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Best of I. Nelson Rose

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Is It Bingo or a Slot Machine?

13 January 2003

A new casino competitor is coming to America: the bingosino.

Bingo is already being played on video screens. These gaming devices are about to become virtually indistinguishable from video slots. They will be joined by other machines and fast-action table games, giving bingo halls, especially those on Indian land, the look and feel of casinos.

These revolutionary new games come from the minds of inventors, and their lawyers. The legal fights are usually over the definition of "bingo."

The door was opened by Congress when it passed the Indian Gaming Regulatory Act ("IGRA"). The Wisconsin Legislature once defined "bingo" so narrowly that it had to be played on paper cards with a grid of 25 squares and a winning pattern of five across. Congress went to the other extreme, defining bingo as a game of chance played for prizes that is won by the first person covering any predetermined pattern on his or her card. "Electronic, computer, or other technologic aids" are expressly allowed, as are other games "including, if played in the same location, pull-tabs, punch boards, tip jars, instant bingo, and other games similar to bingo."

Federal courts over the past few years have upheld the right of tribes to offer bingo played on linked video machines, allowing players to play on electronic cards. There is no requirement that there be a bingo blower, so the game has been greatly speeded up by computerized random number generators.

The National Indian Gaming Commission ("NIGC") has gotten the message and recently issued new regulations, redefining what is allowed in the way of electronic aids. The regulators may not have intended it, but they have just authorized tribes, without compacts, to have unlimited numbers of bingo slot machines.

This is not an exaggeration. Multimedia Games Inc. of Austin, Texas is already producing and placing with tribes a Class II video bingo game that displays the winnings not only as a marked bingo card, but also as three reels with traditional slot machine symbols.

For an operator without a compact, the difference between a gaming device being classified as Class II, as opposed to Class III, is usually the difference between being legal and committing a serious federal felony.

Under the IGRA, a tribe may operate any game which is Class II without having to get permission from the state where the tribe is located. There are some restrictions, such as the state must allow some form of Class II gaming. Since Class II includes bingo, this is usually not a problem.

Class III gaming includes the most profitable, and dangerous, forms of gambling, specifically including slot machines and "electronic and electromechanical facsimiles." Before a tribe may legally offer Class III gaming, it must first enter into a compact with the state where the tribe is located. The state has to sign the compact only if state law permits someone to operate that form of gambling.

It is difficult to get Class III games, particularly slot machines, legally onto tribal land, since most states pretend to not have gaming devices, and do not want untaxed tribal casinos within their borders.

Putting slot machines onto a reservation without a compact is a felony, as some operators who have been sent to prison have learned.

The federal law prohibiting gaming devices on Indian land is commonly called the Johnson Act. Because it was originally passed to outlaw three-reel slot machines, at first it required a gaming device to have a reel. Operators quickly figured out ways to get around the law, so Congress amended the Johnson Act. However, Congress went overboard the other way, writing a statute that encompasses almost anything connected with gambling.

The Johnson Act now defines "gambling device" as including not only traditional slot machines, but also "any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling..."

You do not have to be a Harvard Law School graduate to see there is a problem here. Although the law was designed to go after slot machines, it now expressly includes roulette wheels. If a roulette wheel is a "gambling device," prohibited on Indian land under the Johnson Act, how about a bingo ball blower?

Almost no one believes Congress intended to outlaw bingo blowers, and therefore bingo itself, from Indian reservations, and no court has found bingo equipment to be a gambling device under the Johnson Act. Still, the Johnson Act is still the law, and it says that all gambling devices are prohibited from Indian land.

Congress recognized part of the problem when it wrote the IGRA. Class III gaming, including slot machines, is expressly exempt from the Johnson Act, if it is conducted legally under a tribal-state compact.

But what about Class II? The IGRA is silent about whether the Johnson Act applies.

The NIGC originally took the logical position that Congress must have intended that the Johnson Act did apply to Class II gaming. So, the NIGC issued regulations stating that electronic aids could not be used in connection with bingo, if this meant playing a game on an electronic or electromechanical facsimile, defined as a gambling device under the Johnson Act.

Somewhat surprisingly, the courts disagreed. Judges focused almost entirely on the question of whether a game played with electronic devices was still bingo and basically ignored whether the machines would be illegal under the Johnson Act.

The NIGC has now rewritten its regulations to meet these court decisions. The definitions for electronic aids, facsimiles and "other games similar to bingo" have been greatly broadened to allow bingo to be played in virtually any form, so long as the player is not playing against the house.

Even some house-banked games are allowed, under some conditions. A paper pull-tab vending machine, such as Lucky Tab II, can play exactly like a slot machine, so long as the machine spits out a piece of paper, which technically determines whether the player has won or lost. Linked bingo video devices, such as MegaMania, can require players to put in an additional 25 cents to see three more balls and pay a set amount if a player covers two, three or four corners, so long as a regular bingo game is being played at the same time.

One little-noticed provision of the new NIGC regs may take bingo the final step to becoming a slot machine game. In its commentary accompanying the new rules, the NIGC points out that, "A manual component to the game is not necessary."

Bingo players do not have to call out, "Bingo!" or even press a "Win" button. All they have to do is put their money in and start the game, which could be done by pulling a handle. The bingo machine will tell them whether they have won by showing symbols, such as three reels, and will then pay winners automatically.

Sound familiar?

Recent Articles
Best of I. Nelson Rose
I. Nelson Rose

Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose

I. Nelson Rose
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose