Controversy stems from judge's bingo ruling

Country Crossing Developer Ronnie Gilley and Alabama Gov. Bob Riley are at odds once again about electronic bingo.

Riley released a statement Monday praising U.S. District Judge Lynwood Smith's ruling in favor of a Madison County sheriff who seized 200 machines from a bingo hall in Triana. He called the action a definitive ruling on the illegality of electronic bingo machines as a whole throughout the state.

Country Crossing Developer Ronnie Gilley and Alabama Gov. Bob Riley are at odds once again about electronic bingo.

Riley released a statement Monday praising U.S. District Judge Lynwood Smith's ruling in favor of a Madison County sheriff who seized 200 machines from a bingo hall in Triana. He called the action a definitive ruling on the illegality of electronic bingo machines as a whole throughout the state.

"The federal judge's ruling could not be clearer, and it echoes exactly what we have been saying about the illegality of so-called 'bingo' machines in Alabama. Machines that look and act like slot machines constitute illegal slot machines, no matter what they're called," Riley said. "We hope all owners of these machines throughout the United States are aware of the potential consequences of continuing to operate them in Alabama after this federal judge's ruling. This opinion is a strong indication that the days of illegal casinos in Alabama are numbered, and manufacturers of these illegal machines act at their own peril in allowing their machines to remain in this state in the wake of this opinion," he said.

A press release from Gilley's office countered Riley's assessment of the ruling, stating the ruling "is not representative of the legality of other charitable electronic bingo operations in Alabama."

"Gov. Riley's comment calling his cousin's ruling 'definitive' is a misrepresentation of the ruling," the release further states. "Smith's decision in favor of the sheriff's accusations that the bingo operation in question was operating illegally was warranted based on facts surrounding the allocation of revenue received from the bingo operation and failure to comply with Amendment 387. Smith's ruling was not in reference to the legality of the machines, but rather the legality of how the Department of Texas Veterans of Foreign Wars was operating its business."

In reference to allegations that Riley and Smith are cousins, Jeff Emmerson with Riley's press office confirmed the men are "distant cousins."

"They obviously never discussed the case. Gov. Riley said he has not spoken with Smith in many years," he explained. "For clarification, the plaintiffs chose the venue for the lawsuit, not the state and not the sheriff. They chose to sue in federal court and not in state court. We also checked and nobody ever made a motion for recusal.

It appears both the plaintiffs and the defendants were comfortable with Smith hearing the case."

Jay Walker, spokesman for Country Crossing, said though Riley's description of the ruling is misleading, Gilley's office also praises the judge's ruling.

"I commend the court for acting justly in regards to illegal bingo operations in our state. However, the governor totally misrepresented the judge's orders," he said.

Walker continued, arguing that "just because there are instances of illegal bingo operations in the state, it is ridiculous that Riley is so adamant to shut down projects like Country Crossing - a development that is well within state guidelines to conduct charitable electronic bingo in Houston County."

He added that Smith's ruling will have no bearing on Country Crossing and will not deter the continued construction of the facility.

Smith's ruling stems from two cases in 2007 and 2008 in which Madison County Sheriff Blake Dorning seized $2 million worth of electronic bingo machines from a facility run by an organization known as the Department of Texas Veterans of Foreign Wars in corroboration with the Alabama VFW.

An estimated 20 to 25 charities not involved in any way with the Texas or Alabama VFWs participated in the bingo hall and allegedly received a portion of the facility's revenue.

"The Triana gaming operations were structured so that 7 percent of net revenue was payable to the Texas VFW and 3 percent of net to the Alabama VFW," Smith wrote in his ruling.

The facility was opened allegedly in accordance with Amendment 387 to the Alabama Constitution allowing electronic bingo under certain stipulations.

"The operation of bingo games for prizes or money by nonprofit organizations for charitable or educational purposes shall be legal in Madison county, subject to the provisions of any resolution or ordinance by the county governing body or the governing bodies of the respective cities and towns, within their respective jurisdictions," the amendment states.

The amendment also states that any such facility should comply with certain regulations including no person under the age 19 is permitted to play, no bingo license will be given to a nonprofit organization less than 23 months old, the bingo games must be played on land or in a building leased or owned by the nonprofit organization, no nonprofit organization shall enter into any contract with any individual, firm, association or corporation to have said individual or entity operate bingo games or concessions on behalf of the nonprofit organization, nor shall said nonprofit organization pay consulting fees to any individual or entity for any services performed in relation to the operation or conduct of a bingo game; an organization's name cannot be used in affiliation with a bingo game in which they are not directly involved; prizes given by any nonprofit organization for the playing of bingo games shall not exceed $1,000 in cash or gifts of equivalent value during any bingo session or $2,000 in cash or gifts of equivalent value during any calendar week; and no person or organization, by whatever name or composition thereof, shall take any salary, expense money, or fees as remuneration for services rendered in the operation of any bingo game.

In his ruling, Smith states the Triana gaming facility was in violation of guidelines set by Amendment 387.

"The games were not operated by a charity. They were not operated only on a premise owned or leased by the entity on whose behalf the game was played.

Multiple individuals and companies contracted to provide services for the gaming operation, in exchange for a fee or percentage of receipts. The games were not conducted 'directly and solely' by a single nonprofit entity. Prizes awarded may have exceeded the explicit dollar limitations for prizes. Because the court concludes that plaintiff has violated various provisions of Amendment 387, the court need not consider the question of whether the Nova electronic machines constitute 'bingo' as the term is used in Amendment 387," he wrote.

Smith also addressed the difference between what has been donned "electronic bingo machines" and slot machines.

He cited an Alabama Supreme Court Ruling in Barber v. Jefferson County Racing Association Inc. in which the court ruled that an electronic gaming machine did not represent a the winnings of a sweepstakes in an entertaining way, but instead a slot machine.

"Similarly, the electronic machines at issue in this case are said to provide only an entertaining means of revealing the results of an electronic bingo game conducted in the inner workings of a computer server. These similarities compel the conclusion that the electronic bingo games at issue in this case constitute illegal slot machines under Alabama law," Smith wrote.

Riley's office said Smith's statement that the bingo machines were illegal slot machines should serve as a warning to communities seeking to legalize electronic bingo.

"Organized gambling interests are approaching communities throughout the state trying to entice them into passing ordinances that allow so-called 'electronic bingo.' Well, every mayor and city council member should first read the judge's ruling. It exposes the fact that casino bosses, not charities, are operating so-called bingo halls in Alabama," Riley said.

Smith went on to say in his written opinion, however, his ruling would not determine whether or not "electronic machines constitute bingo" because the Triana facility was in violation of Amendment 387 definitively and his court had no cause to determine if the electronic machines in the specific case constituted bingo.

Smith did note in his written opinion that his court did not render a judgment on the legality of electronic bingo machines.