CHARITABLE GAMBLING Forums offer advice for keeping it legal

Tips included being mindful of where an event is and who's running it.
YOUNGSTOWN -- When is an organization's Casino Night benefit a charitable activity and when is it a crime?
A pair of forums sponsored by the Youngstown Police Department on Tuesday at city hall attempted to answer this and other questions on charitable gambling for representatives of nonprofit organizations.
Lt. Rod Foley, commander of the police department's vice squad, moderated the forum, and members of the state attorney general's staff and the Ohio Investigative Unit also gave information on how to conduct activities such as Texas Hold 'Em poker tournaments and stay within the law.
Their advice to nonprofits for staying out of trouble: Make sure your organization is eligible to conduct a gambling event, be careful where you hold your event and who runs it, and keep complete records on payouts and proceeds.
"It's not the intention of law enforcement to stop charitable gambling," Foley said. "It's an interesting way to raise money, but we need people to be aware of the law."
And that's the part that can sometimes be tricky.
"We get a lot of questions from charitable organizations about what they can and can't do," said Jodi Elias, an investigator for the state Attorney General's office. "Our main concern is with protecting them."
Who's eligible, who's not
Foley said that many nonprofit organizations mistakenly think they are eligible to conduct gambling events when they aren't. Religious, educational and senior citizens groups are examples of tax-exempt, or 501(c)(3) organizations which are eligible, Foley said. Many fraternal or veterans' organizations are not.
Organizations which have 501(c)(3) status should have a letter on file to that effect in case the issue comes up, Foley said.
The law also limits the kinds of venues that can be used for gambling events. Organizations may use facilities which they've owned for a year, or which they've leased from fraternal or veterans' groups. But gambling events may not take place in public establishments like bars, restaurants, hotels or rented halls.
And to be totally safe, organizations should run their own events and not have an outside individual or group conduct it, forum participants said. This applies whether the charity gets all or just a portion of the proceeds.
"It's important to know where the money goes," Foley said. "If you don't, it makes your organization look bad."
Adding alcohol to the mix
The sale of alcohol is also a complicating factor in the legality of these events, Foley said. Organizations must be sure that they have the right kind of permits and that the alcohol is sold and not given away.
Permits and IRS documents are some of the essential records for these events, and organizations that run gambling events also need to keep records of prize money won and, if possible, of who attends their events.
Foley said that "80 to 90 percent" of gambling events held by charities are legal.
"I don't think that most people who violate the law are doing this intentionally," he said. "They just didn't know."
He cited an example of a Texas Hold 'Em tournament his unit closed down in February at the Itam (Italian-American Veterans) Club on South Meridian Road.
The club was not an eligible organization and did not have an eligible location for the event, Foley said. Money was returned to all participants, but no arrests were made, which is a judgment call the Vice Unit can make, Foley said.
"In that case we didn't think it was fair to charge people with public gambling if they didn't know if it was right or wrong," Foley said.
XFor more information about the laws of charitable gambling, contact the Youngstown Police Department vice squad at (330) 742-8951 or the Investigative Unit of the Ohio Department of Public Safety at (330) 644-0318.