Colorado Amendment F, Charitable Gaming Measure (2022)

On November 8, 2022, Colorado voters rejected Amendment F, a ballot measure that would have loosened restrictions on charitable gaming in the state. The proposed constitutional amendment was defeated by a margin of 59% opposed to 41% in favor, falling short of the 55% supermajority needed for passage.

Amendment F sought to reduce the time period an organization must exist before obtaining a charitable gaming license, allow managers and operators to be paid for running games, and give lawmakers more flexibility in setting charity gaming policies. Supporters viewed it as a way to modernize outdated rules and help nonprofits raise more funds. Opponents argued it could open the door to abuse and reduce revenues for existing charities.

The failure of Amendment F was the second time in recent years an attempt to expand charitable gaming failed at the ballot box in Colorado. The debates surrounding these measures exemplify broader discussions across the country about both the virtues and risks of legalized charitable gambling. This article will examine the background of Amendment F, provide an overview of charitable gaming in Colorado, discuss arguments on both sides of the issue, and look at what the future may hold for regulations of games operated to benefit nonprofits and charities.

Background on Amendment F

What Amendment F proposed

Amendment F specifically targeted two main restrictions on charitable gaming that are currently enshrined in the Colorado constitution:

• Five year existence requirement – The state constitution requires organizations to exist continuously for five years before becoming eligible to obtain a charitable gaming license. Amendment F proposed reducing this to three years until 2025, after which the legislature could set the length of required existence.
• Ban on paid managers/operators – The constitution prohibits anyone except unpaid members of a charity from managing or operating charitable games. Amendment F would have allowed managers and operators to be paid up to minimum wage until 2024, after which compensation limits would be removed.

By altering these constitutional provisions, supporters believed the amendment would allow charities to raise more money through gaming activities like bingo and raffles by making it easier to hold events and find willing workers.

Arguments for and against

Proponents of Amendment F focused on how it would modernize rules they saw as archaic and help small nonprofits. The primary group backing the measure was the Colorado Charitable Bingo Association. State legislators from both parties also endorsed the change.

Groups against Amendment F, like the Colorado Veterans of Foreign Wars, argued it could open up charitable gaming to potential abuse by fly-by-night operators seeking to profit off of nonprofits. The No on F campaign said the change could flood the market and reduce revenues for organizations already relying on charitable games.

Previous attempts at passing similar measures

The backers of Amendment F tried to enact similar reforms in the recent past without success. In 2020, Amendment C proposed reducing the five year waiting period to three years and allowing paid managers and operators. It failed with 52% voting against it, shy of the 55% needed.

After that defeat, proponents took a narrower approach with Amendment F, keeping the three year transition period and temporarily capping pay at minimum wage. But opposition remained strong enough to again stop the changes from being enacted.

Charitable Gaming in Colorado

History and legal overview

Charitable gaming has been permitted in Colorado since 1958, when voters approved a citizen initiative constitutional amendment allowing certain nonprofits to conduct bingo, raffles, and other games of chance. The amendment enacted strict regulations, including the five year waiting period and ban on compensation for workers.

Eligible organizations include nonprofits focused on charity, religion, labor, education, veterans affairs, and other civic purposes. Groups must obtain an annual license from the Secretary of State’s office to conduct charitable gaming. The constitution mandates all net proceeds go to the nonprofit’s mission.

Common charitable games in Colorado include bingo, pull tabs, scratch tickets, and raffles at events like fundraisers and bazaars. Slot machines and casino-style table games are prohibited. There were 890 active charitable gaming licenses in 2021.

Licensing and financials

Charitable gaming in Colorado generated over $104 million in wagers in 2021, providing $24 million in net profits for nonprofits. The COVID-19 pandemic depressed revenues in 2020, cutting profits in half compared to 2019 totals.

Critics of the current system argue strict limitations on compensation for workers make it difficult to fully utilize charitable gaming to raise funds. Others counter that loosening standards could flood the market and spread revenues too thin.

Recent legislative changes

While Amendment F failed to pass constitutional changes, Colorado lawmakers have shown a willingness to update charitable gaming regulations through legislation.

