SAN ANTONIO - Charitable Bingo is big business in Texas. We're talking more than $700 million made in just one year. This type of gaming is allowed because some of that money is supposed to go to charities. But News 4 WOAI Trouble Shooter Mireya Villarreal uncovered, thanks to almost no oversight by the state, very little of that money makes it to the non-profits.
Percy Spence is the commander for the Randolph Area, Chapter 17, of the Disabled American Veterans. Two years ago the organization signed on with a San Antonio bingo hall, hoping to make big money. But instead, the veterans' charity nearly went bankrupt.
Spence questioned his skills as a leader during that time, “Very embarrassing, first of all. Lot of tears at night. How did I let this happen?”
After just eleven months in the bingo business Percy's organization had to call it quits, giving up their bingo license.
“You can get in debt real quick. And this is the lottery commission and they know you're out there to make money,” Percy told us. “But if the commanders or the people in charge of these 501(c)(3)'s are not smart with the business, it can bankrupt you right quick."
Percy says he knows the bingo hall he was working with was making hundreds of thousands of dollars. But when it came down to getting their cut, they were barely making enough to pay the taxes associated with charitable bingo.
“When you started to look at the numbers, where was the money going,” Trouble Shooter Mireya Villarreal asked.
Percy answered, “It's very hard to tell. The expenses were more than what we were bringing in, basically."
Percy's story is not uncommon. For months Trouble Shooter Mireya Villarreal has been reviewing state records that document how much money is being brought in by bingo halls and how much is really going to non-profits. In 2010, bingo brought in $700 million. After cash prizes went out and salaries and fees were paid, charities across the state were given less than $34 million, that's less than 5%.
We took a close look at two management companies that run bingo halls here in San Antonio.
Garcia Properties, Inc. runs three halls, including Callaghan Bingo off Culebra and Callaghan.
Four non-profits work out of that hall, including Harps and Shamrock, Lulac Council 649, Lulac Council 4359 and Compadres for Scholarships. Last year Callaghan Bingo grossed $3.75 million dollars; however, the total amount given to their charities was only $11,449 dollars, that's less than one percent.
On several occasions we tried to speak with someone on camera from Garcia Properties, Inc., including Rosemary Garcia. Rosemary is the president of the company and in charge of their three bingo halls. She said she didn’t have time to speak with us, but over the phone the company’s CEO, Peter Garcia, told us expenses eat away at their profits. He says these charities are lucky to get what they get and if they don't like it they can take their bingo license somewhere else.
Compare that reaction to we received from to Jamal Tawil.
“It started as trying to help the church make money. They were running a bingo that was losing some money. We took it over and we start to help them. And they start making money,” Tawil explained.
Jamal owns five bingo halls in San Antonio, including Golden Bingo. Last year Golden Bingo made a little over $7.5 million and the five non-profits they house took home a total of $462,000; at 6%, that's higher than the state's average.
San Antonio State Representative Jose Menendez sits on a state committee that oversees the Texas Lottery Commission and, ultimately, Charitable Bingo. After seeing what we uncovered, Menendez is concerned.
“Charitable Bingo is supposed to be for charities,” Villarreal said during her interview with Representative Menendez.
“Exactly,” he agreed.
“Is that the case here,” she asked.
“It doesn't appear to be,” Menendez stated. “It appears their expenses are so high that the charities are getting a pittance. I would say it's a very small, nominal percentage of what the operations are bringing in on an annual basis."
The Charitable Bingo Division had its funding cut a few years ago. Directors claim they just don't have enough staff to audit and inspect bingo halls and non-profits regularly, which leaves the department open to financial theft and fraud.
"I don't have any evidence of who the bad apples are. Everybody understands that in a potential cash business, there's a potential for abuse. So, let's just say, let's let the light shine in on this industry. Lets everybody step up, put their cards on the table, open their books and let us inspect,” Representative Menendez added.
So what does the charitable bingo division have to say about our investigation? For nearly two months News 4 WOAI Trouble Shooter Mireya Villarreal has been asking to meet with the Charitable Bingo Director Phil Sanderson. He refused, saying he wasn't sure he could add value to this story.
Tuesday on News 4 WOAI – find out what Sanderson had to say to a state committee after they questioned him about these exact issues.