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A Slot By Any Other Name

14 January 2003

by Rod Smith

A famous television commercial once asked viewers: "Is it live, or is it Memorex?"

A similar question is about to echo around the gaming industry: "Is it bingo, or is it a slot machine?"

"There's a new casino competitor coming to America, and it's called 'bingosino,' " said I. Nelson Rose, gaming law expert at Whittier Law School in Los Angeles.

Bingo is already being played on video screens, but these gaming devices are becoming virtually indistinguishable from video slots, he said.

"(They soon) will be joined by other machines and fast-action table games, giving bingo halls, especially those on Indian land, the look and feel of real casinos," Rose said. "Every state which only allows bingo and does not have compacts for casinos, like Texas, and states where the compacts put a limit on the number of slot machines, like California, are affected."

Las Vegas professor and casino industry expert Bill Thompson said: "To have a machine and say it's not a slot is to go back to step one, unregulated Indian gaming, or, in this case, self-regulated which is the same thing."

States that clearly would be affected include Texas, Oklahoma, Alabama and Florida, where bingo is legal but Indian compacts are banned, he said.

"Also Massachusetts, but they'd have to do it on Martha's Vineyard since it has to be on a reservation," Thompson said.

In other states, he said, Indian tribes could decide "to tear up compacts and say to heck with agreements that give states revenues," he said.

But it also could have a major effect on competition from California, Thompson said, because unlike the compacts which limit the number of gaming machines, bingo parlors don't have any limits on the number of seats.

"So, wow, you could have 5,000 machines every time your turn around," he said.

Rose said tribes might also be motivated to give up true slot machines in favor of bingosino machines because they would not have to reveal any information about its gaming to regulators or gaming tax authorities.

Basically, the National Indian Gaming Commission issued new regulations July 17, redefining what is allowed in the way of "electronic aids," Rose said.

It may not have been the intent of regulators, but they authorized tribes, without compacts, to have unlimited numbers of bingo slot machines, he said.

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

There are also a couple of other companies and a number of tribes where these machines are becoming very big sources of revenue, he said.

"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," Rose said.

Under the Indian gaming law, however, a tribe may operate any game which is Class II, without needing permission from the tribe's state.

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, Rose said.

Class III gaming includes the most profitable 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 a compact with the state where the tribe is located. The state has to sign the compact only if state law permits that form of gambling.

It is difficult to get Class III games, particularly slot machines, legally onto tribal land, since most states don't have gaming devices, and don't want untaxed tribal casinos within their borders, Rose said. Putting slot machines onto a reservation without a compact is a felony.

Still, the Indian gaming commission, recognizing a number of court decision ruling bingo legal on reservations, recently rewrote its regulations to allow bingo in virtually any form.

Even some house-banked games are allowed, under some conditions, he said.

One provision of the new regulations may take bingo the final step to becoming a slot machine game. In its commentary accompanying the new rules, the Indian gaming commission said that, "A manual component to the game is not necessary," Rose said.

"Bingo players do not have to call out, 'Bingo!' or even press a 'Win' button," he said. "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."

At UNLV, Thompson said: "If it's an actual ruling of the Indian gaming commission, there's authority there. It's not at all hypothetical and the ripple effects could be tremendous.

"The only remedy would be congressional action, and now. It'd be a lot easier to deal with than after there are thousands of (bingosino) machines out there," he said.

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