Use of Bingo Profit for Salaries Opposed

A Los Angeles official Monday told a state Senate panel that California law does not require “charities” to actually find charitable uses for their bingo money.

Robert Burns, general manager of the Department of Social Services, in a written statement opposing legislation being sponsored by state Sen. Leroy Greene (D-Carmichael), said that state law does not require a “charity” conducting bingo games to have “an actual charitable program.”

“Nor does the law require that a minimum amount of bingo proceeds be used for charitable purposes,” he said. “These weaknesses in the present law allow entrepreneurs to file the correct form, pay a small fee and obtain a tax-exempt certificate, with which bingo can be conducted.

“If (Greene’s bill) passes, these entrepreneurs can use bingo profits, if any, to pay salaries to friends, relatives or themselves. In the end, the smaller church or school game is driven out of the bingo marketplace because of these entrepreneurial pressures.”

Income and Charity

Burns said that during the last 10 years in Los Angeles, bingo games have generated $232.4 million in receipts, of which $36 million, or 15%, was available for charity. The remainder was used for prizes and overhead, he said.

The Senate committee also heard testimony saying that state law makes it difficult to audit the parlors and to find out how much money individuals win.

Sacramento County Sheriff Glen Craig complained to the Senate Governmental Organization Committee that bingo parlors are not required to keep records of winning players, and said it is difficult to audit the parlors.

“If I was inclined, if I’d taken in $5,000 and wanted to claim $3,000, there’s no way for us to tell the difference. The situation is certainly ripe for skimming,” he testified.

Bingo was legalized in California for charitable purposes by voters in 1976.

Greene’s bill would revise the state’s regulation of bingo games, although it would continue to prohibit those conducting the games to receive salaries from them. It would, however, allow organizations to use bingo funds to pay salaries of organization employees who don’t conduct the games.

Van de Camp Opposed

Atty. Gen. John Van de Kamp has opposed Greene’s bill, contending that it would overturn a recent appellate court decision declaring it illegal to pay any salaries or wages from charitable bingo games. A basis of the legal finding, Van de Kamp’s office said, was the state’s interest in deterring organized crime from infiltrating charity bingo.

Using bingo proceeds to pay employees “encourages big-time bingo and is against the purpose of the original law, which is to allow mom-and-pop outfits to continue legally,” testified Peter Shack, a deputy attorney general.

Craig said bingo parlors in Sacramento County take in $30 million a year, but just $2.9 million of that amount goes to charity while the rest is spent on prizes and overhead. He proposed a standardized, statewide system of accounting for bingo parlors similar to laws governing other gaming.

But Greene said that would be difficult. “I really don’t want to see a bunch of little old ladies getting themselves into trouble because they don’t know how to properly fill out audit forms,” Greene said.