Bingo jackpot in doubt | Arkansas Blog

Wednesday, February 7, 2007

Bingo jackpot in doubt

Posted By on Wed, Feb 7, 2007 at 12:54 PM

The wolves slavering at the legislature to figure out a way to carve a nice slice out of the envisioned pie of revenue from constitutionally authorized charitable bingo may be in for some tough sledding.

The attorney general's office issued an opinion on it today. It's not binding, of course. But it indicates it will be hard to figure out a way to funnel bingo receipts to people working for charitable organizations or to independent operators hired to run bingo games.

Wouldn't that be a shame?

The opinion summary is on the jump.



Opinion:  Do provisions of the recently adopted constitutional amendment allowing charitable bingo place any restrictions on what can be considered the "actual cost of conducting the game or raffle?"  For example, would it permit an authorized organization to consider such expenses as rent, bingo equipment, utilities, staffing and maintenance or to contract for any of these services?  Q2) Whether subsection (1) (b)(2) of the Amendment, which prohibits using bingo or raffle receipts to compensate in any way any person who works for or is in any way affiliated with the organization prohibits the use of receipts to pay for the types of expenses described above if incurred by an entity that is under contract to provide such services to the authorized organization?  For example, if an authorized organization has a cleaning contract with a local janitorial service, does such contract mean that the janitorial service is "affiliated with" the organization?  

RESPONSE:  1) Yes, the Amendment places restrictions on what can be considered the actual cost of conducting the game or raffle.  The phrase "actual cost" is itself a restriction on the type of items of expenditure that may be included.  Such phrases  are ultimately subject to interpretation by the judicial branch.  In addition, the prohibition against using receipts to compensate any person who works for or is in any way affiliated with the charitable organization is a limitation.  Any such payments or compensation cannot be deemed to be "actual costs."   2) In response to the second question, it must be noted as an initial matter that the amendment only allows the authorized organizations to "conduct" the game or raffle.  Any expenses to pay a person or entity other than the authorized organization to "conduct" the activity cannot be considered an "actual cost" and cannot be paid from the  receipts of the game or raffle, whether through contractual arrangements or otherwise. Such arrangements are therefore prohibited without reference to the "affiliated with" proscription, although that proscription may also prohibit the activity.  Other types of contractual  arrangements (that do not involve "conducting" the game or raffle), may or may not be permissible under the "affiliated with" proscription, depending upon the facts.  The General Assembly or appropriate regulatory agency may have some authority to define the  permissible scope of such contracts.  Neither may transgress the language of the Arkansas Constitution.

Author:  Elana C. Wills


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