The state of Delaware's decision to order VFW posts and American Legion establishments to cease using what were dubbed as illegal gambling machines has already led to layoffs locally and statewide.
VFW and American Legion officials said they felt blindsided by the letter because they had operated nickel and penny, electronic gambling machines for 20 to 40 years with no problems from the state. And they had come to rely on the "soft gambling" as a reliable source of revenue and philanthropy.
Veterans of Foreign Wars Department of Delaware Chairman Larry Waters said Thursday that 10 to 12 employees had already been laid off from VFWs from Ocean View to Wilmington.
Walter L. Fox Post No. 2, The American Legion in Dover already laid off eight employees and cut back its operating hours, adjutant Jeff Crouser said Thursday.
That had the fraternal organizations planning to petition the state Legislature for a redress of grievances.
The Oct. 22, 2012 letter from the Delaware Department of Safety and Homeland Security stated that Delaware State Police had learned that several social organizations, clubs and businesses had been illegally permitting patrons to play gambling devices in their establishments. The letter was signed by Alcohol & Tobacco Enforcement Chief John A. Yeomans and State Police Superintendent Col. Robert M. Coupe.
"You are in legal jeopardy," the letter stated. "Under Rule 40 of the Alcohol Beverage Control Board regulations, an organization, club or business that permits illegal gambling on its premises is subject to administrative penalties, including revocation of its liquor license. This rule is enforced by officers of the Division of Alcohol and Tobacco Enforcement.
"Further, both possession of a gambling device and providing a premise where gambling occurs are crimes under the Delaware Code, Title 11 Section 1405 and 1404. These laws are enforced by the Delaware State Police."
Crouser said all gambling machines upstairs at Walter L. Fox American Legion had been removed and the ones downstairs were shut off from within and padlocked in order to comply with the letter.
IF YOU GO
WHAT Walter L. Fox Post 2, The American Legion has organized a meeting to respond to state's decree forbidding gambling machines at VFWs, American Legions and other organizations
WHO All veterans and fraternal organizations in the state are asked to send one representative due to limited seating
WHEN 6:30 p.m. Monday, Nov. 26, 2012
WHERE 835 Bay Road, Dover, Delaware 19901 (located approximately 2 miles from the Main Gate of Dover Air Force Base)
CONTACT (302) 674-3922
At least 18 out of 24 VFWs in the state operated the machines, Water said. As a result of the state's letter VFWs were already shutting down and removing machines.
Page 2 of 3 - "Many of the VFWs operate paycheck to paycheck, month to month," Waters said. "With this source of income cut off, we probably will have 10 VFWs close. There are a couple of posts out there with mortgages and if they can't meet their mortgages they face foreclosure. Their source of income was partially through these machines.
"When they go away, what goes away is all the community service they perform," he said. "Last year, donations ran $600,115 for scholarships and donations of
hall space at no charge for military, Boy Scout and civic groups."
Furthermore, VFW and American Legion officials were still angry over the Oct. 22 letter from the Delaware Department of Homeland Security that did not get into their hands until Nov. 9 or Nov. 10, just a day or two before Veterans Day.
"It was kind of tacky," Waters said "It was a slap in the face."
Crouser wondered why the letter dated Oct. 22 was not postmarked until three days after the Nov. 6 general election.
"It was sent out by certified mail with a signature required," he said.
Delaware Dept. of Safety and Homeland Security spokeswoman Kimberly H. Chandler referred questions about the letter's timing to the office of the governor, which refuted Crouser's suggestion that the election played a factor in the letter's delivery time.
Meanwhile, Secretary of Safety and Homeland Security Lewis D. Schiliro said the letter sent to several organizations was essentially an outgrowth of several citizen complaints the state had received regarding the proliferation of slot machines in various venues throughout the state.
"In response to those complaints and subsequent on-site visits by law enforcement, the Attorney General's Office was consulted and advised that under the current law most of the machines were clearly illegal under Delaware law," Schiliro said in a prepared statement. "Rather than take immediate enforcement action, we decided to send a letter to known venues advising recipients of the potential issue regarding the use of these gambling devices.
"While we fully recognize that some of the locations have very important charitable purposes, the nature, payout and regulation of these gambling devices creates an enforcement issue," he added. "Moreover, this matter may also involve out of state venues bringing gambling devices into Delaware with very little regulatory oversight which helps to protect the users."
But Delaware veterans like Marc Garduno, of Dover, found themselves asking why the state would take action now.
"I've lived in Delaware for five years and all of these machines have been in operation the whole time I've frequented local VFWs and American Legions," Garduno said. "According to comments made [Monday] night at a statewide VFW meeting, this practice has been allowed in this state since 1974 -- almost 40 years.
Page 3 of 3 - "It would seem that all this time, state officials have opted to look the other way while local communities benefited from VFW contributions," he said. "So why now?"
Crouser said the American Legion in Dover had used the gambling machines for 22 years.
"Dover has some of the most intelligent law enforcement officers I've ever met," he said. "Delaware State Police are the most well trained, educated law enforcement, as far as I'm concerned, in the United States. So, why did it come to their attention after 22 years? Somebody somewhere had to make something out of it and I don't know [whom].
"But the American Legion is not an outlaw organization. We shut them down until this could go through the proper channels."
Schiliro agreed that this was "an appropriate topic for legislative debate."
Waters said legislation was needed to permit VFW, American Legions and other fraternal organizations to be able to have these machines to pay the bills and support their community service.
"Our electric bill is $1,500 a month," he said. "That's just to leave the lights on and to keep the refrigerator running. Some are higher. It is going to hurt employees. Upwards of 50 people could be out of work. There's 12 that are already gone.
"What happens now? They apply for unemployment, right? And the post or whoever let them go has to pay unemployment payroll tax. They can't pay it. The more people you lay off the higher it goes."
In all, Waters believed the sections of state law quoted in the Oct. 12 letter were contradictory to the Delaware Constitution.
Crouser said all veterans and fraternal organizations were invited to a meeting scheduled for 6:30 p.m. Nov. 26 at Fox Post No. 2. He asked each organization to only send one representative given the limited seating available.
"This is going to take a united front."