Millions of dollars are made every year through Charitable Bingo in Texas. Some of that money is supposed to go to charity. But because of limited oversight by the state, some bingo management companies could be taking advantage of the program.
The good news is, most of the money made by Charitable Bingo goes right back out to the players in the form of cash prizes. After salaries and fees are paid, the left over money is supposed to go to non-profit organizations. But News 4 WOAI Trouble Shooter Mireya Villarreal found out some bingo management companies are charging so much for expenses very little is left for charity.
"We were in business for eleven months. When my eyes did open and I'm studying the books and everything, you see all this money coming in. But on the other side, everybody else is, the money is going out,” Percy Spence, Commander of the Randolph Area, Chapter 17, of the Disabled American Veterans, remembers.
Percy’s organization signed up for charitable bingo about two years ago. The hall they were working with was making hundreds of thousands of dollars a year, but they were also charging Percy through the roof for expenses. To keep from going bankrupt he eventually had to surrender the non profit's bingo license.
“When you started to look at the numbers, where was the money going,” Trouble Shooter Mireya Villarreal asked.
“It's very hard to tell. The expenses were more than what we were bringing in,” Percy said.
Bingo halls are regulated by the Texas Lottery Commission (Charitable Bingo Division) and the Bingo Enabling act. When it comes down to expenses, the rules are vague. All a management company has to do is claim that their expenses are reasonable and necessary.
"Charitable Bingo in Texas is a complex, task based operation, with opportunities for fraud,” Phil Sanderson noted back on April 10, 2012.
Phil Sanderson, the Director of the Charitable Bingo Division, didn't want to speak with us on camera about our investigation. But we found video of him testifying before the state's Sunset Committee in early April about a recent review
. The review
released by the committee points out charitable bingo could be being taken advantage of because of a lack of oversight.
"There is a lack of financial monitoring. I think increased monitoring would help impact, possibly, the charitable distributions,” Sanderson said that day.
Sanderson claims they just don't have enough money in their budget to audit or inspect halls as often has they'd like.
We took our findings to Representative Jose Menendez. He sits on a state committee that oversees the Texas Lottery Commission and Charitable Bingo.
"We should do a lengthy audit of all of them to see what percentage is actually helping charities,” Representative Jose Menendez stated.
Representative Mendez’s office he's already working on potential legislation that would address the issues we uncovered.
"More than ever, you need to have checks and balances. You need to have the state being fully aware of what's going on. That way we can protect the operator, we can protect the charities that are supposed to be benefiting from the bingo operations, and we can protect the tax payers of Texas,” Menendez added.