VIDEO RAFFLE

Vets and fraternals file for declaratory judgment, receive temporary restraining order

Video raffle system is permitted to operate while court considers case

Today the Ohio Veterans and Fraternal Charitable Coalition and other parties filed suit in Franklin County Common Pleas Court seeking declaratory judgment on the legality of charitable video raffle terminals at our member organization posts and lodges.
Last week, after the legislature adjourned for the remainder of 2013, we abided by the Attorney General’s request to shut down the terminals since no legislation would be considered until the legislature returns in January.  While we understand that the Attorney General’s office was simply doing its job, this was costing our charities over $15,000 per day at a time of year when charitable requests are at their peak.  We could not stand by and do nothing when we believe the video raffle system we are operating is already legal under Ohio law.
So we took the matter to court where we received a temporary restraining order against the State of Ohio while the court considers the case.  This will allow our posts and lodges to continue raising charitable funds through the centralized video raffle system.  Every single dollar raised by the raffle program is tracked electronically in real time and accounted for on our transparent reporting system.  Since its inception, our charitable video raffle program has raised over $6 million for charities.
Our first priority has and will remain to encourage the legislature to pass HB 325 (Rep. Rick Perales), which would clarify state law with regard to the legality of video forms of bingo conducted for charity.  Under Ohio law, our organizations are already permitted to play various forms of charitable bingo in order to raise funds to support our post/lodges and local 501c3 charities, with the net revenue being split 50/50.  HB 325 would simply clarify that we are allowed to play these same games in a more entertaining video format.  The bill would also keep regulatory authority over charitable video bingo with the Attorney General.
We are hopeful that soon after the House returns in January, HB 325 will be scheduled for sponsor testimony in the Policy and Legislative Oversight Committee.  In the meantime, today’s TRO will allow our organizations to continue to raise funds to support their posts/lodges and their designated charities.
The Ohio Lottery Commission continues to offer its video gaming terminals to our organizations.  But as we’ve said in the past, the state commanders and leaders of our member organizations have unanimously decided to discourage posts and lodges from signing contracts with the Lottery because of serious concerns we have with the program.  Click here to see the letter.  Some of those concerns are:
 

• The proposed Lottery program may be unconstitutional.  The Ohio Constitution clearly states that all Lottery revenue must go towards funding education.  We recently sought a legal opinion from a trusted law firm on this issue.  The opinion states that the Lottery program “violates Ohio's constitution.  Specifically, it disregards Article XV, Section 6, which mandates that the entire net proceeds of a state lottery be used solely for education. Because the Proposed Deal runs afoul of the Ohio Constitution, it should not be approved or funded.” Click here to see the legal opinion memo.  Based on this opinion, there are no guarantees that our 501c3 charities will receive a single nickel from the Lottery’s program.
• The Lottery program would give 60% of the revenue to a foreign vendor, and nothing to our local charities.  Under the Lottery’s program, 60% percent of the revenue will go to Intralot, a foreign company based in Athens, Greece.  The Lottery will take 15% and give posts/lodges 25%. Nothing will go to our local 501c3 charities.  Under the current OVFCC raffle program, the vendor receives 40% of the revenue and the charities and posts/lodges receive 60%, or 30% each.
• The Lottery’s next step will be to take over paper forms of bingo. We’ve recently confirmed that the Lottery also has plans to try to take over paper forms of gaming at our posts and lodges, effectively doing away with charitable gaming as we know it.

It’s unfortunate that the legislature has not taken action on this issue and we remain hopeful that legislation will be passed in early 2014.  This has put us in a position where we had no other option but to go to court.  Otherwise our organizations and charities would lose millions of dollars in vital funding.

We would greatly appreciate support for HB 325, which would resolve this situation through sound policy rather than a court battle.