Kentucky charitable gaming shutdown order rattles Louisville nonprofit

Charitable gaming organizations and native companies are out of luck, and much-needed funds, after the Kentucky Horse Racing and Gaming Corporation briefly pulled the plug on machines made by two main charitable gaming producers.

On Nov. 21, the state company ordered charitable gaming organizations throughout Kentucky to disable digital pull tab machines made by LNW Gaming, Inc. and Creative Game Technologies, LLC.

The machines had been a part of an unlawful “fishing scam,” the place an individual inserts forex — on this case a laminated paper invoice with a string hooked up — right into a machine earlier than pulling it out, tricking the machine into believing they paid with out having truly deposited the cash into the sport. The individual is then in a position to money out their credit, leading to “the theft of tens of thousands of dollars,” in accordance with a letter from KHRG.

In response to the rip-off, KHRG is cracking down on producers, services that home video games and charitable organizations as a way to stop additional scams.

“While those engaged in the fishing ultimately are responsible for the theft, organizations licensed by KHRG failed to appropriately prevent the criminal activity,” KHRG’s letter to organizations learn. “Facility Licensees have shown an inability to prevent criminal activity and the diversion of funds from legitimate charitable purposes in violation of KRS 238.500.”

In response, charitable gaming organizations — nonprofits that use proceeds from gaming machines to donate to native causes and packages — say the sudden order and subsequent rules is not going to solely kill charitable playing, but in addition damage the companies and individuals who depend on them.

Mike Mulrooney, founding father of Shirley’s Way, one in all Kentucky’s largest charitable playing organizations, stated the nonprofit raised round $5 million in 2024 and was on observe to boost $6 million in 2025. Mulrooney stated round 500, or almost 90% of the group’s video games, are impacted by the shutdown.

Now, the group is scrambling — with no cash coming in, the handfuls of packages they host and help are at risk.

“It’s basically stopped pretty much all the revenue we have coming in to continue doing things for the community,” Mulrooney stated. “We do a lot for people who are sick with cancer. We help feed kids. And I had to send an email to all those teachers to tell them we weren’t going to be able to send food this week to feed — we’re feeding about 3,500 kids right now over a week.”

Mulrooney additionally fears how the shutdown order may influence companies the place Shirley’s Way had machines. Shirley’s Way pays a set payment, or hire, to companies and eating places to accommodate machines, usually with a bartender, wait workers or different workers serving as a “chairperson” answerable for keeping track of the sport and dealing with payouts and receipts.

“Some of those businesses told us if we can’t pay the rent for the games, they’re going to have to close their doors because they’ve become dependent on the rent,” Mulrooney stated.

To reinstate the video games, producers should certify that any points with the machines have been mounted, and any services that home video games should have video surveillance of the machines. But the actual concern with ending the shutdown is the function of the “chairperson,” or supervisor of the charitable gaming machines at every location.

According to the letter from KHRG, the “chairperson” at every facility is barred from being paid by any individual, enterprise or group whereas serving as chairperson and will not be an on-duty worker of a enterprise the place charitable gaming is positioned.

“So if you can’t use a bartender or waitress, you have to find a volunteer to sit there all day long and be a chairperson,” Mulrooney stated. “And we all know that you can’t find enough volunteers to work eight hours a day at 40 locations to just sit there all day long.”

Mulrooney stated the invoice scanner on Shirley’s Way’s machines has already been mounted, and the fee “jumped the gun” by making a rules change so shortly.

“If they remove the bartender and waitress’s ability to be a chairperson, it’s going to destroy charitable gaming across the state, not just us,” Mulrooney stated.

Reach reporter Keely Doll at kdoll@courierjournal.com or observe her on X at @keely_doll.