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LAWFUL GANIBLING
<br />State law and rules also contain a number of regulatory controls over the ac&-
<br />itie,s of organizations conducting gambling. These, controls have been much
<br />0 Mi
<br />unproved by recent statutory and adrmnistrative rule changes. Unfortunately,
<br />we found, that":
<br />Gambli*ng organizations, COMPIR , ance with state rules is poor.
<br />vi
<br />We found numerous *Instances where organizations were, "ollating state rules
<br />on deposits, separate bank accounts for, each gambling site, expenses, lawful
<br />I
<br />purpose expenditures, reporting to the membersh'p, and proper, approval of
<br />ill its re-
<br />expenditures. Local government officials performing compliance audi
<br />port similar findings, as do auditors, from the Department of Revenue.
<br />We also found, that the state licensing process provided, little asisu,rance that
<br />gambling organizations complied with required rules. The Divisi i on of'Gam-
<br />*I
<br />bling Control, has not evaluated the internal controls of organizations or
<br />Gi
<br />reviewed, their tax forms before, lilicensure. Many of the internal control docu-
<br />'i M
<br />me,n,ts filled, With the board revealed serii,ous internal control shor,tcoimi I ngs-
<br />10,
<br />Local enforcement of' gambling laws is not, extensive.
<br />We also found that the state has conducted very few orga,nizatioinal aud'te
<br />it
<br />Only 76, audi I ts have been conducted since the state took ovcr, responsibility
<br />for gamblihg regulation. We also noted that none of the 30 organizations wit
<br />the la,r ing revenues have bleen audited.
<br />glest gambl' I
<br />In the course of our review,, we found that there are many problems evident
<br />on organizations" tax returns,. For example, during reviews of tax returns we
<br />......................... ... ...
<br />found, organizations, that were violating rent rules, were missing funds from
<br />Both state
<br />their bank accounts, were accounting for inventory incorrectly, were improp-
<br />I *I
<br />Icensing and
<br />e,rly deducting taxies, and were violating expense and lawful purpose rules.
<br />Currentlocal
<br />'These problems were all apparent from, reviewing the tax returns, and should
<br />V
<br />have, bleen corrected before licensing. We conclude that.
<br />government
<br />enforlcement
<br />0
<br />State Ikensling has been largely ineffective, as a means of ensurl'ing
<br />efforts are
<br />proper organl*zatilon clonducL
<br />0
<br />insufficleent to
<br />ensure
<br />41
<br />We contacted over 70 cities With local gambling ordinances and found that
<br />Compliance
<br />only a few had regulatory programs designed, to ensure compliance with, gam-
<br />ith state law.
<br />wi
<br />bling rules. We also, found that most local, gl overnments were not well
<br />0
<br />informed about', the gambling laws and had little contact with the Gambling
<br />Control Board. We conclude that:
<br />10,
<br />Local enforcement of' gambling laws is not, extensive.
<br />We also found that the state has conducted very few orga,nizatioinal aud'te
<br />it
<br />Only 76, audi I ts have been conducted since the state took ovcr, responsibility
<br />for gamblihg regulation. We also noted that none of the 30 organizations wit
<br />the la,r ing revenues have bleen audited.
<br />glest gambl' I
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