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Charities get new way to boost gambling efforts — credit cards

ALBANY — Someday soon, Buffalo Sabres fans playing the team foundation’s 50/50 raffle should be able to buy their tickets online and watch from their living room as winning numbers are picked during a home game’s third period.

Gun clubs that raffle off shotguns, fire departments that raffle off cash, meat and other prizes will be able to sell raffle tickets to people who want to put their gambling on a credit card.

The new relaxed restrictions for charitable organizations is coming to New York state in six months following Gov. Andrew M. Cuomo's approval last week of the latest effort to make it easier for people to gamble.

Charitable organizations that relied on raffles as fundraising vehicles have struggled to compete in recent years with the dramatic increase in casinos across upstate and more people attracted to state lottery games.

But the new Charitable Gaming Act of 2017 is set to give charitable groups a new way to use technology to expand their raffles.

It is an effort not without some controversy. Critics warn the new law further expands wagering opportunities in an already gambling-saturated New York. Further, they warn the state faces challenges in trying to enforce the law to keep the online raffle gambling out of the hands of underage gamblers or people who live far beyond New York’s borders.

“It’s another effort to extend the reach of predatory gambling,’’ said Stephen Shafer, chairman of the Coalition Against Gambling in New York. The new law may be a concession to charities like churches, youth basketball leagues and fire departments, he said, “but it’s not an appropriate move.’’

For now, the advocates are cheering and say it will help charities raise more money.

Sabres foundation pushes for change

There are many potential beneficiaries in the charitable world, but lawmakers said the Buffalo Sabres heavily promoted the effort. More precisely, its nonprofit offshoot called the Buffalo Sabres Foundation.

Assemblyman Robin Schimminger, a Kenmore Democrat and the bill’s lead sponsor in the Assembly, said other charities — including the United Way and the Boys and Girls Club of Buffalo — were involved in promoting a charitable gambling bill in 2016. But this year, the effort was largely led by the Sabres foundation.

The NHL club’s foundation, which funds various community-based groups in Western New York, has had a lobbying effort in Albany for several years to undo laws that officials say depresses its 50/50 raffle sales. The team sells raffle tickets at all 41 home games. On a busy night, when the Sabres play a top team, it might sell $25,000 worth of raffle tickets. It then splits the pot with the winner.

“It’s really going to create a lot of opportunities for us and any charity that wants to use new technology and new rules we have,’’ said Rich Jureller, president of the Buffalo Sabres Foundation.

The raffles present significant money for the foundation. The foundation last year raised more than $1.1 million in 50/50 raffle contests held at both Sabres and Buffalo Bandits lacrosse team games. It accounts for more than half of all fundraising efforts by the foundation, more than autograph sessions with players and online auctions for tickets and game-worn jerseys, Jureller said.

The Sabres for several years has pressed New York to let its fans use credit and debit cards when purchasing raffle tickets. Several years ago, the foundation hired Park Strategies LLC to represent its interests on the matter in Albany. The firm is headed by former U.S. Senator Alfonse D’Amato.

The Sabres foundation has argued that younger people often prefer credit cards over cash and that Canadian fans who attend the games in Buffalo can’t use their foreign cash to purchase raffle tickets.

Until this year, the team unsuccessfully tried to persuade Cuomo that the state’s gambling laws affecting charities were too restrictive and were written at a time when credit cards weren’t popular with most consumers. Last year, Cuomo vetoed a similar bill.

But this week, without explanation, Cuomo signed the charitable gambling measure, which passed overwhelmingly in the Legislature earlier this year.

The Sabres foundation isn’t sure of the precise impact on raffle sales except to say they are certain to rise. That’s important for its chief fundraising tool.

“Nothing has had the impact that the raffle has had. It’s revolutionized what we’ve been able to do,’’ Jureller said.

He hopes fans will now dig a bit deeper if they can slap the raffle cost’s charge onto a card. “It should certainly help us sell more tickets. And I’d imagine someone with $5 in cash would want to spend $10” if using a card to buy tickets, Jureller said.

The bill also permits charitable groups registered with the state to sell raffle tickets via the internet. In the Sabres’ case, that could mean in the future the ability for a fan to buy a ticket from their seat in the arena — or at their home — via a smartphone instead of waiting for a salesperson to come around with the raffle offerings.

Online sales, with restrictions

The online raffle issue came to a head last year when the Stafford Fire Department, a volunteer agency in Genesee County, had to halt its seven-year tradition of holding an annual automobile auction when the state moved in and said its online sales to out-of-state bettors was illegal. The suspension forced the town to raise taxes by $200,000, according to Jamie Call, president of the fire department.

Before Albany stopped the practice last year, the department was trying to raffle off an antique Corvette. Without the online sales to people in other states, the raffle wouldn’t work and officials say the new law does not change that prohibition to raffle bettors outside of a region or in other states.

“We’re hopeful, but we want to make sure we’re doing everything legal and correct in the state’s eyes,’’ Call said of the new law.

But he worried that the new law — even with its online sales and credit card components — will not go far enough to bring back the department’s raffle that brought $250,000 in charitable donations.

Starting in six months, when the law takes effect, charities can advertise their raffle offerings online, and then sell tickets online to consumers using credit or debit cards. One of the bill sponsors, Senator Patrick Gallivan, an Elma Republican, said the online authorization will restrict the sales to purely locally based consumers. The Sabres believe it can sell online to people in Erie County and eight surrounding counties, except to people who are buying tickets while located in any locality that might ban the online sales.

A spokesman for the state Gaming Commission pointed to state rules pertaining to raffles. They state that charities can sell raffle tickets outside its premises provided local governments have OK'd such games of chance within their jurisdictions. Those sales can occur in the county in which the charity is located or in contiguous counties only if the charity has been gotten a raffle-selling license from those localities.

The Gaming Commission, which regulates all forms of gambling in New York, will be devising new rules in the coming six months to guide how the new charitable gambling law will be implemented.

A gambling loophole?

One critic of the new law believes for-profit companies could take advantage of the online and credit card authorization for charities. Sen. Liz Krueger, a Manhattan Democrat and one of four senators who opposed the bill when it was handily passed at the end of session on June, says for-profit companies will be able to contract with nonprofit charities to sell raffle tickets online.

“They’ll give (the charities) pennies on the dollar and massively expand online gambling in the state of New York,’’ Krueger said.

Online raffle ticket purchasers using their credit cards will find themselves besieged with marketing come-ons by internet-based gambling outlets, the lawmaker predicted.

“Online gambling is far, far more addictive than other forms of gambling and there are all kinds of research showing that people programming apps and computer gaming are actually successfully modeling gambling addiction … The danger of this kind of gambling is very real and should be looked at very seriously before government is endorsing or supporting the expansion,’’ Krueger said.

Gallivan, the Senate sponsor, said he does not share the concerns by some critics that the online and credit card sales of raffles will lead to more gambling addicts. Most raffle purchasers do so to support a particular charity, he said.

“If someone is inclined to gamble and to gamble too much, I think they’re going to go where the riches are greater and that’s a casino somewhere,’’ Gallivan said.

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