The subject of changing the statute regulating raffles first surfaced at the Nov. 2, 2007 GAC meeting when it had been brought to the attention of the Gambling Division that some 50/50 raffles conducted by schools were exceeding the $5,000 statutory cash prize limit. Further, raffles had been reserved by law for bona fide charities, and schools were outside that definition.
At that time, the GAC decided to recommend elimination of the $5,000 cash ceiling, and broadening the definition of "charities" to include public and private schools and universities, but also to specifically exclude political campaigns. All that seemed simple enough.
But soon the issue became entangled in the ongoing debate surrounding internet gambling, which the GAC has opposed. The Montana Legislature concurred in that opposition by passing a law in 2007 specifically outlawing any internet gambling with the exception of the State Lottery and simulcast wagering or other exceptions currently allowed.
A member of a conservation group in November had asked the Council to endorse his proposal to run large-scale internet raffles within and outside the state's borders to fund acquisition of conservation easements and public rights of way to public lands. With that request, the specter of virtually unregulated national-scale raffles worth potentially millions of dollars loomed. The council nixed the requested endorsement.
Fast forward to the March 29 GAC meeting.
Representing the Montana Association of Counties (MACo), Cheryl Wood told the GAC that counties no longer wanted the burden of licensing raffles, citing no revenue stream or practical apparatus to do so, going so far as to say MACo would seek statutory changes in the next session.
In addition, Wood said, county attorneys would not pursue violations of the raffle law, for example when unlicensed lotteries were conducted, when prize limits were exceeded or even when a sponsoring organization failed to choose a winner or deliver a prize.
"Counties get no revenue but get all the headaches," Wood said, noting 90 percent of counties at a recent MACo meeting voted to pursue statutory changes to get them out of the raffle regulation business.
The GAC acknowledged the "system is broken, the wheels have come off this bus," since there is virtually non-existent regulation and enforcement and no revenue stream to provide it. Perhaps the most that could be done, said Gene Huntington, Gambling Control Division chief, was to "clean up" the statutory language to eliminate prize limits and include schools.
Council chairman John Tooke asked, "If the (GCD) took on the responsibility (of regulating and enforcing raffles), how would they pay for it--the administrative and funding apparatus?"
Huntington noted other states "very carefully regulate charitable gambling and Montana has never done that."
Council member Mark Kennedy said that without regulation and enforcement, "Fraudulent raffles will become a problem."
Several members of the council suggested if the statute wasn't being enforced, it ought to be eliminated.
However, Rich Miller, retiring executive director of the Gaming Industry Association said, at minimum, the statute currently reserves raffle activities for non-profit organizations and therefore has some merit.
Ronda Wiggers, representing the Montana Coin Machine Operators Association, said continued legal oversight is necessary because already there are those advocating potentially multi-million dollar raffles (the conservation group proposal) and, in addition, running them on the internet.
"You can't leave this unregulated," Wiggers said, "that's too scary."
However, Miller pointed out, if the state (presumably Gambling Control Division) were to take over regulation and enforcement, it is required under state law to create a revenue stream to pay for the new responsibility since it is mandated to be a self-sustaining agency.
Tooke asked if raffle permits could be made available electronically with the GCD's new internet reporting and permitting system for gaming machines. GCD's Al Arvish, who designed the state electronic reporting system for video gaming machines, said technologically it could, but at some unknown cost at a $125 per hour rate.
Council member Pam Kennedy then offered a motion to form a committee to work on the dilemma in more detail, but in a rare council occurrence, got no second to her motion.
Then councilman Tim Carson moved to simply make the originally sought changes to the statute.
Pam Kennedy spoke out in opposition to that motion, stating, "MACo has come to us with a request to change the statute; to be taken off the permitting and enforcement hook."
Chairman Tooke called for a roll call vote on Carson's motion and it tied at four votes each way, thus failing.
Tooke said, "This is a public policy issue. It cannot and should not be ignored. It requires further discussion and a meaningful solution."
Then Mark Kennedy moved to combine Pam Kennedy's and Tim Carson's motions to adopt language changes to the statute and establish a study committee. The motion passed unanimously and Tooke appointed Pam Kennedy, Mark Kennedy and councilman Rep. Mark Blasdel to the new raffle committee.
Source: The Montana Tavern Times, May, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.