Clubs' lawsuit still alive

June 27, 1997


Staff Writer

A group of 23 private clubs with tip jar licenses survived efforts Thursday by the Washington County Gaming Commission to have their lawsuit on the "gross profits'' issue dismissed.

After hearing arguments from commission attorney Bill Schildt that all groups benefiting from tip jars must be represented in the legal action, Washington County Circuit Judge Fred Wright ruled that common sense must prevail.

He agreed with Wiley Rutledge, attorney for the clubs, that the law doesn't say that all who would benefit must be included in the action.


"They don't have to be in court to have their day in court,'' Wright said.

Wright said he was interested in preventing replicas of the same litigation by other groups.

"If decided here, that would govern and other lawsuits would then be thrown out,'' Wright said. "What purpose would there be to get others to join when the ultimate question will be the appropriate definition of gross profits?''

Wright's ruling Thursday clears the way for a hearing on that question, which was raised by the original lawsuit. No date has been set to hear that case.

The dispute is over the gaming commission's definition of gross profits from the sale of tip jars.

The clubs contend the gaming commission allows no deduction for the cost of the packets and the stickers on the tip jars.

In effect, the commission has "arbitrarily and without legal authority redefined the term gross profits to include money which in no sense represents a profit of any kind but simply represents the cost ... of doing business.''

The statute requires that clubs contribute 10 percent of the gross profits for charitable purposes for the year ending June 30, 1997, with the percentage increasing each year until it reaches 20 percent.

One half of that contribution must go to the Washington County Gaming Fund while the other half can be contributed directly by the clubs to charitable endeavors.

Among the organizations seeking the definition are several sportsmen's clubs, American Legion posts, civic, veterans and fraternal organizations.

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