“We are not hiding anything"; Shirley's Way founder defends charity after state alleges theft ring

Mike Mulrooney founded Shirley's Way in honor of his late mother, who died from cancer in 2013. Now he's taking to social media to defend the charity amid accusations of theft.

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If you've noticed your local electronic pulltab machines suddenly going dark, there's a reason for that- and some charities want you to know they're not the bad guys here.

Kentucky gambling regulators just ordered an immediate shutdown of these devices across the state after discovering thieves have been running an elaborate scheme that's already stolen tens of thousands of dollars. Now those same charities are finding themselves having to defend their reputations on social media.

"This shutdown was not, and I repeat, was not just Shirley's Way," said Mike Mulrooney, founder of the charity Shirley's Way, pushing back against what he describes as attacks online.

The Kentucky Horse Racing and Gaming Office of Charitable Gaming (KHRG) states that the theft problem has become so severe that they had no choice but to order all machines manufactured by LNW Gaming, Inc. and Creative Game Technologies, LLC at locations other than a charitable organization’s office location, the location where a charitable organization is licensed to conduct bingo, and a location where pre-approved charitable fundraising events, be disabled.

So what exactly were these thieves doing?

It's called "fishing," and it's as sketchy as it sounds.

Here's how it works: Thieves use plastic lines to insert money into a machine, then pull it back out before the machine fully registers the deposit. The machine thinks it received more money than it actually did. Then the thief cashes out a big payout without ever playing a single game.

According to KHRG, this whole process can take hours to pull off, but it's been effective enough to divert serious money away from the charities these machines are supposed to benefit.

Who's to blame?

KHRG says while the thieves are obviously the main culprits, plenty of other people dropped the ball here.

The oversight agency alleges facility operators failed to stop the criminal activity, and charitable organizations weren't properly supervising their gaming operations or making sure someone was actually watching over things. The agency also said the game system manufacturers didn't build adequate security into their machines to prevent this kind of theft in the first place.

The agency says all of this has damaged public confidence in charitable gaming, which is why they're taking such drastic action.

"We are not being shut down for illegal activity."

For charities like Shirley's Way, the statewide shutdown has meant having to fight off accusations that they did something wrong.

Mulrooney says his charity has a spotless record with regulators. "Shirley's Way follows all of the rules. We endure countless inspections and haven't had an issue…. We have passed every inspection, at every location, no issues, no investigations, no violations at all. Every penny is accounted for."

The charity founder took to social media to defend his organization and the money it raises.

"We are not being shut down for illegal activity," he emphasized. "We are not hiding anything, despite what people are saying."

He's also worried about the broader fallout from the order. "It saddens me to think about the economic impact this is having across the board. The people we support and our partners that allowed us to put games in their place of business and trusted us with that opportunity."

Mulrooney said accusations that his charity doesn't use the money for good are simply not true. He said since his mom died, Shirley's Way- which was founded in her memory- has given away $12 million. That money is spent in many different ways.

He said they give away about $250,000 a month to people who are sick with cancer, to help them pay bills and buy groceries. He said they feed about 3,500 kids weekly, which costs about $100,000 a month. He said they have donated money to build playgrounds, buy new technology for schools, pay for Little League sports equipment for families that couldn't afford to play otherwise, sponsored Baby Boxes at multiple fire departments, and the list goes on.

Beyond accusations coming from the public and social media, Mulrooney is also defending how Shirley's Way used the machines. He said they've been in use since 2019, and have been overseen by bartenders and waitstaff as "chairperson", which followed the rules laid out by the state.

What it takes to turn the machines back on

Getting these machines up and running again won't be quick or easy. KHRG has laid out a long list of requirements that manufacturers, charities, and facility operators all have to meet.

Charitable organizations need to guarantee an unpaid chairperson will be physically present anytime the machines are operating. Facilities have to restrict access to people 21 and older. And here's a big one: facilities must install complete surveillance systems that monitor every machine and every person using them, with recordings kept for at least 30 days.

The manufacturers also have to submit detailed reports explaining what went wrong and how they've fixed the security vulnerabilities in their machines.

Only after all of that is done can a facility request an audit from KHRG. And only after passing that audit and getting written approval from the Director of Charitable Gaming Kim Sutherland can the machines be turned back on.

There are some exemptions- machines at a charitable organization's office, licensed bingo locations, and pre-approved fundraising events can keep operating.

But for everyone else? KHRG warns that failing to comply immediately will bring even more disciplinary action.

For organizations like Shirley's Way, it's a big hit. Mulrooney says they cannot keep helping the way they have been without charitable gaming. While of those efforts are now on pause, Mulrooney says they're adapting to the new requirements. "We are in the process of making some adjustments, but we are not shut down."

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