Experts say evolution needed to keep charitable gambling afloat

Charitable gambling—once a juggernaut in Indiana—has declined in recent years due to the challenges navigating the COVID-19 pandemic and its ensuing supply chain disruptions and inflation, with many organizations closing down completely.

Small organizations, in particular, struggled the most during those lean months, and many are still trying to recover.

Kendra Waymira has worked at American Legion Post #437, in Selma, on and off for the last two decades, overseeing the organization’s charitable gambling activities. The money helps maintain their physical location–covering building maintenance and utility bills–and also gives back to the community, sponsoring middle school students’ annual trip to Washington D.C.

“We do make a decent profit margin with it. If we didn’t have gambling, we wouldn’t be able to help as many veterans. We wouldn’t be able to help anybody in our community–like if somebody’s house burned down or if there was a family that had gone down to a single income,” Waymira said.

Though the popularity of gambling has waxed and waned over the years, Waymira said the hit from COVID-19 was “the worst” she’d seen.

“Since COVID, people just don’t come in and now that prices are rising… I mean, people are really cutting back because they don’t have that money to gamble,” Waymira said. “I would like to see a rebound and get back to where we were, see patrons coming in and numbers coming in and (patrons) being able to spend more money gambling.”

Waymira and her organization aren’t alone. Since COVID-19 hit Indiana in 2020, charitable gambling numbers have fallen, down to $326 million for 2021 in gross receipts compared to $433 million in 2019. That is a 24% decline.

Leaders with the Indiana Gaming Commission’s charity gambling division acknowledged the declining number of license requests, which they oversee and audit for compliance.

But Mark Mason, the assistant director, noted the additional burden of supply chain problems in the “paper-intensive” business.”

Paper products could include bingo cards or raffle tickets, which charitable gambling organizations must purchase from approved vendors according to state law. But Mason said that two established distributors went out of business in the last few months.

“When I hear from an organization, when I talk to them, they’re not talking about the pandemic anymore. What they’re concerned about now is getting the supply to continue doing their gaming,” Mason said. “That doesn’t mean that places are failing – we’ve got groups that are recovering and they’re doing quite well – but the smaller organizations are the ones that are concerned (with if) they will be able to survive.”

What’s driving the decline in charitable gambling?

In a five-year analysis conducted by the Indiana Capital Chronicle, charitable gambling saw a small dip in 2017 before falling significantly in 2020 and 2021.

But longtime gambling analyst Ed Feigenbaum noted it has been in a slow decline since at least 2009, when it hit $538 million in gross receipts. Gross receipts in 2021 hit $326 million, just $15 million more than 1994, when charitable gambling first started.

In particular, bingo used to draw large crowds and millions in revenue but now lags behind other games, specifically raffle games, which routinely see high-dollar payouts. For Feigenbaum, much of that has to do with the demographics of charitable gamblers.

“Bingo was basically a game for the older demographic and we’re losing that older demographic… Baby boomers are probably the last bastion,” Feigenbaum said. “And COVID certainly killed bingo in terms of being a social activity.”

Being part of an older demographic put bingo participants at more risk for dying from COVID-19, especially in the time before vaccines mitigated that danger.

Jennifer Reske, deputy director of the Indiana Gaming Commission, said many organizations also pivoted to raffle games over bingo because they’re less labor-intensive and require fewer people to run a good event.

“Memberships in organizations are declining and because of that they need to find ways to conduct activities that fit within their new environment,” Reske said.

Feigenbaum said all gambling organizations are rethinking their approach to attracting customers, even for-profit casinos.

“Casinos were built on a different model; they were built on the model of the blue-haired old lady coming in to pull that big lever down on the slot machine,” Feigenbaum said. “(Millennials), maybe even those 10 years older… they’re not interested in that kind of solitary play.”

He noted that even Las Vegas, the historical center of gambling, offered alternative forms of entertainment, including residences with pop artists like Adele, special themed nightclubs and all-inclusive resorts.

“To a certain extent in Vegas, the casinos are incidental,” Feigenbaum said.

What’s next for charitable gambling?

When asked about the future of gambling, Reske said the Charity Gaming Division doesn’t conduct its own research or analysis but continues to focus on assisting not-for-profits with their gambling activities.

“We’re not going to minimize the challenges they face–I think they’ve been significant,” Reske said. “We’ll continue to work with organizations and listen to them and do our best to continue to provide (that) service.”

For instance, in 2019, the agency worked with legislators to streamline the licensing process to help organizations.

Feigenbaum detailed some of the changes he’d seen in the overall gambling industry, including the addition of sports betting, which attracts a younger audience than traditional gambling.

In regards to charitable gambling, few observers can forget the 2016 raffle jackpot that hit $1.89 million in Washington, at a local Knights of Columbus affiliate. The “Treasure Hunt” raffle event, now used by multiple charitable organizations, can draw hundreds of spectators over the course of several weeks and drive prizes skyward.

“It’s a different industry than it was several years ago and it’s going to have to evolve even more,” Feigenbaum said.

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.