Colorado Ballot Initiative Analysis: Amendment C (2020)

Colorado Amendment C: Charitable Bingo and Raffles Amendment

Summary

Current Colorado law allows charities that have existed for five years to obtain a gaming license and hire managers and operators to administer charitable games as long as they are unpaid volunteers. Charitable games are defined as including bingo, pull-tab games, and raffles.

Amendment C would change the state constitution to allow charities that have existed for three years to obtain a gaming license and allow managers and operators to be paid up to the minimum wage.

Fiscal Impact

If passed, the Legislative Council Staff expects Amendment C to raise $5,200 in state revenue per year in FY 2020-21 and FY 2021-22 assuming a five percent increase in the number of charitable gaming licenses granted. The costs of reviewing and processing additional license applications are expected to amount to $82,720 in FY 2020-21 and $37,404 in FY 2021-22.

Proponents Argument For

There are no official committees or organizations dedicated to supporting the amendment. However, one advocate argues that:

Bingo-raffle games are an opportunity for nonprofit organizations to raise funds for their programs. Allowing nonprofit organizations to compensate workers reduces the burden on nonprofits to provide volunteers to operate the games. Expanding licenses to newer nonprofit organizations removes a barrier and provides them with additional fundraising opportunities. By increasing access to bingo-raffle fundraising, this measure may help increase funding for nonprofit organizations.

Opponents’ Argument Against

There is also no official opposition group. But one editorial says the arguments against are:

Professionalizing bingo-raffle operations undermines their charitable fundraising purpose. Paying workers increases overhead to operate games, potentially reducing the amount of money nonprofit organizations are able to raise and dedicate to their core mission. By removing the requirement that workers be volunteers and expanding the number of nonprofits that participate, bingo-raffle games become more like for-profit gambling than charitable fundraising.

Discussion

In terms of Colorado’s overall financial health, Amendment C will make no difference. Aside from the initial costs of implementing the law, it’s reasonable to expect that the measure would have a positive impact over the long term. But the revenue will not make a significant difference to the state’s budget.

The main benefits of Amendment C come from allowing individual charities the freedom and ability to raise money to address the issues they work on. The requirement that charities must exist for five years before obtaining a gaming license is arbitrary and in no way signals a charity’s credibility or qualifications. In all fairness, a three-year requirement is just as arbitrary. But lowering the requirement from five to three years would mean more Colorado charities would be able to raise money to help their goals of alleviating poverty, suffering, and other public ills.

One hypothetical objection to Amendment C might be that charities in existence for such a short time could try to game the system in order to obtain a license and may not truly be proper charities. It must be remembered that charitable gaming licenses only apply to a select number of games such as bingo and raffles. Colorado has casinos in three cities and two casinos on Indian reservations. Furthermore, sports betting was legalized in May 2020. According to the National Association of Fundraising Ticket Manufacturers, in 2018, all net proceeds from charitable gaming in Colorado amounted to $27.27 million. The likelihood of fraudulent charities being established in order to wait three years before being able to host a low yielding raffle is low to non-existent. Amendment C is a modest liberalization that would help empower Colorado’s charities to carry out their mission.

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