Of all the types of legal gambling permitted under Colorado law, none has been more connected in the public mind with corruption and illegal activities than Colorado-licensed bingo (which includes bingo, pulltabs, and raffles).
Newspapers over the decades have had a field day with headlines on the subject. Here are a few. Denver Post, major page 1 headline, Nov.19,1989: "Colorado bingo game called License to Steal". Rocky Mountain News, Jan.13, 1990: "16 Denver cops charged in bingo scandal. Division chief quits; felonies filed against 2." Denver Post, Dec. 12, 1990: "Cop guilty of stealing bingo profits." More recently, Denver Post, June 4, 1997: "Little League Bingo Deal Investigated."
Colorado bingo (including pulltabs and raffles) is the result of a constitutional amendment which passed by only a 9,000 majority out of 480,000 votes cast in 1958. It is now the third largest legal gambling operation in the state with $220 million wagered in 1996, trailing only Colorado's casinos and the lottery. For every dollar spent in Colorado on a lottery ticket, 60 cents is spent on bingo.
The Rachel Volberg report on Problem and Pathological Gamblers in Colorado, prepared at the order of Gov. Romer and discussed in last week's column, reveals these compulsive gamblers are five times more likely than social gamblers to gamble on bingo and pulltabs, are significantly more likely to be women than men, and significantly more likely to be of African or Hispanic heritage.
On page 25, Volberg writes "Our analysis shows that for lifetime problem and pathological gamblers, legal types of gambling including Colorado casinos and bingo and pulltabs present the greatest risk." And on page 26, for non-skill games of chance, her chart shows the concept of "once hooked, hooked for life" is HIGHEST for problem and pathological gamblers in bingo and pulltabs.
Volberg claims that for April, 1997 (the month of her survey) of the total spent for legal and illegal gambling, 7.5 percent was for bingo or pulltabs compared to only 1.7 percent for horse and dog races.
As an example of financial harm caused by compulsive gambling, Ben
Blackburn, former managing editor of the News, wrote a column in July of 1989 about a Colorado bank employee who caused her bank to lose $5.8 million. She falsified bank records so that deficits in her department showed as gains in order to collect commissions on non-existent profits, and then spent nearly $1,000 every month for years on her Colorado bingo compulsive gambling habit. She pleaded guilty, but there was no jail time, just five years of probation.
Bingo is limited by the state constitution to "non-profit" groups who are described in CRS 12-9-104. But there is nothing in the bingo law or the non-profit laws that require persons who "run" non-profit organizations to take a vow of poverty as to their salaries. (Remember the national United Way scandal of a few years ago?)
Because it is a licensed activity, bingo comes under the state Sunset law, and is up for repassage or repeal in 1998. Of course, killing the law won't do any good. The state constitution makes it clear if the state doesn't regulate, bingo will continue, basically unregulated.
This year's Sunset review of bingo begins in House Business Affairs the afternoon of Wednesday, Nov. 19th. Usually, any major bingo law revision goes to State Affairs Committee, which oversees the office of Secretary of State Victoria Buckley. House-Senate Joint Rule 25 (b) provides State Affairs Committee SHALL (not "may") have jurisdiction over the Secretary of State's specific programs, such as bingo licenses.
For example, in 1996, SB 150, an attempt to allow a player to electronically play 60 bingo cards at once, went through House and Senate State Affairs. It was later vetoed by Gov. Romer who quoted Buckley as having "reservations as to whether the bingo law contains sufficient regulatory powers to effectively meet this regulatory need." HB 1046 on additional bingo licenses also went through House and Senate State Affairs and became law.
When House Speaker Chuck Berry sent bingo to Business Affairs Committee, there was quite a bit of speculation among lobbyists and others standing outside the House chambers on Oct. 21st, as to "why?".
One reason might be the fate of SB 214 in 1997, a measure based on the State Auditor's report of November, 1996, to strengthen control over bingo licensees. Contrary to Joint Rule 25 (b), it started in Senate Business Affairs and passed to the House. In the House it went to State Affairs on April 30th, and was reported killed in committee on May 2d.
The Dept. of Regulatory Agencies (DORA) Sunset report on bingo is the basis for the coming legislative review. The key recommendation out of 16 offered follows a "soft" suggestion in DORA's 1992 Sunset report and a "somewhat" harder one in the State Auditor's 1996 report on bingo: Transfer enforcement of the law to the Dept. of Revenue, which now oversees all other forms of legal gambling.
DORA claims "Of the 17 (bingo) states reporting total amounts wagered exceeding $100 million per year, four regulate through their revenue departments, eight regulate through their lottery or other independent commissions, four regulate through their law enforcement departments, and one, Colorado, regulates through its secretary of state."
DORA also points out Revenue investigators are Level II Peace Officers with authority to make arrests and State investigators cannot. "They must rely on local law enforcement agencies to make arrests." DORA would also leave only that part of bingo licensing set out in the constitution with the Secretary of State.
Is bingo in Business Affairs an attempt to move enforcement to Revenue, or to avoid doing this? The answer may be political. Although there earlier appeared to be some Republican desire for a primary opponent against Buckley's run for a second four-year term, it now appears she will retain the Republican nomination.
One weak spot in her re-election bid will be bingo, what she has done, what she has not done, and where her campaign contributions are coming from. Moving regulatory enforcement out from under her before the 1998 campaign begins in earnest might actually make bingo a non-issue in the coming campaign.
On what she has done, or not done, DORA states "...the Nov.,1996 report of the State Auditor revealed a disturbing fact: From 1991-1994, (State) pursued 25-30 enforcement actions per year, but in 1995 (State) pursued only seven such actions," and "...prior to 1995, (State) initiated five or six random, in-depth investigations or audits per investigator per year. Since 1995, none has been conducted." Of course, 1995 was Buckley's first year in office.
As to where contributions have come from, the State Auditor's report was tougher on Buckley than the 1997 DORA report regarding accepting contributions from bingo licensees. The Auditor recommended she refrain from soliciting and accepting campaign contributions from people she regulates. Buckley disagreed.
Neither report "named" the lobbyist involved in the fundraisers, but the Denver Post and the Rocky Mountain News did: Freda Poundstone, who according to the audit "specifically invited bingo suppliers and bingo landlords. The suggested donation was $500 for a party of two..."
Poundstone is the registered lobbyist for Bingo Raffle Associates of Volunteers (BRAVO), which is, according to Westword, a non-profit association run by Kevin Doyle. Westword alleged several months ago that BRAVO, along with another organization "paid Poundstone more than $100,000 between 1995 and the spring of 1997" and "...makes the $500-a-month lease payments on Poundstone's car, a late-model Cadillac..."
Both the Post and News reporters may find "Poundstone-watching" an interesting spectator sport during the bingo hearings on Nov. 19th.
Next week, the concluding column regarding the Volberg report on compulsive gamblers in Colorado.
Jerry Kopel writes a column for the Statesman based on 22 years past experience as a state legislator.
Copyright 2015 Jerry Kopel & David Kopel