Committee backs bill letting veterans’ clubs use a portion of gaming proceeds for food and drink

The Senate Judiciary Committee heard extended testimony and voted to recommend approval for Senate Bill 2288, which would allow veterans organizations to use up to 20% of net proceeds from charitable gaming each quarter for food and beverage costs in operating a veterans club.

Senator Kent Dever, sponsor of SB 2288, told the committee that many veterans clubs rely on gaming proceeds to keep facilities open and to fund community activities. "These clubs would not exist without gaming and gaming would not exist without the club," Dever said, adding the proposed 20% cap on net proceeds was intended to give existing clubs "a fighting chance to stay open." He said the measure was limited to veterans organizations and would apply to a single club location per organization.

Deb McDaniel, director of the Gaming Division in the Attorney General’s Office, said the office read the bill to permit veterans organizations to use up to 20% of the 40% net proceeds available for charitable purposes (that is, about 8% of gross receipts) for wholesale food and beverage costs; she stressed the bill would regulate wholesale costs, not customer discounts. Scott Meske of the North Dakota Gaming Alliance and several veterans and veterans-organization representatives — including Wayne Trottier, Chris Eberts and Fred Rios — testified in support, describing facilities’ community roles and financial pressure from inflation and expanded gaming options elsewhere.

Meske described the breakdown of funds in charitable gaming as testimony: "$100 goes into the machine, $90 gets paid out, 12% goes to the state for gaming taxes; the rest is the charitable net proceeds," he said, explaining roughly how operating costs and charitable disbursements are calculated.

During questioning senators sought clarification about whether the 20% applied to gross or net proceeds and whether alcohol costs were included. McDaniel and witnesses confirmed the bill as drafted applies to net proceeds and includes wholesale costs for alcohol. After discussion the committee voted in favor of a due-pass recommendation for SB 2288.