Friday, May 16, 2008
Comptroller’s auditors still reviewing bingo parlor docs
Investigation may take months
by Alan Brody | Staff Writer
Reid Silverman⁄The Gazette Maryland State Trooper First Class Bob Rezza scours the electronic gaming devices at the Brass Rail. Gov. Martin O’Malley on Tuesday signed into law a bill that will phase out electronic bingo machine statewide by next July.
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ANNAPOLIS — State tax auditors continue to sift through thousands of documents obtained from electronic bingo machine operators in St. Mary’s County to determine whether any businesses failed to pay proper taxes.
As the investigation plods ahead, Gov. Martin O’Malley (D) on Tuesday signed into law a bill that will phase out 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 are being eyed for wrongdoing.
The exhaustive review, which began in March, could take months to complete, Franchot’s spokesman Joseph Shapiro said. The comptroller’s compliance division has seven to 10 auditors, but it is not known how many of them are working on the case.
The timetable is fluid because the audit has posed extra questions that must be investigated, all of which could lead to legal action.
‘‘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 bingo bill signed Tuesday became a top priority for legislative leaders during the 2008 legislative session amid concerns that the proliferation of the electronic devices, which dispense tickets in a predetermined fashion, generated no revenue for the state. Proponents also believe the machines would jeopardize passage of the November slots referendum.
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.
Earlier this month, St. Mary’s County Circuit Court Judge Karen H. Abrams reversed an opinion from the Attorney General’s Office that ruled the machines illegal.
The judge’s decision permits businesses 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. Fred’s Liquors in Charlotte Hall brought the suit.
The newly signed law allows establishments that have had bingo machines for five years to continue operating them until Jan. 1 and gives those in use for more than 10 years until next July 1 to remove their machines. Advocates said they hope to revisit the legislation during next year’s General Assembly session.
