn’t get similar help elsewhere until last summer.

Smoking bans enacted by the state and city last August dealt a crushing blow to NDAD’s three bingo parlors, which have many smokers as customers. The parlors had been the main source of funding for NDAD.

Bingo earnings last year were down to $884,000, nearly 30 percent lower than in 2003 – and that’s with two quarters’ worth of higher than expected earnings. During the third quarter, when the smoking bans started, earnings began dropping.

NDAD’s three bingo parlors together earned less than $7,000 in the final quarter. The Bingo Palace in Grand Forks actually reported a loss of nearly $40,000. In the same period a year ago, the three parlors earned nearly $250,000.

Earnings could be far worse this year than last year.

“We’ve had some setbacks (in the past), but nothing quite this devastating,” said president and co-founder Ron Gibbens.

The financial aid budget is assuming the worst. For 2006, it expects to provide only $146,000 worth of aid compared to $753,000 in 2004.

“It’s been tough telling people we can’t help them with direct assistance,” said Jeri Hietala, an NDAD case worker. “All of a sudden, our budget was gone.

SMOKING BAN: NDAD pleads its case

Feb. 01, 2006
Elisa L. Rineheart

Citing a loss of revenue, the North Dakota Association for the Disabled asked state legislators at a lobbying luncheon Tuesday to reinstate smoking in bingo halls or give them a tax break.

NDAD is a nonprofit organization that funds assistance programs for North Dakotans with mental and physical disabilities with proceeds from bingo halls throughout the state. Two of those bingo halls, known as Bingo Palace, are in Grand Forks. The remaining two are in Minot and Williston, N.D.

The nonprofit organization devotes 88 percent to 90 percent of its proceeds to direct assistance programs for the disabled, said Ron Gibbens, NDAD president.

Gibbens said that since the smoking ban was enacted in August, all four bingo halls reported lower sales in the fourth quarter of 2005. Figures from October through December show a 39 percent decrease in proceeds compared with the same quarter last year.

NDAD’s bingo halls in Grand Forks brought in $436,500 in adjusted gross proceeds in 2004. In 2005, that number dropped to $266,000, Gibbens said.

“It’s not a huge drop, but it’s significant,” he said. “If it continues, we’re going to have to continue reducing services.”

Gibbens, who admitted that the fourth quarter typically is the worse for sales, said the decrease is not the result of poor management.

“We’ve tracked numbers from Day One and we’ve been on an increasing mode over the years,” he said. “The day the smoking ban started, our income dropped, and it has stayed in that low number.”

NDAD officials said they haven’t had similar figures since 1989. The nonprofit charitable organization has been in business for 30 years.

Part of the problem, Gibbens said, is that they’re losing high rollers, who typically are smokers, to casinos in Minnesota, where there are no smoking laws.

“That’s where our competition is coming from,” Gibbens said.