Testimony to Joint Subcommittee to Study Charitable Gaming Arrow International, Inc. September 20, 2021 Part 3 of 3 parts In your invitation you asked for our views on the status of charitable gambling laws in Virginia. In our view, and based on years of experience from other jurisdictions, there are two things that we hope you will consider for effective charitable gaming regulation. 1. Strict Eligibility Criteria. The primary goal with any charitable gaming regulation is to ensure that the money raised from the gaming activity is exclusively devoted to charitable purposes. We support legislation or policies that enhance the existing regulatory framework by strengthening the eligibility criteria for manufacturers and suppliers of charitable gaming supplies, particularly those who produce and supply electronic pull tab systems. Applicants should be required to submit to comprehensive background investigations and demonstrate not only a lack of past criminal convictions, but also a history of law abidance in Virginia and in every other jurisdiction in which they, or their officers, directors or owners, do business. If funding is not currently available for an extensive background investigation, the subcommittee might consider legislation that assesses the costs of the investigation on the manufacturer and supplier. These types of fees are common in several other states. 2. Fair and Effective Enforcement. Based on our experience, the law should ensure that the State has the resources and authority to effectively monitor gaming operators, distributors and manufacturers for law and rule compliance, as well as the resources and authority needed to take appropriate action for violations of legal gaming laws and illegal gambling. This includes the ability to investigate and if necessary, initiate action to suspend, revoke, limit or condition any license or impose civil or criminal penalties against any licensee, or any person or business engaged in illegal gaming operations. While VDACS has the ability to take licensing action, the subcommittee might consider the creation of a separate division within the Virginia State Police devoted to the investigation of criminal gambling activity as well as the prosecution of illegal gambling operations. Again, thank you for the opportunity to testify today. We look forward to working with the Subcommittee as it develops and considers legislation for charitable gaming. Please feel free to contact me if you have any questions or if we can provide additional information.

Testimony to Joint Subcommittee to Study Charitable Gaming Arrow International, Inc. Part 2 of 3 parts In the last several years, a number of states have embraced the technology provided by electronic pull tabs. Currently, electronic pull tabs are legal in 8 states for charitable gaming, and legislation is pending in 2 others. Electronic pull tabs have become an important tool for charitable fundraising, allowing non-profit organizations to utilize 21st century technology during a time when revenues from the more traditional forms of charitable gambling are declining. Charities relegated to paper-based games cannot begin to compete with the glitz and glamour of casinos, sports betting, internet gaming or the myriad of other gaming forms that have emerged into the marketplace in recent years. For many organizations, electronic pull-tabs are what keeps the doors open and provides the resources needed to fund a multitude of charitable programs and missions. Electronic pull tabs are a natural extension of the popular paper game. They are, in fact, the paper game played in a modern, electronic format. An electronic pull tab ticket is a digital representation of a paper pull tab ticket. Arrow, as a paper pull tab manufacturer, has games that exist in both the paper and digital format. Each electronic pull tab game, like the paper counterpart, is distinct and carries a unique serial number. Each game contains a finite number of tickets. The winners are predetermined by the manufacturer, not randomly generated on the device. There is a fixed and definite payout that is known to the player and reflected on the flare. These characteristics distinguish electronic pull tab devices from slot machines. Arrow currently holds licenses and has electronic pull tab systems in New Hampshire, Maryland, North Dakota, and to a much lesser extent, Virginia. As a company, we were late to the electronic pull tab space, largely for two reasons. First, Arrow operates only in regulated markets where electronic gaming is expressly permitted and where participants are licensed. Arrow has no history in the sweepstakes busines nor do we manufacturer or distribute skill machines. Second, our development of electronic pull tab systems has been entirely in-house: we design and assemble every electronic pull tab device to ensure each meets the exacting standards required by the various state regulatory agencies.

