BINGO: Some blame casino for losses

By Aleasha Sandley, Herald Bulletin Staff Writer

September 13, 2008 11:39 pm

— ANDERSON — Around town, the twirl of the bingo cage might soon be replaced by the pull of a slot machine lever.
The bingo hall at the city’s AMVETS Brian Simpson Post 692 has increasingly become more silent, as those who joyously yell “bingo!” when they have a winning card have left the game for higher-stakes gambling at Anderson’s new Hoosier Park Casino.
Since the casino opened in June, Post 692 has seen a decrease in bingo players, from about 250-260 players a night to 130-180, leaving the post’s operations and charity work, funded by bingo and pull-tabs, floundering for more money.
“When the casino opened in June, it pretty much just annhilated all the bingo in the area as far as making a normal profit,” said Phil Ray, financial officer for Post 692. “It put us in a tailspin.”
The Indiana Gaming Commission has not done studies on whether casinos affect the profitability of charity gaming sites, like bingo halls.
“We have at this time no statistics to support that,” said Diane Freeman, director for charity gaming at the IGC. “We definitely have not done any type of statistical analysis of that so far.”
As a not-for-profit, Post 692 depends on the money earned from charity gambling to fund its overhead costs and contribute to its charitable causes. Before the casino came, it was giving about $30,000 in scholarships a year, but since has had to withdraw from that amount and cut back on other charities as well, Ray said.
“We had to cut back any way we could,” he said. “Up until this month, we were looking at possibly even closing.”
Thanks to tireless advertising and special food and beverage deals, the post has been able to bounce back some in the past couple months, rebounding to numbers a little closer to normal. But it’s too early to tell if the rebound is a permanent fix, Ray said.
“We’re trying to get them back from the casinos, and we’re having a difficult time with it,” he said.
Chesterfield’s AMVETS Basil Barkdull Post 332 also has seen a loss due to the new casino, said post official Jan Barkdull. The post has lost $10,000 a month since May, when things started going downhill. Barkdull said the loss was a combination of the casino and poor economy.
“I think it’s probably 50/50,” she said. “I’m hoping the newness of the casino is kind of wearing off.”
Post 332’s profits go to Stepping Stones, an organization with a $350,000 to $400,000 annual operating budget that provides transitional housing for homeless veterans and women going through drug court. If losses grow, the post could have to stop giving money to the shelter.
“I keep praying that’s not going to happen,” Barkdull said.
But Bob Burns, who runs bingo operations at Anderson’s Elks lodge, said summer is a slow time for bingo anyway, with players having more options for spending their time outdoors or with their children who are home from school. The Elks bingo only has been in operation since April, so it’s too soon to tell if the casino will affect it, Burns said.
“The first of October we’ll be starting to get back to normal,” he said.
While Burns thinks the casino could have had some impact on the number of bingo players, he’s also seen a decrease from bad economic factors, including high gas prices that leave players with little or no disposable income.
“As far as the casino solely being the blame, no,” he said. “You got your die-hard bingo players, so the casino’s not hurting them as far as that goes. It probably would hurt with the part-time players,”
Some people go to the casino and spend $100 in 20 minutes, then realize they could have spent $15 and played bingo for five hours with the chance of a $6,000 payout, Burns said.
It’s too early to tell if the casino is what is affecting bingo halls’ losses, said Jahnae Erpenbach, director of marketing at Hoosier Park.
“It’s really just too early to judge our impact,” she said. “Obviously we’re a new and major attraction in the area, and there are going to be so many people who want to come.”
Gambling has been allowed in Indiana for 13 years, and it doesn’t seem to have affected the bingo halls in the past, Erpenbach said.
“When you look at that and you look at the time spent with gaming in Indiana, its impact on charitable gaming has really been minimal,” she said. “Time’s going to tell how that’s going to normalize, but when you look at history, that’s been minimal.”
A loss of bingo players doesn’t just mean fewer bingo cards and chips, but also fewer pull-tabs sold, which are directly linked to the number of bingo players at the posts.
Bingo isn’t usually profitable on its own, so many bingo halls use the game to lure in those who will buy pull-tabs, where the real money is made. Every pull-tab game has a built-in profit of 20 percent, Ray said, which helped pay for bingo and the post’s operations and charities.
“We were basically putting bingo out there as a hook to buy pull-tabs,” Ray said. “That’s been the norm for bingo for the last 15 years.”
Bingo and pull-tabs feed off each other, said Burns, whose Elks bingo seems to be holding its own, even with the new casino.
“Could you ever break even on bingo? No,” Burns said. “We’re close to being able to break even, but some nights you have a little but more of a tougher time. Everything we’re taking in is going right back out.”
Anderson’s Elks bingo hasn’t been able to make many charitable contributions in its five months of operation, because it still is paying start-up costs, Burns said.
Bingo halls were concerned about another threat earlier in the year, in that the IGC might require bingo operations to be profitable on their own, without the help of pull-tabs.
“That won’t be doable for anybody in this country,” Burns said. “It would end up shutting 100 percent of all bingo halls down, and it would affect a lot of charities that benefit from what bingo halls do for them.”
Although many bingo halls were concerned they would have to show a bingo profit before they could renew their licenses, it ended up being more of a misunderstanding, Barkdull said.
“We’re looking at cumulative income based on all gaming activities,” Freeman said. “We’re looking at the positive bottom line.”
Ray’s post already is suffering from a 75 percent loss in funds since June, going from bringing in $40,000 a month to less than $10,000, he said. The average player was spending about $80 a night on pull-tabs before June, a number that is now down to about $50.
“You get 100 players in where they were buying 80 pull-tabs per player, and now it’s down to 50 or less, that in turn has made our profitability extremely low,” Ray said.
Worse yet, the high-dollar gamblers seem to be the ones who moved to the casino and stayed there, Ray said.
Although Ray hopes the Indiana General Assembly will find a way to help charity gaming organizations in the casino age, he doesn’t dispute the positive effect Hoosier Park’s casino has had on Anderson as a whole.
“The casino is a plus, but through charity gaming it’s created quite a dilemma for us,” he said. “We all understand the impact it’s had on Anderson, but not-for-profits sure took a big hit.”
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By the numbers
Madison County bingo halls’ 2006 financial information.
AMVETS Post 692 — Gross receipts: $5,452,606.335, Total expenses: $4,921,204.42, Net proceeds: $531,401.93, Amount to charity: $23,429, Amount retained: $507,972.93, Total undistributed: $0, Percent profit: 10 percent
AMVETS Post 332 — Gross receipts: $3,290,910, Total expenses: $2,939,205, Net proceeds: $351,705, Amount to charity: $286,250, Amount retained: $63,855. Total undistributed: $1,600. Percent profit: 11 percent
B.P.O. Elks Lodge No. 209 — Gross receipts: $15,943, Total expenses: $13,422, Net proceeds: $2,521, Amount to charity: $100, Amount retained: $0, Total undistributed: $$2,421, Percent profit: 16 percent
Fraternal Order of Eagles No. 1771 — Gross receipts: $2,910,872.46, Total expenses: $2,585,838.10, Net proceeds: $325,034.36, Amount to charity: $58,497.72, Amount retained: $216,419.04, Total undistributed: $50,117.60, Percent profit: 11 percent

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