Politics & Government

April 16, 2014

Texas Lottery Commission delays decision on expanding bingo rules

Commissioners will seek more public comment and revisit the issue.

Texas lottery officials on Wednesday delayed weighing in on a proposal to let bingo halls throughout the state use electronic devices similar to slot machines that opponents say would expand gambling.

At issue is a proposal to let bingo players use “video confirmation” to show whether paper pull-tab tickets, which are similar to lottery scratch-off tickets, are winners.

Concern erupted in recent days from top Republicans and dozens of conservative lawmakers, prompting the Texas Lottery Commission to put off a decision.

“We are not going to make it go away. We are going to defer it,” Commission Chairman J. Winston Krause told a standing-room-only crowd. “We will come back to this at a later date.”

Also delayed was a decision on proposals to allow multiplay pull-tab bingo tickets and to let charities set up accounts for bingo players that can be used to buy pull-tab tickets and other bingo products.

Supporters have said video confirmation could draw more people to bingo halls and generate more money for Texas charities. Opponents say the machines will look and act much like slot machines, essentially bringing casino-style gambling to Texas.

“We are disappointed” in the delay, said Stephen Fenoglio, an attorney for Texas charities that benefit from bingo.

He said assertions that video confirmation would expand gambling are “false.”

“It’s absolute fiction,” he said. “This isn’t any sort of slot machine or electronic gaming. … It’s merely a confirmation of a pull-tab ticket.”

Opponents disagree.

“This is really just one attempt of many to engage this issue of taking some aspect of pull-tab bingo and add an electronic element to it,” said Rob Kohler, a consultant with the Dallas-based Christian Life Commission of the Baptist General Convention of Texas, which opposes increased gambling.

Kohler has said that this proposal would change “the gaming landscape in the state and [allow] the entrance of Indian gaming like we’ve never seen before.”

Pull-tab tickets

Lawmakers approved state-regulated bingo in 1981 to raise money for Texas charities, which have received more than $1 billion through the game, a report shows.

In 2011, bingo sales in Texas reached an all-time high, topping $700 million, and more than $533 million was paid to players, according to the most recent annual report from the Charitable Bingo Operations Division of the Lottery Commission.

Interest in pull-tab tickets remains steady, and sales have increased every year since 2002. Now, players pull tabs to reveal whether the card they bought is a winner.

A proposal to allow video confirmation of these tickets was submitted this year by K&B Sales and the Veterans of Foreign Wars-Department of Texas.

“Like anything, if you don’t innovate, you die,” said Fenoglio, who also represents K&B Sales and added that video confirmation is already used in some cases for event tickets.

Lottery Commission officials stressed that the proposal would not expand gambling.

They say that the pull-tab tickets would still be printed on paper and that the machines wouldn’t determine the outcome, just display it. They also say the machines — which could range in size from a laptop to a slot machine — would be prevented from simulating dice, rolling or spinning wheels, or “the play of casino-style games.”

“A player would not be playing the game on an electronic device,” said James A. Person, assistant general counsel for the commission. “There would be some electronic elements.

“But the perception that these equate to slot machines is out there,” he said. “There are no electronic tickets.”

Concerns raised

Critics maintain that two elements in the proposed rule changes could be combined to create slot-machine-style play.

They say taking “multiplay” pull-tab bingo tickets, which allow multiple plays on a single ticket, and watching the outcome of those games on “video confirmation” could simulate casino-style gambling.

And while certain casino-style images — dice, wheels and poker — would be prevented, the rules don’t appear to prohibit other popular slot machine symbols such as bars, bells and cherries.

Kohler said such discussions belong before the Legislature, not the Lottery Commission.

“We will have this conversation again, hopefully before the Legislature,” he said.

Three dozen state lawmakers representing the Texas Conservative Coalition legislative caucus wrote a letter to urge lottery commissioners to reject proposals that “would allow the outcome of pull-tab bingo games to have electronic, video or digital representation.”

“Adopting rules that incorporate such proposals would allow electronic screens that could look and operate in a way that is very similar to slot machines to exist in bingo halls in Texas,” according to the letter.

Among those who signed the letter are Republican Sens. Kelly Hancock of North Richland Hills and Jane Nelson of Flower Mound and Reps. Giovanni Capriglione of Southlake, Phil King of Weatherford and Stephanie Klick, Matt Krause and Craig Goldman, all of Fort Worth.

“The Legislature has made no provision for the adoption of rules that would permit electronic or digital pull-tab games, the electronic or digital promotion of such games or the electronic or digital representation of the outcome of such games,” the letter says.

Other key Republicans also expressed reservations.

“We are concerned that the Lottery Commission’s consideration to allow electronic gaming systems in bingo halls would have the same effect as expanding slot machine gaming across the state,” said Steve Munisteri, who heads the Republican Party of Texas.

“I applaud our Texas Legislature for continuing to reject the expansion of electronic gaming devices,” he said. “The Lottery Commission should honor the will of the Legislature and not use technicalities to expand an activity that the public and our elected representatives continue to reject.”

‘No desire to expand gaming’

Electronic gaming devices have been an issue for more than a decade in Texas as some lawmakers have supported them while the overall Legislature has rejected them.

The issue heated up again in 2007, when Nelson, a Republican whose district includes part of Tarrant County, said the Lottery Commission tried to skirt the constitutional prohibition on electronic gaming devices by allowing charitable bingo halls to use video monitors to display winning cards on some form of the game.

Attorney General Greg Abbott had already ruled that neither the Lottery Commission nor the Legislature could authorize electronic pull-tab bingo games without amending the Texas Constitution, something that voters would have to approve.

“The attorney general already ruled that not even the Legislature may approve these devices without a constitutional amendment,” Nelson said Wednesday. “For the commission to even consider this rule is an overreach of its authority.”

Commission officials say they aren’t trying to usurp the Legislature’s responsibilities. That’s why they are delaying the matter and giving Texans more time to weigh in.

“We are going to give everyone a mulligan and open the public comment period again,” said J. Winston Krause, the commission chairman.

But the officials said they know their role.

“We are very aware of what our charge is here,” said Mary Ann Williamson, a commissioner. “We have no desire to expand gaming of any kind.

“That is not our charge,” she said. “Any inference otherwise, I find rather disingenuous.”

No date has been set to reconsider the proposal.

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