The move to move more government benefits to cards and away from checks has taken a hit after the Los Angeles Times reported that some beneficiaries are using their cards at casinos and strip clubs.
The stories detailed that more than $12,000 in cash from the Temporary Assistance for Needy Families program had been accessed from ATMs in strip clubs between 2007 and 2009. A previous report detailed that $4.8 million in welfare program money had been accessed from ATMs in casinos since 2007.
Cards have been steadily gaining popularity with state lawmakers and governments as they try to cut their program's administrative costs. California officials say they are working to block the use of the cards in casinos and strip clubs, but the casinos and clubs say the issue is more complicated than merely blocking the cards. Most of the ATMs in these locations are not owned by the casinos or strip clubs but instead by a third party deployer.