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Posted on Sat. Oct. 13, 2007 - 07:11 am EDT

A COLUMN BY KEVIN LEININGER

Gambling law creates headaches

Specific guidelines for charities trade one set of problems for another.

Officers with the state’s newly created Gaming Control Division swooped into Kendallville this week, arresting people and confiscating cash and equipment allegedly connected to illegal gambling.

But if LaShonda Wilcox’s Para- dise Billiards had simply been a bit more “charitable,” she might be counting her share of the take today – not facing up to three years in prison.

The rise, fall and rising again of Fort Wayne’s Hold ’em Palace – and its imminent marriage to the Jaycees – proves it.

When I first wrote about the Palace 14 months ago, the poker-for-profit casino was, to be generous, operating on the edge of the law. State law at the time made it a felony to conduct “banking or percentage” card games or to “accept or offer to accept, for profit, money or other property risked in gambling.”

Owner Caream Kamide, however, coyly suggested the business at 5125 Executive Blvd. was perfectly legal because he established the winnings and paid out not in cash but in gift cards redeemable at his Little Vegas gambling-supply business next door. Just 5 percent of the cards’ value had to be used at Little Vegas, however; the rest apparently was convertible to cash. As one player said at the time, “You could win $1,000 here on a Friday night.”

Despite curiosity from the local prosecutor and police, Kamide’s legal sleight-of-hand prevented a Kendallville-style raid – until a change in state law July 1 rendered the question moot by making for-profit card games unambiguously illegal. The Hold ’em Palace quietly folded.

But that is changing. According to the Web sites of both the Hold ’em Palace and Fort Wayne Jaycees, the Palace will reopen later this month under a license granted by the Indiana Gaming Commission.

“What previously could have been considered by some to be illegal will now be legal as long as it is associated with a charitable operation,” Allen County Prosecutor Karen Richards said, making little effort to hide her frustration over a law that was intended to clarify gambling enforcement but succeeded only in trading one set of problems for another.

The legislature’s intent was noble enough, said State Sen. David Long, R-Fort Wayne, who helped pushed Senate Bill 1510 through the General Assembly: Nonprofit agencies often stage big-money fundraisers featuring bingo, casino nights or other forms of gambling, and had grown concerned the state would crack down on them along with the back-room casinos that had become common in bars, pool halls and vacant storefronts. So state lawmakers established specific gambling guidelines for charities, including the annual gaming license sought by the Fort Wayne Jaycees.

According to Diane Freeman, the state commission’s director of charitable gaming, the annual license would allow the Jaycees and other charities to offer gambling no more than three days a week, with no more than two of those days being consecutive. So it’s probably only a matter of time until the Hold ’em Palace is back in business.

All for a good cause, of course. The Jaycees didn’t return several phone calls but, according to its Web site, the local service organization for people ages 21 to 39 – its name is short for “Junior Chamber” – has donated more than $200,000 to charities since 2000.

“The rationale is that charitable gaming is set up for the purpose of giving money to not-for-profit purposes,” Freeman said.

But the problems here are many, and obvious.

For one thing, it is only a matter of time before more charities discover gambling – or are created for that very purpose, despite the law’s attempt to define “qualified” charitable organizations (such as the requirement that gaming charities be at least 10 years old).

For another, as Freeman noted, charities are not required to give away a specific percent of their gaming revenue unless gambling accounts for more than 90 percent of their income – in which case 60 percent of gaming funds must be donated.

Last, but hardly least: The law no longer pretends to make a moral judgment about gambling, which is now officially good if used for state-sanctioned purposes and bad if simply done for private pleasure or profit.

Kamide said he doesn’t really care. He expects to make money by selling or leasing gambling equipment to suddenly legal casinos – without having to worry about the legal consequences (the state fined him $5,000 in 1998 after he organized and staffed fundraisers for five local charities).

Richards, however, has to care. “(Prosecutors) had hoped gambling would either all be legal or illegal,” she said. “The law hasn’t solved the enforcement problem. Other than the state getting its cut, what’s the difference between a horse track or a Cherry Master (machine) in a bar?”

Good question. Long said he’ll look for answers that might show whether the budding Jaycees-Palace partnership really is consistent with what he and other legislators had in mind.


Kevin Leininger’s column reflects his opinion, not necessarily that of The News-Sentinel. Contact him at kleininger@news-sentinel.com, or call 461-8355.


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