Bingo audits still going

Investigation may take months

Friday, May 16, 2008

Meanwhile Gov. Martin O’Malley on Tuesday signed into law a bill that will phase out all the devices statewide by next July. Those in St. Mary’s County, however, will be banned starting July 1. Violators would face up to one year in prison and a maximum fine of $1,000.

Comptroller Peter V.R. Franchot (D) said he has been alarmed by some of his auditors’ preliminary findings.

‘‘There are lots of unexplained piles of cash and very few written records and that’s a toxic combination,” he said.

Citing confidentiality laws, Franchot declined to elaborate on specific findings or disclose which businesses’ records are being reviewed.

The audit, which began in March, could take months to complete, said Franchot’s spokesman Joseph Shapiro. The comptroller’s compliance division has 7 to 10 auditors, but it’s unknown how many of them are working on the case

‘‘We are actively involved in trying to get to the bottom of whether these machines are operating legally in terms of tax compliance,” said Christine DuRay, a spokeswoman for Franchot.

The bill outlawing the gambling machines signed on Tuesday became a top priority for legislative leaders during the 2008 legislative session amid concerns that the proliferation of the electronic devices generated no revenue for the state and would jeopardize passage of a November referendum legalizing slot machines controlled by the state.

Manufacturers, vendors and nonprofit groups who receive a portion of the gaming proceeds lobbied unsuccessfully to preserve the machines, some of which are legal under a 2001 court ruling.

A St. Mary’s County Circuit Court judge ruled earlier this month that machines which print and dispense tickets in a predetermined fashion are legal, reversing an earlier finding by an assistant attorney general that said the machines were illegal. The opinion by Judge Karen H. Abrams in favor of Fred’s Liquors in Charlotte Hall permits organizations to use up to five machines daily or any number during special events such as casino night fundraisers that nonprofits and other groups regularly host.

The newly signed law allows establishments that have had what are called electronic bingo machines for five years to continue operating them until Jan. 1 and gives those in use for more than 10 years until July 1, 2009 to remove their machines. Advocates said they hope to revisit the legislation during next year’s General Assembly session.