In California, Welfare ATM Cards Used In Casinos

Like many states, California now uses debit cards to distribute welfare payments to individuals. It's an efficient way to distribute funds. But an investigation by the Los Angeles Times found that ATMs at more than half the state's casinos and card clubs accept the welfare cards. Robert Siegel talks to L.A. Times reporter Jack Dolan.

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ROBERT SIEGEL, host:

In California, as in many other states, welfare recipients are given state-issued debit cards through which they access their benefits. Well, the Los Angeles Times reports today on what they might be doing with those benefits using the debit cards.

Reporter Jack Dolan writes that the debit cards work in ATMs at many casinos and state-licensed poker rooms in California. And Jack Dolan joins us now from Sacramento. How common is it to be able to use the California Department of Social Services debit card to get cash at a gambling institution?

Mr. JACK DOLAN (Reporter, L.A. Times): Well, our review of state records showed that it was slightly more than half of the casinos and these smaller poker rooms in the state had ATMs that accept the welfare benefits cards.

SIEGEL: And upon your reporting of this, what did the state government say?

Mr. DOLAN: The explanation is that, you know, they have a very wide network of ATMs that recipients can use and that their efforts have been to widen it and to make this as accessible and convenient as possible, and that they simply hadn't noticed that money was being withdrawn on gaming room floors.

SIEGEL: Are there now efforts to change that?

Mr. DOLAN: Yesterday, the Schwarzenegger administration said that they would instruct their vendors immediately to strike the ATMs in casinos from the list of ATMs that welfare recipients can use.

SIEGEL: And that's something that technically can be done fairly easily you think?

Mr. DOLAN: Apparently it is pretty easy. There's a company in Las Vegas that actually has a niche that they provide ATMs to casinos and to gambling institutions. And they, since the early 2000s, have taken it upon themselves to program their machines to reject these - they're called electronic benefits transfer cards - and the general counsel for that company told me the other day that it's actually really easy.

SIEGEL: This is a delivery of a cash benefit through a debit card. It's not like food stamps, which you can only use for food. It's not like Medicaid, which is only for health care. What's wrong with saying the cash is yours, that's what the state does for people in need, and then what you do with it is up to you?

Mr. DOLAN: Well, you know, it's funny because I was asking that very question to people around the state and I couldn't get a single elected official to go on the record making that argument, which is probably telling of the political climate. But the actual program that this cash is dispersed under is called Temporary Assistance to Needy Families. And while it doesn't prescribe specific things you can and can't spend it on, it lists the goals of the program. And the goals of the program are to allow people who are needy to keep a roof over their children's heads while they're training for new jobs and looking for new jobs.

The fact that these ATMs - and one of them that I found was literally - you could be sitting at a poker table, you could lean back in your chair and withdraw your taxpayer benefits from the ATM and keep playing. You wouldn't even have to get up from the table. So the notion that the benefits are that accessible on gambling room floors has turned a lot of people off.

SIEGEL: How big of a monthly benefit are we talking about here typically?

Mr. DOLAN: The maximum benefit in California for a family of three is about $700. If you have a huge family, it goes up from there. But that's typical, 700 bucks.

SIEGEL: And are the benefits delivered at the beginning of the month typically?

Mr. DOLAN: Apparently it's the end of the month. And I got an e-mail from a reader this morning saying that she doesn't go to her favorite casino on the last day of the month because that's when the cash lands in all these welfare beneficiary accounts and the place is too crowded on the last day of the month, so they stay away.

SIEGEL: That's an anecdotal account. Do we have any - any sense of really how many such benefits are drawn out on from these ATMs?

Mr. DOLAN: I put in a public records request in January with the Department of Social Services asking for the data that would show how much has come out at every ATM in their network, and they rejected it saying federal law protects the privacy, but not of the welfare beneficiaries, but of the merchants who accept these cards, which in this case include casinos. We have been pressing the governor's office for a number. They have promised to get it to us on several occasions and failed. They have promised to get it to us again today, but we decided yesterday to just go with this story because there was no way of telling when they would get it.

SIEGEL: Jack Dolan, thank you very much for talking with us.

Mr. DOLAN: Thanks for having me.

SIEGEL: Jack Dolan, a staff writer for the Los Angeles Times spoke to us from Sacramento.

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