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David Berry, director of gaming for the Clark County Band Boosters, has a suggestion for local agencies that depend on charitable gaming to raise funds.

“We need to come up with other forms of income, other forms of fundraising,” he said.

That’s because Berry is skeptical of a new proposal from the state Department of Charitable Gaming, which is seeking to implement a computerized accounting system designed to monitor gaming in Kentucky and cut costs to charities.

Department officials presented the proposal to about 50 charity representatives Wednesday night as part of a state-wide sweep to promote the program, address concerns and hear public discussion.

If successful, proponents say the program will better regulate the charitable gaming industry and eliminate loads of paperwork and hassle. But, critics fear it could amount to a bureaucratic overreach of government that could harm charities in the end.

According to the department, about $100 million of gaming income goes unreported in the $500 million-per-year industry. Officials say that amounts to a $10 million annual loss for charities.

Officials also estimate that another $600,000 is unrecovered from bad checks and $300,000 is squandered on bookkeeping.

State Gaming Commissioner Henry Lackey said he has spoken with more than 50 organizations about the cost of manual accounting and has spent more than a year discussing options to simplify the process and reduce paper work.

“One thing stuck out in my mind, how much hard work it is to do that and every bit of it is manually tabulated,” he said, adding that Kentucky’s two other forms of gaming, horse racing and the lottery, are computerized.

He also suggested that many in the gaming industry abuse funds or purposely neglect reporting.

“Not everybody in charitable gaming has the best interest in the charity.” he said. “This is a completely self-reported industry with very little ability to verify information that is given.”

According to the department, pull tabs account for about 76 percent of all gaming revenue while bingo generates about 20 percent.

Officials propose establishing a “real-time” computer program that would monitor inventory, sales and revenue in the industry and report to the department by satellite. The department would provide charities with hardware and software systems along with installation and training.

The department also wants to bid out bulk contracts for gaming supplies.

Lackey said the contracts could save the industry as much as $400 million, which adds to savings from eliminating bad checks and bookkeeping.

Officials believe they can use that money to fund the program. But Lackey acknowledges that more concrete information is needed before the department can make a final decision.

Over the next five weeks, officials plan to issue requests for proposals to determine how much the program would cost.

If the figures prove favorable, the department plans to pursue legislation in January. Otherwise, Lackey said the department will not push the program if numbers fail to balance out.

“We are not trying to hurt people in charitable gaming,” he said. “If we did that, we wouldn’t have a job.”

Still, several in Clark County have concerns.

Charles Eury, a member of the Elks Lodge, said the organization relies on revenue from pull tabs and bingo. Although the accounting process is manual, he doesn’t consider it complicated or time consuming.

“To me its like a lot of things,” he said. “The proposal obviously sounds very good — probably too good to be true.”

Buddy Dotson, treasurer for the Clark County Music Alumni, fears that government contracts will harm the market for gaming supplies. The organization chooses from about 20 distributors when buying pull tabs now.

“What’s going to keep (the department) from charging us whatever they want to,” he said. “I like the competition.”

The Clark County Music Alumni uses charitable gaming to fund scholarships each year.

For Berry, he said the Band Boosters raise 90 percent of their funds through bingo and pull tabs. He is concerned the changes could hurt the group’s ability to generate money.

“If they can pull it off I think its a good idea,” he said. But he added, “I don’t think they can make it work the way they say.”

Contact Mike Wynn at mwynn@winchestersun.com.

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