Testimony to Joint Subcommittee to Study Charitable Gaming September 20, 2021 Submitted by Mary B. Magnuson Vice President of Government Affairs Arrow International, Inc. Part 1 of 3 parts Delegate Krizek and members of the Subcommittee. Thank you for the invitation to provide testimony to the Joint Subcommittee. I apologize for not being available to meet with you in person, but please be assured that we take the work of the Subcommittee very seriously and sincerely appreciate the opportunity to provide input on these important issues. I have been involved with charitable gaming for over 30 years, and in fact, testified before the Virginia General Assembly about 25 years ago in support of a bill to create a state regulatory structure for charitable gaming. I began my involvement with gaming as the Managing Attorney for the Gaming Division in the Minnesota Attorney General’s Office. Once I moved to private practice, I served as the Executive Director and General Counsel for the National Association of Fundraising Ticket Manufacturers (NAFTM), a trade association for manufacturers of charitable gaming supplies. While working with NAFTM, I was directly involved in the development of charitable gaming legislation, rules and policies in over 25 states, including all of the states that currently permit electronic pull tabs for charitable fundraising. Over the years, I have worked closely with the North American Gaming Regulators Association (NAGRA) in the development of model standards for bingo and pull tabs, and I assisted the National Council of Legislators from Gaming States in the development of model charity gaming legislation. Arrow International, Inc. (Arrow) is the world’s largest manufacturer of charitable gaming solutions. Arrow has been in business for nearly 55 years under the steady ownership and management of the Gallagher family. Arrow manufactures everything a charitable organization needs to conduct charitable games, including electronic pull tab systems, bingo paper, daubers, instant bingo tickets, bingo consoles and flashboards, and electronic bingo aids. Arrow has manufacturing facilities in the United States, Canada and the United Kingdom, and employs over 1100 team members worldwide. We currently hold over 120 gaming licenses and sell our products in over 80 countries around the world. Our world headquarters and largest manufacturing facility is located in Cleveland, Ohio.

My name is Brooke Archambeau, and I am a member of Portsmouth Moose Lodge/Family Center 898 in Chesapeake, VA. I am also currently serving as the Government Relations Chairman for the Virginia Moose Association. As your subcommittee studies charitable gaming as a result of SB 1127, I urge you to consider all of the activities in our lodge and community that proceeds from charitable gaming allows us to support across the Commonwealth. Our organization, established over 100 years ago, provides for the health, welfare, and education of over 200 children at our child city of Mooseheart, Illinois. The children there, ages 0-18, are provided with family-style housing, educational development at our world-class Mooseheart School, and a passion for community service. All students at Mooseheart, upon maintaining their grade point averages and completing service hours, are given the opportunity to pursue higher education through our Scholarship and Maintenance Funds. Our organization also provides shelter, healthcare, and active living for our senior members at Moosehaven, which boasts its own Lifecare Center and physician-staffed clinic and pharmacy. Support of our twin cities is the cornerstone of our organization, but we also support many other at large charities that benefit our community and many others across the Commonwealth. The Safe Surfin Foundation, in partnership with the Bedford Sheriff's Office, has educated thousands of children and teens about the dangers of the Internet. The Moose has partnered with Special Olympics for the past twenty years, ensuring that travel, lodging, and other fees are covered for these most deserving athletes. The Massey Cancer Center at VCU is one of our fraternity's largest benefactors in the state and will be working with us to create a new family waiting center for patients receiving chemotherapy and radiation. We host Wounded Warriors for softball tournaments and just this past weekend held the annual chili cookoff in Lynchburg to raise funds for K9s for Warriors. At the local level, our lodge participates in several walks and sponsors teams for the American Cancer Society's Relay for Life, Chesapeake Regional Medical Center's Bra-Ha-Ha events, Strides Against Breast Cancer, and the Walk to End Alzheimers. Additionally, we make monthly contributions to local domestic violence shelters, KidsFirst, and several other nonprofit organizations in our community. The impact our organization has on thousands of people across the Commonwealth would not be possible without the proceeds from charitable gaming. Any regulations on social quarters gaming outside of current legislation would severely hinder our ability to continue funding these worthwhile projects. I urge you and the subcommittee to oppose any further regulation of gaming in the private social quarters of our lodges and freeze the threshold for use of proceeds of permitted sessions involving the public. Most of the proceeds from this gaming benefits our communities at large as outlined above as well as our fraternal foundation of Mooseheart and Moosehaven. Mandating use of proceeds from private social quarters gaming would significantly diminish our ability to continue supporting these worthwhile endeavors. Thank you for your time and consideration of this matter. Respectfully yours, K. Brooke Archambeau Government Relations Chairman Virginia Moose Association