CC by 2.0 Randy Heinitz
Kansas, Politics

It’s All About the Benjamins

Last Tuesday, Kansans agreed – by an overwhelming margin – to amend our state constitution to include language that will allow charitable organizations to hold raffles for fundraising. What? Raffles were illegal in Kansas? Yes, they were. Like running a pot in a fantasy football league, it was considered a form of illegal gambling. Though the state obviously wasn’t beating down folks’ doors over the matter, they wanted to codify approval of the practice. And that’s A Good Thing™, right? Well, not so fast. When it comes to all things government, the road to hell is paved with good intentions. To be upfront, I was one of the 25% of people that voted no on the issue, and it’s not because I don’t want churches to be able to raise money to fix their roof. The problem wasn’t the principle, it was the policy; in my mind it would be much harder to authorize that policy and then scale it back to protect the principle rather than just draft a better policy.

Let me restate that. For the most part, I think most forms of private gambling should be legal. You want to play a friendly game of poker at your house? Do it. You want to do a raffle at the town fair? Rock on. There should be a line in the sand, like, I think setting up a row of slot machines outside your business is crossing a line. I’m open to discussion as to what would make a suitable means of differentiating This from That. Point being, I feel like the spirit of the lottery laws in Kansas should not be interpreted to restrict or prohibit individual, private, or small scale operations. “Friendly” or “social” gaming, as it’s otherwise called. Rather, it should be a means of regulating Big Gaming: casinos, race tracks, and other establishments that use gaming as a means of direct profit from their “customers.” (In Kansas, the state owns the casinos though.) This is rational, because these organizations rely on the idea that they have stacked the deck in their favor. (As a side note, casinos are one of the places where long term statistical analysis and forecasting has been really effective. Short term “lucky streaks” are virtually always balanced out by that razor-thin %1 advantage they have. Doesn’t seem like much, but it means millions of dollars to the casinos.)

So, why did this law bother me? Read it.

§3d. Regulation of “raffles” authorized. Notwithstanding the provisions of section 3 of article 15 of the constitution of the state of Kansas, the legislature may authorize the licensing, conduct and regulation of charitable raffles by nonprofit religious, charitable, fraternal, educational and veterans organizations. A raffle means a game of chance in which each participant buys a ticket or tickets from a nonprofit organization with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing. Such organizations shall not use an electronic gaming machine or vending machine to sell tickets or conduct raffles. No such nonprofit organization shall contract with a professional raffle or other lottery vendor to manage, operate or conduct any raffle. Raffles shall be licensed and regulated by the Kansas department of revenue, office of charitable gaming or successor agency.

This is pretty much exactly the kind of law I’d expect to be written, given the context of the rest of Section 3 of Article 15. That is to say, over-engineered. While by adopting this section we’ve allowed charitable raffles, we’ve also allowed Topeka to set all the rules surrounding it as they see fit. Rather than a simple statement allowing raffles, we’ve established an entire regulatory framework that also has to go around it. I’m of the mindset that we should never grant government powers without justification thereof. Topeka wants regulatory power over raffles, then they need to come back to us with justification as to why that’s necessary. Otherwise it’s just government for government’s sake. Here’s how I would have written it:

§3d. Regulation of “raffles” authorized. Notwithstanding the provisions of section 3 of article 15 of the constitution of the state of Kansas, registered nonprofit organizations shall be allowed to conduct raffles. A raffle means a game of chance in which each participant buys a ticket or tickets from a nonprofit organization with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing. Ticket purchases will be considered tax-exempt donations to the organization.

Boom. Done. No licensing. No regulation. No fees. No limitations on the specific types of nonprofit groups. No arbitrary limitations on technology. Most importantly, no taxation. If you want to authorize raffles, then just authorize raffles. Instead, we’ve set up a system where little Billy’s Boy Scout troop could have any number of licenses to acquire, fees to pay, and bookkeeping to handle to keep the state oversight group happy. Just so they can go on their group camping trip this summer. Sorry, not really, because it’ll likely be the end of the summer before the state legislature passes the legislation that will determine how this all gets implemented. How about, instead, we give these groups the benefit of the doubt?

Here’s a good example of what’s in the wheelhouse for consideration at the moment, courtesy of the Wichita Eagle:

According to the Kansas Department of Revenue, which will regulate raffles, lawmakers will be considering items such as whether the nonprofits will now need a license, how much those licenses would cost, how often a group can conduct raffles, whether raffle sales will be taxed, whether organizations need a raffle license if the prize value is minimal, and whether organizations will be able to make their own raffle tickets or must purchase them from a licensed distributor.
Fred Mann, Nonprofits hope to benefit from Kansas raffle amendment, The Wichita Eagle

What’s so wrong with a simple, straightforward solution to what is, arguably, an extremely minor issue? After all, people have been operating in a gray area with this for a long time. Usually, the ones most affected were the ones who bothered inquiring to begin with, and were told by the state not to have the raffle.

As an interesting addendum to this, included in Section 3 is a rule to specifically handle Bingo regulation. And this is what happens with this approach. Rather than generalized rules to provide simple limitations, we end up with very specific rules that just start stacking on each other over time. So, now we have a law about Bingo. And a law about raffles. And horse/dog racing. And the state lottery. We just keep bolting on rules, making it more complicated, and giving more power to Topeka to control the money involved. A common theme you’re going to get from my posts is that as we grow – both as a state and nation – our rules and concepts must become more generalized out of necessity, not more specific. Specificity is what leads to the kind of bureaucratic hellscapes movies and books are made about.

(Photo Credit: CC by 2.0 Randy Heinitz)