MICHAEL ALLEN JONES / mjones@sacbee.com

A deal between Indian casinos and charities would ban bingo machines from charity fundraisers. Both the machine manufacturers and small charities oppose this plan.

Capitol and California
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Indian tribes, charities reach deal on bingo fundraisers

Published: Wednesday, Aug. 20, 2008 - 12:00 am | Page 1A

California's politically powerful Indian casino tribes and the state's major charities have worked out a "win-win" deal that would allow the charities to expand their bingo operations while preserving the tribes' constitutional monopoly on slot machines.

But the compromise, which has attracted a swarm of lobbyists in the waning days of the Legislature's session, might be a lose-lose for some small charities, particularly in the Sacramento area, and for manufacturers of electronic games that look and play like slot machines but are advertised as "electronic bingo" machines.

The deal would specifically ban charities from operating such machines, which have been a bone of legal contention for two decades and which tribes claim violate their exclusive right to operate slot machines in California.

"The tribes are as sympathetic as anyone else to the plight of the charities," said Doug Elmets, spokesman for the California Tribal Business Alliance, a group of six casino tribes. "They just want to be sure that whatever (the charities) do is operating within a regulated environment."

In return for the ban on the machines, the charities would be allowed to run games simultaneously at multiple sites by linking the sites together with audio or telecasting and offer much bigger prizes.

"We tried to craft this so they can make more money for more services to more people," said Sen. Gil Cedillo, D-Los Angeles, the bill's author.

But a group of bingo machine manufacturers and smaller charities say the proposal would cripple the charities' fundraising efforts because they would have to give up their money-making machines while having no network of sites to link up.

"Mega-organizations like the Catholic Church would do great," said Ravi Mehta, the lead lobbyist for a group calling itself the California Charity Bingo Association. "But small charities … will be devastated by this."

Under terms of Senate Bill 1369, which was wedged into a bill that originally dealt with student nutrition, local governments would be authorized to allow operation of a game called "remote caller bingo."

Operators of the game, which would be limited to charities and some non-profit groups, senior citizens associations, mobile home park groups and school districts, could use technology such as simulcasts to broadcast games to various venues run by the group.

For example, a service club could link its various chapters around the state to a single game, which could offer large prizes. No more than 750 people could be at any one venue.

The bill would require that no more than 37 percent of the gross revenues could be returned in prizes, and require that 43 percent of the gross go to charitable purposes.

Maximum prizes for traditional "paper-and-dauber" bingo games would be raised from the current $250 to $500.

The measure would also ban the use of electronic video games that look and play like slot machines, except for a small simulation of a bingo card in one corner of the screen.

The machines are linked to each other, so that the player is competing against other players and not the house.

Because they play faster than traditional bingo games, the machines have become popular fundraising devices for small charities, particularly in Sacramento County and parts of the Bay Area.

The United Cerebral Palsy Association of Greater Sacramento, for example, makes about 80 percent of its annual $250,000 income from bingo from the 75 machines it operates two nights a week at a bingo hall in Carmichael.

Doug Bergman, president and CEO of the group, said the money pays for Saddle Pals, a therapeutic horseback-riding program for kids with the disorder.

"If I lost the electronic games, I would not be able to keep that bingo hall operational," he said. " I can't survive on paper-and-dauber games anymore. At best I would break even, with no money for the Saddle Pals program."

In an interview Tuesday, Cedillo said the bill had been amended to allow up to 10 independent charities to form an association and offer linked remote caller games.

But Bergman said such an alliance would require a hefty investment in equipment and pose accounting and legal headaches.

"It would take years and years for us to net out of remote caller bingo what I (net out of the machines) today," he said.

Other charitable groups, however, said they welcomed the proposal.

"We have to do something, or we are going to die" as nonprofit fundraisers because of competition from other gambling, said the Rev. Joseph Shea, pastor of St. Rose of Lima Catholic Church in Simi Valley.

The parish takes in about $100,000 a year from twice-weekly bingo games but does not have bingo machines.

"This is a very sound and reasonable proposal," Shea said.

It also has its pragmatic side. Casino tribes are among the biggest political contributors in California, and revenue-sharing compacts between the tribes and state are expected to generate $446 million in revenues to the state this fiscal year.

But several casino tribes have threatened to abrogate their compacts, which give them exclusive rights to slots, if state officials did not crack down on the electronic bingo games.

In May, Attorney General Jerry Brown's office sent cease-and-desist orders to seven Sacramento-area bingo parlors.

But in late June, a federal judge granted an injunction against the state, prohibiting state agents from seizing the machines until their legal status is determined by the courts.

Casino tribes took the threat of the electronic bingo games seriously enough to hire dozens of lobbyists to work both legislative houses on behalf of Cedillo's bill.

"I don't know the exact number," said Mehta, the lead lobbyist for the bill's opponents, "but I've probably seen (about 40 to 50) roaming the hallways.

"They are in absolute full force on this one."


Call Steve Wiegand, Bee Capitol Bureau, (916) 321-1076.


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