Plan would seek gaming winnings for child support

Tuesday, Jan. 14, 2003 | 11:12 a.m.

SUN STAFF AND WIRE REPORTS

WASHINGTON -- The government wants to go after the gambling winnings of parents who owe child support.

Health and Human Services Secretary Tommy Thompson said Monday that President Bush's budget will include a proposal to increase collections by aggressively pursuing winnings.

The effort is expected to collect $700 million for families over five years and $2 billion over 10 years. The cost is estimated at $40 million for five years and $90 million for a decade.

Thompson said his agency is currently able to garnish wages and wring money out of lottery winnings by deadbeat parents, but needs a change in law to allow it to pursue winnings at casinos, horse tracks, keno and other venues so that money could be withheld and distributed to the family.

Thompson said that could have two beneficial effects: Money from the winnings would go where it belongs -- to the children -- and it might discourage some parents from gambling.

The casino industry is expected to oppose the plan.

The American Gaming Association, the casino industry's chief lobbying organization, opposed a similar plan proposed by the Clinton administration in 2000. An earlier proposal, in 1994, predates the AGA.

The plan, while it has a commendable goal, will create more problems than it aims to solve, said Frank Fahrenkopf, president and chief executive of the American Gaming Association, the casino industry's chief lobbying organization.

"Mandating the gaming industry to garnish winnings from those listed in a government database raises serious privacy questions," he said.

It also creates a host of liability issues for both casinos and the federal government, he said.

"Thousands of gaming industry employees would need to have immediate access to accurate information seven days a week, 24 hours a day from all 50 states in order to fulfill our legal requirements to pay winnings when they are due."

The plan sets "dangerous precedents" by targeting a single industry to perform functions normally pursued by the state, he added.

"Should banks be forced to check the child support database before they allow customers to withdraw money from their bank accounts? Should investment firms be required to scour their list of customers prior to paying dividends or posting portfolio gains? Should automobile dealerships check the list before allowing a customer to drive off the showroom floor?"

Nevada lawmakers have opposed the plan in the past because the gaming industry opposes it. If the proposal emerges in President Bush's budget, they almost assuredly would move to block it again.

Nevada's three House members were planning to send Bush a letter today, outlining their opposition, said Michael O'Donovan, spokesman for Rep. Shelley Berkley, D-Nev., who is in Taiwan this week.

The proposal unfairly saddles casinos with responsibilities for checking the backgrounds of its winners, Nevada lawmakers argue.

"I want to bust these deadbeat parents," Rep. Jon Porter, R-Nev., said in a statement released by his office. "But private industry can't be the arm of law enforcement. I would support initiatives that would give law enforcement the tools they need to track down these deadbeat parents." Sen. Harry Reid, D -Nev., has not seen any details about the plan, spokeswoman Tessa Hafen said.

"But if it's similar to what has been discussed before then Sen. Reid would be opposed to it," Hafen said.

So would Rep. Jim Gibbons, R-Nev., who is traveling in Africa this week, spokeswoman Amy Spanbauer said.

"The congressman's opinion on the matter has not changed," Spanbauer said today.

If the plan is approved in Congress, HHS would set up a secure Internet site to be used in matching the names of gambling winners with child-support debtors.

It may be possible to use the system to withhold money at the time people collect their winnings, just as taxes are withheld, Thompson said. However, he said, if that doesn't work out, the department may have to wait until the parents fill out their income tax forms seeking refunds.

In 2000 some $25 billion in gambling winnings was reported on 6 million tax forms, Thompson said.

According to data collected by the Census Bureau there were 13.5 million single parents with legal custody of children, about 85 percent of them mothers, in the year 2000.

About 60 percent of the custodial mothers and 39 percent of fathers had been awarded child support. The Census Bureau said those mothers collected about 60 percent of the support due them while the fathers received almost 48 percent.

Child support enforcement was overhauled in 1996 as part of welfare reform. Since then there have been other new outreach initiatives -- such as job search assistance for fathers who cannot afford to pay child support -- that have improved the situation.