Crackdown on electronic bingo begins

Parlors get 30 days to clear out devices

SACRAMENTO – More than 20 years after the state first warned that electronic bingo games are illegal, Attorney General Jerry Brown has launched a crackdown to halt a proliferation of the machines.

State agents notified seven bingo parlors in Sacramento and adjoining suburbs, as well as one in Whittier, that they have 30 days to clear out the devices that mimic slot machines or the machines may be confiscated and destroyed. More locations will be notified in coming days.

The state delivered the same message to vendors who lease most of the machines and have the most to lose. They could lose their expensive inventory as well as licenses to sell or lease the bingo machines to Indian casinos, where they are legal.

“This has not been a problem in most places, but now it seems to be growing,” Brown said in an interview.

In recent months, bingo machines have been reported in Santa Clara County, Pleasant Hill, Berkeley, Concord and other locations. No such machines have been reported in San Diego County, state officials said.

But word has been circulating that bingo machines were about to move beyond the low-rent commercial and light-industrial locations where they typically are found.

“We've been hearing rumors that some of the card rooms were thinking about them,” said Matt Campoy, acting chief of the attorney general's Bureau of Gambling Control. “Whether they were going to do it or not, we don't know. But it's not good to allow these things to linger when you start hearing that kind of conversation.”

The unannounced move this week by the Bureau of Gambling Control could have broad reverberations.

At the state Capitol, it could avert a high-stakes legal fight over hundreds of millions of dollars that Indian casinos are due to pay the state in coming years.

The crackdown also could give a second chance to stalled legislation that would enable the Catholic Church and other nonprofits to operate interconnected games of standard bingo that could attract players with much larger prizes.

But for now, charities and nonprofits who face the loss of a primary revenue source were left pleading their case and pondering litigation.

“It's tragic,” said Doug Pringle, president of Disabled Sports USA in Sacramento. “Nearly all of the net revenue we get from bingo comes from the machines.

“Our clients – people with disabilities – are going to suffer, and it's going to be the same for the other halls, the Society for the Blind, United Cerebral Palsy, charities providing services for youth, the homeless and hungry, they're all going to suffer,” Pringle said.

Since 1976, state law has given local governments the discretion to authorize bingo for charities, mobile home parks and senior citizens' groups as long as the proceeds are used only for charitable purposes.

Conventional bingo uses paper cards with random numbers scattered under each of the letters that spell bingo. Soon after the state legalized the game for charities, entrepreneurs began pushing electronic versions.

In a series of opinions and advisories dating to 1984, California attorneys general have repeatedly concluded that bingo requires paper cards and that electronic adaptations are illegal, except on Indian reservations.

The latest bulletin from Brown's the Bureau of Gambling Control was issued in August. Since then, gaming tribes, anti-gambling activists and even some in the Attorney General's Office have wondered what Brown was waiting for.

Hundreds of bingo machines in Sacramento County have been collecting more than $40 million a year from players. Tribes warned that the slot knockoffs could violate gaming-device monopolies guaranteed in their state gambling agreements, or compacts.

If that happens, the compacts allow tribes to suspend revenue-sharing payments to the state. In March, the United Auburn band of suburban Sacramento notified Gov. Arnold Schwarzenegger that it believed it was entitled to suspend a $33 million payment.

The tribe, which operates one of the most successful Indian casinos in the nation, later made the payment under protest and has entered a formal dispute-resolution process with the state.

The Whittier bingo parlor could have violated exclusivity guarantees of more than half a dozen of the state's biggest gaming tribes, including Pala of San Diego County and Pechanga of Temecula.

“This really goes to the integrity of the compacts,” said Alison Harvey, executive director of the California Tribal Business Association. “The governor can't ask tribes to pay that kind of money and then allow this stuff to start proliferating.”

Brown said the governor and the tribes had urged him to take some action against the bingo machines. Tribes have been political allies and campaign contributors to the Democratic attorney general, who traveled to San Diego last month for the National Indian Gaming Association's annual conference.

Brown and Campoy said the delay in sending out agents reflected the state's preference that bingo parlors have a chance to respond to the latest warning.

“They've had a lot of time,” Brown said. “But instead of complying with the bulletin, they seem to have gone in the opposite direction.”

Brown also was prodded by state Sen. Gil Cedillo, a Los Angeles Democrat who has sponsored legislation backed by the Catholic Church, Elks lodges and others that could revolutionize standard bingo. Cedillo sent Brown a letter late last week asking him to move against the machines.

Tribes blocked Cedillo's measure earlier this year, saying they could not support an expansion of conventional bingo while the state tolerated illegal bingo machines.

Tribes have been meeting with Cedillo in the weeks since, and at least those represented by the tribal business alliance would be willing to drop their opposition if the machines are banished, Harvey said.

Cedillo's measure would authorize churches, charities and nonprofits to operate audio-or video-linked games of conventional bingo with prizes well in excess of the existing $250 limit.

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By James P. Sweeney
U-T SACRAMENTO BUREAU
May 10, 2008
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