In 2022, a new law increased the maximum number of bingo cards per player from 54 to 100. It also authorized electronic “bingo strip card” machines. Supporters say modernizing technology rules allows charities to attract more interest.

Even if constitutional amendments face high hurdles, more incremental statutory changes regulating details of charitable gaming may still advance in the legislature. The debates focus on balancing nonprofit fundraising needs versus preventing exploitation.

Charitable Gaming Debate

Arguments for expanding charitable gaming

• Helps small nonprofits – Makes it easier for younger organizations to utilize gaming for fundraising. Can provide a revenue stream to get operations off the ground.
• Increases participation – Paid workers are more willing to volunteer time to run games. Allows charities to hold more frequent, larger scale events.
• Modernizes outdated laws – Constitution imposes arbitrary restrictions. Legislation can be crafted to allow appropriate oversight while meeting needs of modern charities.
• More funding for good causes – Ultimately helps more charitable services by allowing nonprofits to maximize revenue potential from games.

Concerns about expanding charitable gaming

• Increased competition – More organizations eligible for licenses spreads revenues thinner for existing charities relying on gaming.
• Risk of exploitation – Relaxing rules could enable predatory operators to take advantage of legal charitable gaming status without benefiting causes.
• Regulatory challenges – More groups and paid workers makes oversight harder for regulators tasked with ensuring integrity of charitable gaming.
• Social impacts – Critics argue expanding gambling increases associated social costs and risks even if intended for charitable purposes.

Reasonable arguments exist on both sides of this complex issue. Colorado voters have been hesitant to open the door to charitable gaming expansion, but pressure remains to revisit current restrictive policies.

Future Outlook

Potential for similar measures

The narrow failure of Amendment F after similar defeats suggests there may be limited appetite from voters to overhaul charitable gaming regulations in a substantial way. The proposal did gain more support in 2022 compared to 2020, but still fell short.

Proponents may continue attempting incremental changes. Efforts to further reduce eligibility restrictions or allow paid workers could eventually gain more traction after sustained public education and lobbying campaigns. But significant constitutional changes appear unlikely in the near term after the recent public votes.

Ongoing debates over regulations

Even if major reforms remain stalled, discussions around updating charitable gaming policies will certainly continue. Legislative proposals focused on more modest statutory tweaks to modernize technology rules or ease operational burdens may still advance.

Debates will involve balancing the benefits of maximizing charitable revenues through gaming versus preventing bad actors from exploiting legalization. The example of Amendment F shows there is hesitation around wholesale deregulation. But a measured approach recognizes realities of today’s charitable fundraising needs. With both principles in mind, thoughtful policymaking can potentially maintain integrity while still providing nonprofits flexibility through gaming activities.

Conclusion

While Amendment F failed to pass, the underlying issues remain relevant in Colorado and other states grappling with regulating charitable gambling. Updating rigid constitutional provisions can be difficult. But more nuanced legislative reforms may be possible when approached carefully with input from all stakeholders.

The debates surrounding Amendment F exemplify the types of considerations facing lawmakers as they navigate balancing responsible oversight with enabling nonprofits to fully utilize gaming as a fundraising tool. With charitable causes providing vital services to communities, getting the policy right is important so these organizations can thrive. Though reasonable people may differ on specifics, ensuring any changes put charities’ interests first is a goal all sides should share.

FAQs

Q: What percentage of votes did Amendment F receive?

A: Amendment F failed with 41% voting yes and 59% voting no, short of the 55% supermajority required.

Q: What were the main provisions of Amendment F?

A: The amendment would have reduced the waiting period for charitable gaming licenses from 5 to 3 years and allowed managers and operators to be paid temporarily.

Q: Who were the main supporters of Amendment F?

A: The Colorado Charitable Bingo Association backed the measure, along with legislators from both parties.

Q: What arguments did opponents make against Amendment F?

A: Opponents like the VFW argued it could lead to exploitation by predatory operators and reduce revenues for existing charities.

Q: Could related measures be proposed in the future?

A: The close margin suggests similar incremental changes may be proposed, but substantial constitutional reforms still face challenges.