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VFW sweepstakes: Grey area as big as Texas

Sweepstakes terminals blur line between gambling and charity

SAN ANTONIO – They're controversial, and they're keeping many Veterans of Foreign Wars posts across the state afloat.

The blinking lights and beeps of the "Support A Veteran Sweepstakes" terminals can be found at about one-third of the state's 326 VFW posts. On computers connected to a central server, members and customers can play what appears to be casino-style games and win cash payouts.

Critics say the payouts and games, some of which appear similar to 8-liner games, are gambling. The VFW and the sweepstakes operator, VSweeps, disagree.

"Well, they think it's just a legalized 8-liner, and it's not," said Greg Muirhead, a technician and sales manager for VSweeps.

The "Support A Veterans Sweepstakes" is just what its name says, they argue, a sweepstakes.

The difference between the two is crucial. Playing a sweepstakes and winning money through it is legal under Texas law. While 8-liner machines are both legal and prevalent throughout Texas, playing them to win cash or anything worth more than $5 is not.

Anyone playing the VFW's sweepstakes has a few more steps to go through than if they were feeding cash directly into an 8-liner.

Players first have to get a card at a participating post to access their accounts. They also have to read through rules and click "Agree" before they can play.

Theoretically, it's possible for someone to play all day without donating a cent. Players get a chunk of free entries every day. There's even a way to play one free entry at a time, by swiping their card at their terminal every play.

Donating money to the VFW will net a player extra entries, too -- 100 per dollar -- but it's not required.

Unlike an 8-liner with its randomly generated outcomes, VSweeps says its sweepstakes have predetermined outcomes and prizes associated with each entry. The games on screen are just graphics, the company says, and players have the option of asking the bartender at the post to swipe their card and tell them if they've won anything.

Players can choose from several different styles of games to "reveal" their entries, from 8-liners to video poker to popping balloons on a screen. VSweeps says the payouts don't change, even if the game does. Some terminals will even show the player what they're going to win before they ever hit "reveal."

"Technically, a lot of people prefer the casino game theme, because it gives them that illusion of gambling when it's not really," said Muirhead.

The same sweepstakes has prompted legal action in other parts of Texas and raised law enforcement eyebrows in San Antonio.

"But it's when I run out of my free plays and say, 'Well, I'm going to keep playing. I'm going to make a donation to a charity or whatever then I win money.' That's when in our opinion you've stepped over the line of gambling," said Lt. Jimmy Sides, of the San Antonio Police Vice Unit.

State VFW officers say San Antonio police told their posts in the city to shut down their sweepstakes operations earlier this year. So the VFW turned to Bexar County District Attorney Nico LaHood.

LaHood told the KSAT Defenders that until the appellate courts make a ruling on a case with similar facts, his office will let the sweepstakes ride.

"Right now, we're not talking about a very clear area of the law, and so waiting for the appellate decision, I think, is more prudent than not prudent," LaHood said.

When the Defenders called the police back, a spokesman said the department would follow the DA's lead.

Law enforcement hasn't always agreed with the legality of the sweepstakes. The TABC filed administrative charges against an Austin American Legion post that was using the same sweepstakes operation in 2010. The Travis County Attorney filed criminal charges, too. Both later dropped the charges, but a suit by the American Legion is still making its way through the courts.

Dan West, the state commander of the Department of Texas VFW, says their sweepstakes haven't been welcome everywhere either.

"There are some counties where the district attorneys and the judges there have said, 'This is a great program. It's going to help veterans here,'" West said. "There are some others where they just absolutely said, 'No way. It's not going to happen. Not on my watch.'"

West said the VFW and VSweeps will try to persuade those jurisdictions of the sweepstakes' legitimacy but won't fight them on it if they disagree.

But if there's any concern from law enforcement, why risk having the sweepstakes at all? It comes down to a matter of survival.

A mainstay in many communities, the VFW provides youth scholarships and community service across Texas. Its Veterans Assistance Program gives vets up to $2,500 to help out with unforeseen situations.

"It's extremely important to have that safety net," West said.

The posts themselves are a form of service, he said, providing a safe haven for vets where they can "take off all of their mental body armor and be around people they know will have their back," he said.

These programs and services take money, though, and that has been in short supply.

In the past, the VFW's funds came largely from membership dues, but as World War II vets pass on, there's a smaller pool of vets taking their place. West said in the past two decades, Texas membership has fallen from 120,000 to 75,000, and the number of posts has dropped from about 900 to 326.

"And at $35 a member, you can do the math on that," West said. "That's a significant amount of dues income that we've lost."

To add to the VFW's challenges, they're competing for the same pool of fundraising cash with other nonprofits looking to help veterans.

So a few years ago, with the help of the Department of Texas VFW, some local posts started putting in the "Support A Veteran Sweepstakes," which has taken some of the sting off of declining revenue in other areas.

After prizes are paid out, the "donations" players make are divided up between VSweeps and the VFW. The Department of Texas VFW and the local posts are guaranteed at least 50 percent of that net value, which the VFW's attorney says is as good or better than the average amount from the most common types of charitable fundraising.

"It has helped a lot of them continue with their scholarships," West said of the sweepstakes. "It has helped them to continue to do outreach to veterans in the community. It's continued to help them provide those services, burial details, honor details, all those things that our own government has not been able to provide simply because they've been sending everybody to fight a war overseas."

West said he did not have a hard number on how many Texas posts were using the "Support A Veteran Sweepstakes" but estimated it at about a third of the posts statewide, nor did he think any of them were on the verge of closing.

That means the VFW and its mission of helping veterans lives on.

"And I want to make sure that there's a Veterans of Foreign Wars 100 years from now to help those people who have served our country that I will never meet, and they will never know I existed," he said.

Below, West explains the need for sweepstakes and fundraising for the VFW.


About the Author
Garrett Brnger headshot

Garrett Brnger is a reporter with KSAT 12.

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