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Kansas Moves to Keep State Aid Out of Casinos, Strip Clubs

Effort is to ensure welfare payments are reaching needy children was late, but still welcome.

By Travis Perry

KansasWatchdog.org — Could Kansas kids be going without necessities because one or both of their parents were using state benefits to gamble? That’s what a Kansas Watchdog investigation uncovered–public welfare dollars ending up at strip clubs, casinos and liquor stores. Now, Kansas has finally put some bite into its once-weak welfare restrictions, and it may help protect kids from parents abusing the system.

During the course of three months during 2012, Kansas Watchdog discovered that state-aid recipients withdrew more than $43,000 in Temporary Assistance for Needy Families benefits from ATMs at places like Golden Eagle Casino in Horton; Vegas Video Adult Superstore in Wichita; and G Spot, a Junction City strip club, among others.

But as of Feb. 1, all that came to a screeching halt, according to the Kansas Department for Children and Families, which administers TANF cash distribution in the state.

Theresa Freed, director of communications for DCF, said the state agency flipped the switch last month on a new program that will halt all unauthorized spending of welfare dollars — as much as the state can.

The solution comes in the form of Fraud Navigator, a payment-processing program offered by the state’s third-party vendor, FIS Government Solutions.

The vendor manages the actual transactions of Kansas’ Electronic Benefit Transfer cards, also known as Vision cards.

Freed said that Fraud Navigator not only will block inappropriate TANF electronic transactions at the cash register, but also will prevent recipients from withdrawing cash from ATMs at specific locations.

That last part is crucial, as it closes a loophole that was about a mile wide.

Before Fraud Navigator, a Kansas welfare recipient with a fully loaded EBT card could grab some fast cash from an onsite ATM to sidestep state regulations that forbid government assistance dollars from being used to purchase alcohol, tobacco or lottery tickets.

The move also aligns Kansas with federal welfare requirements. As part of the Middle Class Tax Relief and Job Creation Act of 2012, all states are required to implement measures to prevent TANF funds from being used at strip clubs, liquor stores and casinos.


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