Casinos Ban Welfare Card Use

Special Report - June 29, 2010
California welfare recipients will no longer be able to procure taxpayer-provided cash for gambling from automatic teller machines (ATMs) inside casinos, as a result of Governor Arnold Schwarzenegger’s recent executive order. The order was issued on June 24 in response to last week’s Los Angeles Times report that more than half of the ATMs in California gambling establishments accepted the state-issued welfare cards for California’s CalWORKS program. California is by no means unique in disbursing welfare benefits through electronic benefit transfer cards (EBTs); the 1996 Welfare Reform Act required states to begin disbursing services through these debit card-like devices by October 2002.

In fact, Times reporter Jack Dolan writes, the California Department of Social Services (DSS) confirmed that $1.8 million in CalWORKS cash benefits had been withdrawn from casino ATMs between October 2009 and May 2010. Many casinos have one or more ATMs near gaming tables to ensure the gamblers have easy access to cash while wagering.

In response to these reports, Governor Schwarzenegger issued an executive order declaring that DSS should immediately ensure that cash benefits are no longer accessible through casino ATMs. He also required that DSS cause all benefit recipients to acknowledge that their welfare funds were only for basic needs, and that DSS produce, within a week, a plan to reduce waste and fraud “in the disbursement of CalWORKS benefits.”

“I will use every available power I have to protect taxpayers from waste, fraud and abuse in government,” Governor Schwarzenegger said in a press release. “I urge the legislature to pass more aggressive laws preventing benefit recipients from withdrawing cash assistance at casino and other gambling location ATMs that I will sign as soon as it hits my desk.”

Bill Brooks, president of the North Carolina Family Policy Council, commented on the story, noting, “The image of welfare recipients standing at ATM machines inside casinos withdrawing taxpayer-funded money intended for food and other basic necessities highlights the predatory nature of gambling. It also points to the ease with which individuals, particularly those in desperate financial situations, can become addicted to wagering their last dollar, for the chance at hitting it big. The governor of California is right to end this practice.”

Brooks added, “Gambling in any form, including the gambling that is taking place in video sweepstakes cafes across North Carolina, is a predatory practice that seeks, tempts and destroys the most vulnerable of our citizens. And those who have the least end up paying the highest price through loss of income, addiction and the negative social outcomes associated with compulsive gambling. The North Carolina House should act swiftly to join the Senate in banning video sweepstakes gambling in our state.”

Copyright © 2010. North Carolina Family Policy Council. All rights reserved.