Appeals court rules against charity bingo

Charity bingo operators in Sacramento lost a major round in court last week when a three-judge panel overturned a lower court injunction that would have allowed them to stay in business.

While the case concerns operations in the Sacramento area, it has statewide implications. Several large gaming tribes have claimed that these operations violate the law and that by allowing them, the state was not living up to the gaming compacts signed with tribes. A year ago, the United Auburn Indian Tribe, which operates the large Thunder Valley Casino near Sacramento, sent a complaint letter to Governor Arnold Schwarzenegger and attorney general Jerry Brown threatening to withhold payments to the state called for in their gaming compact if the bingo operations continued.

Under California law and the provisions of the gaming compacts, California charities are allowed a type of gaming known as “remote caller bingo.” Numerous charities in the greater Sacramento area have been operating machines they say fit that description because they pitted multiple players in a bingo game against each other, without a “single player” option. The tribes argued that the machines were essentially slot machines or video poker machines in terms of their user experience.

Last year, Senator Gil Cedillo, D-Los Angeles, successfully carried a bill, SB 1369, to shut down these type of machines. United Cerebral Palsy of Greater Sacramento and Video Gaming Technologies, Inc.—the company which makes most of the bingo machines in question—filed suit, claiming SB 1369 violated the Americans with Disabilities Act (ADA). In June, a U.S. District Court judge in Sacramento, John Mendes, granted a preliminary injunction that allowed the bingo operators to stay in business.

The Ninth Circuit Court of Appeals in San Francisco heard the case on March 10 and issued their ruling March 27. The court found that SB 1369 “unambiguously” banned these machines types. The ruling also said that the machines went beyond “reasonable modifications” that would allow them protection under the ADA.  

“The Appeals Court judges are sending a clear message to the District judge,” said Allison Harvey, executive director of the California Tribal Business Alliance, of which United Auburn is a member. “It’s just a shame that we had to take this much effort to stop what are so obviously illegal slot machines.”

The ADA claim for the machines may have been somewhat novel. According to Doug Bergman, president of United Cerebral Palsy of Greater Sacramento, the legal issue was around disabled people being able to play bingo on a level playing field with everyone else. Bingo, as it is now played in retirement communities and elsewhere, often involves players tracking half a dozen cards at once, with a new number called every 10 seconds—something disabled people have a problem doing without the assistance of a bingo machine.
“I’ve got clients in my hall that cannot play paper bingo,” Bergman said. But he added, “It really gets down to the support these bingo machines were providing for these community services.”

That support comes out to $300,000 a year for his group, Bergman said. The new ruling means they will likely have to stop providing access to the Saddle Pals program in Orangevale, which offers horseback riding therapy to about 60 people with cerebral palsy, spina bifida, mental retardation and other conditions.

This is far less than the $7 million a year his group gets from the state. But the state money mostly only covers their basic operations, he said. They haven’t gotten an adjustment since 2003, suffered a three percent cut in March 1, and will likely be subject to a further seven percent cut on June 1. Meanwhile, revenues from other charity operations, like their thrift store and car donation program, are also falling.

“Now we’re going to find something else to replace that, and we’re running out of options of what ‘something else’ is,” Bergman said. “It’s not the state of California.”

The case now heads back to Judge Mendes, who will have the option of issuing another preliminary injunction. Bergman said that his group will be meeting with the attorney, John Goodman, this week and next to determine what their next legal action will be, if any. Without a further injunction, the remaining machines must be out April 11.

The Business Alliance’s Harvey said the Appeals Court ruling was so clear that she would be extremely surprised if Bergman tried to stop the removal of the machines again. She went on to claim to characterize charity bingo as big-time gambling operations that directly competed with tribal casinos.

“Last year alone they took in $54 million [in Sacramento County],” Harvey said. “This is not small time.”

Of that money, she said only eight percent made it to the charities, according to figures from the Sacramento County Sheriff's Dept.
Harvey went on to note that SB 1369 allowed for charity bingo parlors to get mitigation payments if they took the machines out by Jan. 1 of this year. Only one of the 15 bingo parlors in the area that got cease and desist letters from the Attorney General’s office last year did so, she said.

“Now they’re going to lose the machine and they’re not eligible for any assistance under the terms of the bill,” Harvey said.