Charities and Catholic Church are given California OK for high-stakes bingo games
By James P. Sweeney
OCTOBER 4, 2008 (www.signonsandiego.com) – Delivering a big victory for gaming tribes and the Catholic Church, Gov. Arnold Schwarzenegger has signed legislation that outlaws non-Indian bingo machines while authorizing high-stakes bingo for charities and nonprofits.
Within perhaps a year, the Catholic Church and other charities could be offering simulcast bingo games with thousands of players competing for prizes of up to six figures.
The compromise will force another group of charities and nonprofits to give up electronic bingo machines, unless manufacturers can find relief in court.
“There are some people talking today about what the next steps are,” said Doug Bergman, president of United Cerebral Palsy of Sacramento, which nets more than $200,000 a year from bingo machines. “I'm hoping there's going to be further litigation.”
Manufacturers, who have won favorable initial rulings in state and federal courts, were mum yesterday. But backers of the legislation said they expect the legal fight to continue.
Bingo machines look and play much like slots. To remove any ambiguity in state law, the legislation – Senate Bill 1369 by Sen. Gil Cedillo, D-Los Angeles – expressly prohibits bingo machines other than those in Indian casinos or federal military installations. The governor signed the measure into law late Tuesday.
Machine manufacturers “have been hiding behind the skirts of legitimate charities for over two years now and finally they're going to be shown the door,” said David Quintana, a lobbyist for the California Tribal Business Alliance, which includes the casinos of Pala, Pauma and Viejas of San Diego County.
But gambling opponents, who believe bingo machines are illegal, said the legislation promises another round of expansion.
Background: Some charities have come to rely on income from legally suspect bingo machines, slot machinelike devices that could violate monopoly guarantees in the state's Indian gaming agreements.
What's changing: A new law leaves no doubt about the machine's legal status. It also authorizes the Catholic Church and others to offer high-stakes bingo.
The future: Barring legal challenges, high-stakes bingo games could start next year.
“Under the guise of so-called charitable gaming, California is going to be exposed to even more high-stakes gambling,” said Fred Jones, an attorney with the faith-based California Coalition Against Gambling Expansion.
“This changes the kind of charitable bingo that we are all familiar with,” Jones continued. “When you start changing not just the scope, but the way the game is conducted, the implications could be, who knows, wide open.”
A 1976 ballot measure authorized California charities and nonprofits to operate conventional, paper-and-dauber bingo games for charitable purposes. But bingo offered by the Catholic Church, Elks lodges and other charities has struggled in recent years to compete with flourishing tribal casinos.
Cedillo, a Catholic, agreed to carry the legislation for his local parish. The bill authorizes “remote caller bingo,” pooled games in which many locations can be linked with a video or audio connection.
A $250 prize limit that has existed for more than 30 years was eliminated. Simulcast games can offer payouts equal to 37 percent of gross revenues, which could produce six-figure prizes, church and other officials predicted.
At least 43 percent of revenues must go to the sponsoring charity or nonprofit, with no more than 20 percent of receipts spent on overhead.
The prize limit will double to $500 for small conventional games.
Under the measure, the Catholic Church and other charities can operate pooled bingo only one day a week, and no more than 750 players may gather at any single location.
The high-stakes games will be regulated by the California Gambling Control Commission, which also will license key employees, much like it does for the state's Indian casinos and card rooms.
Although the legislation takes effect on Jan. 1, the pooled games could not begin until months later, after the commission drafts an initial set of regulatory guidelines.
“We've got a long road to go yet, but at least we've got the opportunity,” said the Rev. Joseph Shea, a Simi Valley pastor who lead the church's push for the legislation.
Critics derided the legislation as an effort to set up a “Catholic Defense Fund” to help cover the settlements of sex-abuse lawsuits. “It has nothing to do with that,” Shea said. “It has everything to do with our Catholic schools. No money will be going to pay off the lawsuits.”
The dispute over electronic bingo machines has simmered for years.
State attorneys general have repeatedly concluded that electronic bingo, other than card-minders and those games on reservations or military installations, is illegal under long-standing state law.
Nonetheless, legally suspect bingo-based machines began to proliferate in Sacramento, the San Francisco Bay Area and other locations in Southern California, although none apparently have been found in San Diego County.
Located in the urban settings, the machines posed a competitive threat to remote Indian casinos.
Viejas and other Indian casinos began warning the state more than a year ago that off-reservation bingo machines violated a monopoly on electronic gaming devices for which they agreed to pay the state hundreds of millions of dollars a year.
Unless the state acted, tribes threatened to suspend those payments.