Cape Gazette
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Veterans rally to protect revenue

Local Elks join fight to oppose ban on slot machines
By Kara Nuzback | Jan 11, 2013
Veterans Organizations, social clubs and other nonprofit organizations from across Delaware protested at Legislative hall in Dover seeking new legislation that would allow video slot machines in their clubs. At right is Bob Elliott of Long Neck and American Legion Post 28.

Dover — A sea of people swarmed Legislative Hall in Dover Jan.10, many of them in military uniforms, others carrying signs with messages such as, “Who declared war on nonprofit organizations?”

Hundreds of veterans and their families traveled to Dover from throughout Delaware to tell their elected officials to save a major source of revenue for their groups. Adding to their numbers were members of Cape Henlopen Elks Lodge and other fraternal organizations from across the state.

Numerous facilities were notified by a letter from state police that operating slot machines is in violation of state gambling laws, and if caught, the organizations face revocation of their liquor licenses.

The letter, signed by Delaware Alcohol and Tobacco Enforcement Director John Yeoman and Delaware State Police Col. Robert Coupe, is dated Oct. 22, but organizations say they did not receive it until after the Nov. 6 election. Some members of veterans’ organizations say the sudden enforcement is the result of pressure from Delaware’s three casinos.

The organizations are now battling to legalize the machines.

Legislators, including House Speaker Pete Schwartzkopf, D-Rehoboth Beach, Rep. John Atkins, D-Millsboro, and Sen. Gerald Hocker, R-Ocean View, stood outside the front door of Legislative Hall, surrounded by protesters.  Schwartzkopf tried to answer questions one-on-one.

Milton resident Tom Jones, a member of the David C. Dolby Sussex American Veterans in Millsboro, Delaware Veterans Coalition and the American Legion, asked why the House and Senate could not pass a joint resolution to issue a stay on the gambling law for fraternal organizations.

“We can’t do this,” Schwartzkopf said.  “We have to follow the constitution.  We have to follow the law.”

Jim Gallagher, of American Legion Post 28 in Oak Orchard, said some bars and restaurants are continuing to operate slots machines, while fraternal organizations have stopped to comply with the law.  “Why isn’t somebody out there enforcing them?” Gallagher asked.

Schwartzkopf said he hopes the law is being enforced universally.  “Nobody can tell you to go out and break the law,” he said.

Elks join with veterans

Steve Pepe, of the Cape Henlopen Elks Lodge, said his organization gives thousands back to the community.  “Please realize it is imperative that we continue to operate,” Pepe said.

Schwartzkopf said, “That’s one of the reasons we want to help.”

In an earlier phone conversation, Schwartzkopf said the Delaware Constitution prohibits gambling except for state-sponsored lotteries; the state’s three casinos are considered state-sponsored lotteries.  “We could either make them part of the casino law, or we could change the Constitution.  I’m not in favor of changing the Constitution,” he said.

A change in the Delaware Constitution would require a two-thirds majority vote by two consecutive General Assemblies. “I think we can get around that,” Schwartzkopf said.

“If we put them into the casino law, then carve out a section, we can do it,” he said.  “I do see a fix coming.”

To comply with the constitution, veterans would have to give some revenue from the slot machines to the state.  State regulations would protect the organizations from vendors, many of whom, Schwartzkopf said, are taking advantage of the veterans.

Schwartzkopf said it is not unusual for slot machine vendors to take 50 percent to 60 percent of the profits from the veterans’ organizations they service.  He said in Delaware casinos, vendors receive only 6 percent of the profit.

Who should be exempt?

Deciding which organizations would be allowed to operate slot machines is another battle, Schwartzkopf said.  “That’s going to be a fight,” he said.

If only the three national veterans organizations – Veterans of Foreign Wars, American Legion and AMVETS – are included, legislators with Elks or Moose lodges in their constituency could oppose the bill, Schwartzkopf said.

Pepe said legislation that excludes the Elks Lodge would not pass the General Assembly.  “We out-support a lot of these organizations,” he said.  “We give a lot of money.”

Pepe said the Cape Henlopen Elks Lodge needs $75,000 before Monday, April 1 – the start of the fiscal year – to make up for the funds they have lost since unplugging slot machines.

Elks Treasurer John Loftus said if revenues dwindle, the lodge would have to stop making charitable donations.

Loftus said only members can play the slot machines, and it is the equivalent of a member donation.  “We are not in competition with the casinos,” Loftus said.  “We are simply recycling our own money.”

Pepe said the fraternal organizations should not be compared to casinos.  “The casinos don’t help communities,” he said.

“It’s sad that we have to sit back and say ‘no’ to these people we’ve been helping for years,” Pepe said.  “I’m so frustrated.”

A solution will not be reached this month, but, Schwartzkopf said, he has been working with the office of Gov. Jack Markell and Senate Pro Tempore Patricia Blevins, D-Elsmere, to craft legislation that would allow only veterans’ organizations to continue using slot machines for fundraising.

“They do a lot of good things with the money,” Schwartzkopf said.  “If you’re going to have gaming, I like to see it stay in the community where it came from.”

Jones said representatives of the fraternal organizations were scheduled to meet Jan. 10 with Delaware Secretary of Finance Tom Cook and Markell’s Chief of Staff Greg Patterson to review a proposal.  “In the mean time, we think we have all the legislators on our side,” Jones said.

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