House committee hears widespread opposition to gaming bill that would narrow who may conduct charitable gaming

Senate Bill 2035, a Judiciary-committee bill that narrows definitions of "public spirited organizations" and revises raffle and eligible-use language, drew broad opposition in the House Education Committee hearing. Presenters said the bill, as written, would unintentionally remove long-standing charitable gaming authority from many local organizations that rely on proceeds to fund community programs and economic development.

Senator Yana Merinal (District 19) introduced the bill and said it reflects the judiciary interim committee’s effort to return the statutory definition of public spirited organizations to its original intent and add guardrails on broad categories such as tourism and adult amateur athletics. Legislative counsel Austin Gunderson provided neutral, technical explanation of the bill’s sections and said the measure clarifies definitions and updates related raffle and eligible-use code sections (N.D.C.C. 53-06.103, 53-06.110.1 and 53-06.1-11.1).

Testimony in opposition came from a wide set of groups. Bill Kalanick of the Charitable Gaming Association of North Dakota said the bill’s wording is "highly subjective and open to various interpretations" and warned it could remove amateur sports, tourism and other organizations from eligibility while offering no grandfathering for existing operators. Sherry Grossman, CEO of the Bismarck-Mandan Convention and Visitors Bureau, said CVBs have conducted gaming since 1993 and rely on gaming proceeds for marketing, grant matches and grants that support local festivals and attractions; she urged a do-not-pass or an amendment to explicitly preserve CVB authority.

Scott Meske of the North Dakota Gaming Alliance and other witnesses described local examples: Mandan Baseball’s use of gaming proceeds to help build a complex; small rural CVBs and community development organizations that depend on gaming revenue for events, marketing and facilities; snowmobile and curling clubs that use proceeds for trails, scholarships, youth activities and ice-plant upkeep. Sam Miller, vice president of the Ridge Runner Snowmobile Club, described that club’s years of giving to playgrounds, emergency services and youth programming and said loss of gaming authority would jeopardize those functions. Representatives from Drayton and Grafton curling clubs said gaming helped their clubs survive, support youth programming and host regional events.

The charitable gaming division director in the Attorney General’s office, Deb McDaniel, testified in neutral capacity and summarized current licensing and oversight practice: state licenses require domestic nonprofit status, review of articles of incorporation, bylaws and minutes, and the applicant generally must have been fulfilling its primary purpose for two years before applying. McDaniel described the division’s workload — about 100 audits and many complaints annually — and framed the committee’s choice as giving the office clearer statutory guidance about who the legislative body intends should be given the privilege to conduct gaming. "We're just trying to find a definition of what is a public spirited organization who can conduct gaming," McDaniel said.

Several speakers and organizations urged the committee to add a grandfathering clause or clarifying language to prevent current licensees and small rural organizations from suddenly losing access to gaming revenue. Testifiers highlighted that state law allows up to 60 percent of gaming revenue for operating expenses and requires that at least 40 percent be used for eligible charitable purposes; many speakers said they keep operating costs below the 60 percent cap and spend the remainder on local projects.

The hearing included no committee vote on SB 2035; the committee took testimony and closed the hearing without recorded action that day. Multiple witnesses asked the committee to consider amendments that would explicitly preserve convention and visitors bureaus and community development organizations recognized by local governing bodies, or to add a grandfathering provision.

Key technical details raised in testimony: the bill would remove the phrase "amateur sports competition" and the term "adult amateur athletic activities" from eligible purposes in multiple places; the attorney general’s office evaluates applicants’ articles, bylaws and minutes and may deny licenses when an applicant has not fulfilled its primary purpose for two years; charitable gaming reporting rules require quarterly reporting of net proceeds and the gaming division conducts audits and enforces compliance. Testimony contained repeated requests for clearer statutory language rather than a broad narrowing of who may conduct gaming.

No formal committee action was recorded during this hearing; the committee closed the record and moved on to other business.