Legislators who spanked some social clubs for breaking a law requiring them to donate all of their gambling proceeds are now supporting a measure to give the clubs more money.

The bill, which would allow the clubs to keep the first $40,000 they make from small games of chance, is unavoidable and will keep the clubs from going out of business, legislators said.

Some posts and clubs such as the American Legion and Veterans of Foreign Wars have said they're being driven out of business, bemoaning new reporting standards required under legislation passed last year.

Last year's changes actually raised gambling limits and allowed clubs to keep 30 percent of their proceeds. That's 30 percent more than they could keep under the old law, which said 100 percent of proceeds had to be donated to charities.

But legislators alleged - and some club managers admitted - the clubs hadn't been following the 100-percent rule before the new law required stricter accounting of money.

Now that they have to follow the rules, they're running out of money, said state Rep. Seth Grove, R-Dover Township.

Little choice: While Grove and state Rep. Ron Miller, R-Jacobus, were among legislators scolding the clubs for not following the rules, they're both co-sponsors of HB 290, the measure to give them more money.

State Rep. Will Tallman, R-York and Adams counties, is also a co-sponsor. State Rep.


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Mike Regan, R-Dillsburg, was among the positive votes to send the bill out of the House's Gaming Oversight Committee on Tuesday.

Grove said lawmakers have little choice but to give the clubs a break.

"It's unavoidable," he said. "Obviously we can't let economic drivers go out of business. While unfortunately some clubs were cheating, they are an economic driver."

Miller said letting the clubs close would hurt their employees and the small businesses, such as beer distributors and food vendors, who count them as customers. And, he said, the clubs are giving thousands of dollars in gambling proceeds to local charities every month.

"I have no problem standing by my principles," Miller said. "But it's not going to do us any good to help the charities that are getting the money ... if they go out of business."

Turning a cheek: Grove said the bill has momentum and could go to the full House for a vote as soon as this week.

"I think you're going to see very quick movement on that bill," he said. "It's going to be the last hoorah. One last fix and hopefully (the clubs) are engaged."

Grove has proposed an amendment that would also remove the cap for gambling payouts, which would help the clubs raise more money. The amendment also requires 20 percent of the clubs' donated gaming earnings to be allocated directly to the state's education budget.

The bill's passage would help save at least one troubled club, said George Smith, home association secretary and treasurer at American Legion Post 605 in Dallastown.

Over the past several months, employees there have taken a pay cut and the club raised the price of food, Smith said.

"Right now, we're robbing Peter to pay Paul to stay afloat, and other organizations are doing the same thing," he said. "He said the club hadn't been "giving what the law indicated" before the law changed, but the post had to dip into gambling funds to stay afloat.

"(The $40,000) certainly would help quite a bit," he said. "Starting off with a balance to carry you through the times when things get tight ... would be of great value."

The club supports numerous Pennsylvania businesses for all of its operational needs, he said, and it donates thousands of dollars each month to causes such as Dallastown Area School District's sports programs.

- Reach Christina Kauffman at ckauffman@yorkdispatch.com.