Bar owners say small games of chance causing big problems
HARRISBURG — Paul Riser is a Connellsville bar owner who says he wants what state law now prevents him from having: small games of chance.
Riser has been in business for 31 years and says the private clubs that are operated by veterans’ organizations, civic and religious groups and ethnic organizations — and offer small games of chance — have a competitive advantage because they can use the proceeds of their games to pay for expenses only his food and beverage charges can cover.
“I don’t think it’s hurting me that much, but it certainly is not helping me,” said Riser, who owns Riser’s pub on Crawford Avenue.
The bar owner also says he’s not happy the Corbett administration last month agreed to give small games operators another year before they have to report the revenue, prizes and expenses associated with their operation of the games.
“I don’t see what they’re complaining about,” he said.
Thousands of civic, religious and charitable groups were supposed to begin reporting to the state the millions of dollars they make each year through gambling contests like ticket bowls, punchboards, raffles and 50/50 tickets.
Organizations like volunteer fire departments and some veterans’ organizations in western Pennsylvania have complained that the new reporting requirements are too confusing and cumbersome for them to follow. Those reasons are why state Sen. Rich Kasunic, D-Dunbar, worked to get the one-year delay and offer changes to the new law, known as Act 2.
Before Act 2 went into effect, organizations that operated small games of chance could award $5,000 a week or $260,000 a year in prizes. The rest of the money they raised had to be paid to a charity.
The new law says small games operators can award weekly prizes up to $25,000 or $1.3 million a year and they are then allowed to earmark 30 percent of what’s left for operational expenses.
The kinds of expenses Riser says his bar has to pay for from food and drink receipts.
The Pennsylvania Licensed Beverage Association, which is also known as the Pennsylvania Tavern Association, says there are 3,500 private clubs with liquor licenses that operate small games of chance. With the changes in the law, those clubs could account for $4.5 billion each year in total revenue.
Because they can use 30 percent of their profit to pay for rent, mortgages, utilities and the like, the association says they present an unfair advantage to the bars and restaurants that are not allowed to do small games of chance.
“We can’t compete. And, if you are on the same block or down the block from a private club and you’re a small family-owned business, you’re really struggling,” said Amy Christie, the association’s executive director.
Christie said her group supported changes in the small games of chance law because it offered an opportunity for a more level playing field.
The Pennsylvania Licensed Beverage Association, however, was opposed to the Corbett administration’s decision nearly a month ago to delay the requirement that small-games-of-chance operators report how much they make and award with the games.
“And that’s why we’re saying the accountability needs to be kept in play. That’s $4.5 billion that’s supposed to go to charities like hospitals, libraries, fire companies, organizations that support cancer research, humane societies,” Christie said.
The association counts 8,000 “mom-and-pop” bars and restaurants that are licensed to sell beer and liquor but are not allowed by law to offer small games of chance.
Christie said she wants those 8,000 retail licensees to also be able to incorporate small games because “it could be a great thing for small business and it could be a great thing for the state and, more importantly, it could be extra funding for charities.”
Kasunic introduced Senate Bill 144 this month to make changes in the small games law, but those changes don’t address the things Christie and Riser want.
The Fayette County lawmaker’s proposal would limit the reporting requirements for organizations that raise less than $100,000 annually through small games of chance and, among other things, it would allow an organization to keep half of its small games revenue instead of 30 percent.
Kasunic said he is open to talking to the association about its concerns, but not now.
“It’s another subject for another day,” the senator said.
Kasunic said he has his district’s volunteer fire departments in mind when he talks about the burdensome accounting and reporting requirements of the new law. They are also desperate for cash, he noted.
“Fire departments protect lives and the health and welfare of our communities,” he said. “They’re not getting paid for this. We owe them.”
Because the private clubs are able to keep 30 percent of the money they make after they pay the prize amounts and pay 70 percent to charity, Riser said they don’t have to spend food and drink revenue on rent and utilities like he does. Because of that, they can offer cheaper booze and food.
“If you can lower the prices of your product … you can get more customers,” Riser said.
Riser said he has “no qualms” about volunteer firefighter organizations that operate private clubs and small games of chance but, he says, “it’s been an uphill battle” with social clubs that boast memberships that are clearly not what was intended when they were formed.
He estimated that about 75 percent of the memberships in groups like the Sons of Italy, Slovak Society and Polish clubs are people who do not belong to those ethnic groups.
Christie said these private clubs have other advantages in that they are able to stay open until 3 a.m., which is an hour longer than retail bars, and they can allow smoking plus be open to non-members for events, dinners and dances.
She said she doesn’t buy the argument that the accounting — keeping track of gross winnings, W2 tax forms, total small games expenses, and total prizes paid — is too difficult.
“These records have supposed to have been kept all this time. In this day and age, I don’t understand why that can’t be achieved,” Christie said.
Both association members say retail bars and taverns should be allowed to offer small games of chance.
Riser said he would offer punch boards, card games and 50/50 tickets if he was allowed to sell games of chance in his pub.