The Department of Charitable Gaming intends to introduce legislation in January, 2010, that will allow the Department to take over the manufacturing and distribution of charitable gaming supplies in Kentucky.

Under the DCG's plan, licensed organizations in Kentucky stand to lose millions of dollars in charity gaming revenues.

The State will decide who you may purchase supplies from.

Relationships that you have built with trusted distributors will be eliminated.

  • The state will contract with one or two distributors who will be the only source for charity gaming supplies in the state. Even if your distributor bids and wins, the state will choose what you use, not the exclusive products your distributor would like to sell you.
  • The distributor may or may not be located near you and may or may not be familiar to you. Say goodbye to your local distributor because he or she will likely be out of business. But to quote the DCG representatives, "they have 49 other states to sell in!" And the job loss, "is not my concern."
  • Today, the distributors work to please you, under this proposal, they will work to please the state.

The State will decide what supplies you may purchase.

Product variety and your ability to differentiate your location from your neighbors will disappear.

  • The state will issue contracts; for bingo equipment and supplies, for charity game tickets and for electronic card minders. You will have no choice in the equipment or supplies that you purchase. The state will decide what equipment and supplies will be available to you in the contracts. You will have to purchase new, approved equipment!
  • There will be only 15 to 17 pull-tab games available for your purchase. You must play those 15-17 games until the state decides to make different games available to you. All other games, including many games popular to your customers today, will become illegal. Oh yeah, and according to the state, "some play styles will be eliminated." What play styles are they talking about, event games, merchandise tickets or maybe they will eliminate all seal card games and only have instant games available just like the lottery!
  • If the card minders you have invested in, trained your staff on and acclimated your customers to, are not produced by the small group of manufacturers that is selected by the state's contract, you will have to replace all of your card minders with the state-selected brand, whether you like it or not.

The State will decide what price you pay for supplies and equipment

Your ability to shop for the best price among distributors will no longer be an option.

  • The State will decide how much you will pay for each deal of pull-tabs, bingo paper and electronic card minders.
  • The DCG says that under his plan, the cost of gaming supplies will not increase. In Michigan, the model for the DCG's plan, the average cost for a deal of pull-tabs is $220!

Charitable Gaming revenues will plummet

States that utilize a state bid model are not nearly as successful as those that use open market distribution.

  • Studies show that a lack of variety in games results in decreased sales.
    • "For each percentage decline in the number of game types available, it is estimated that the number of game units [deals] sold will decline by half as much." (Source, KPMG Gaming Study)
    • Under the DCG's plan, the variety of available games will be reduced by 80%. This means the number of deals sold will drop by 40%! When this happens, your fees/tax will increase dramatically!
  • In the three states that use a state bid system for the distribution of charity game supplies, the average gross receipts per licensed organization for bingo and pull-tabs is $64,539. In Kentucky, under the current distribution system, the average gross receipts per organization for bingo and pull-tab sales is $617,832.48! The average gross receipts per licensed organization for the four other top charity gaming states that use free market distribution systems is $571,907.
  • In Ontario, they had the second largest pull tab market in North America. They put the manufacturing and distribution of pull tabs out for bid. After watching pull tab revenues plummet more than 65%, the government relented and went back to a private business model but it was too late. That market has still not recovered!
  • If Kentucky follows the pattern of the other state bid states, Kentucky charities stand to lose millions of dollars in charity gaming revenues!

What You Can Do

Question State officials and ask for answers by contacting the Governor's Office at (502) 564-2611, or reach out to your State Representative or State Senator. All state legislators can be reached by phone through the legislative Message Line at (800) 372-7181 or via email. All legislative emails can be found at http://www.lrc.ky.gov/whoswho/email.htm.