Bingo Bob’s Bonanza In Alabama

Alabama’s electronic bingo operators may have been too successful for their own good. For his first six years in office, Gov. Bob Riley (R) grudgingly tolerated their existence. During that time, what was mostly a score or more of small, storefront Class II gambling parlors grew into a significant gray-market industry.

The very existence of e-bingo halls in a state where slot machines are strictly forbidden was an outgrowth of the Cotton State’s balkanized legal apparatus. E-bingo, in essence, was illegal in Alabama … except where it wasn’t. A crazy-quilt of county constitutions contradicts—and supersedes, according to e-bingo supporters—the state constitution. Starting in 1980, at least 16 county constitutions were amended to permit non-charitable bingo. With the passage of the Indian Gaming Regulatory Act in 1988, the Poarch Band of Creek Indians also got into the Class II act, and today the tribe owns three gambling houses.

Thanks to their convenience for Alabamians and Floridians, e-bingo parlors grew into a thriving business. By 2009, the VictoryLand racino had grown to 6,400 networked machines—three times as many devices as Beau Rivage, making it the United States’ sixth-largest casino. It built a 300-room hotel, the Oasis, to accommodate some of its 12,000-plus customers per day.

Close on VictoryLand’s heels was Country Crossing, an $87 million bingo hall that opened late last year. (A third major facility, White Hall Entertainment Center, remains unfinished.) The sheer scale of the burgeoning industry seems to have impelled Riley to move against it, starting in early 2009—roughly the same time the Department of Justice began to take an interest in the matter.

Riley’s office cobbled together county-specific rulings from several judges, one of whom opined, “To simply drop money in an electronic machine, push a button to start the game, and passively stare at the machine for six seconds to see if you’ve won anything is not the game commonly known as bingo.’ ”

From these opinions, Riley extrapolated that e-bingo machines were really Class III devices and, therefore, illegal. “Any community out there being enticed by organized gambling to bring in casinos and slot machines ought to take a close look at the law and these recent rulings,” he told The Birmingham News. “The law is clear. Only organized gambling and their allies will tell you otherwise.”

Riley formed an armed posse, which he dispatched on a series of dawn raids upon bingo parlors. This crusade would earn him the sobriquet “Bingo Bob.”

Faced with the loss of thousands of jobs, employees held protests but to no avail. Some operators sought midnight restraining orders from local judges to prevent wee-hours smash-and-grab raids on their bingo operations. Country Crossing owner Ronnie Gilley offered to make himself a test case. “If that’s what it takes to get this before a jury of my peers, by all means arrest me,” he told MSNBC. “Tell them to come put the cuffs on me.”

He’d get his wish sooner than he thought.

The crackdown itself was not a flawless operation. In January, task force chief David Barber was tailed by a VictoryLand operative to a Mississippi tribal casino, where he was seen winning $2,300. Barber resigned and Mobile County District Attorney John Tyson Jr. took his place.

Another impasse was reached in mid-March when state Attorney General Troy King challenged Riley’s authority to direct the task force. He was able to halt its operations for two months, when the state Supreme Court gave Tyson the go-ahead to resume raiding (which has grossed the state at least $1.3 million in seized monies).

Rather than forfeit its assets, Country Crossing closed shortly after it opened. The Greenetrack racino, after six and a half years as a bingo parlor, shut down last July. Following a brief closure in March, VictoryLand went permanently dark in August.

Riley was even gunning for the Poarch Band’s gambling hall, with Tyson telling the Mobile Press-Register, “They’re in play.” To which the National Indian Gaming Commission replied, in effect, “No, they’re not,” frustrating Riley’s attempted putsch. The governor has made it clear that he will interdict any attempts by the tribe to set up shop off reservation land.

On Oct. 4, less than a fortnight after Gilley’s MSNBC boasts, federal prosecutors called his bluff. They unsealed indictments against Gilley and 10 others who found themselves deeply implicated in a bribery scandal.

A handcuff-wearing Gilley and his co-defendants were brought before a judge in Montgomery to hear the charges read. During the 2009 and 2010 legislative sessions, bingo backers had tried—and failed—to pass laws that would have legalized e-bingo (as defined under IGRA) on a statewide basis.

Huntsville Times columnist Mike Hollis criticized the most recent of these as “an incredibly lucrative” monopoly for Gilley, VictoryLand owner Milton McGregor and a few others who would be grandfathered in. Hollis also faulted the bill draft for restricting e-bingo—and job opportunities—to six counties and for requiring a $100 million minimum capital investment that would squeeze out small operators. Riley simply called the “Sweet Home Alabama” bill “corrupt.” He may have been more accurate than he knew.

According to Washington prosecutors, the methods of persuasion bingo boosters deployed were not only unsuccessful … they were illegal. Named in the 65-page bill of particulars were Gilley and McGregor, as well as a trio of lobbyists and a quartet of state senators. Another lobbyist, Jennifer Pouncy, had already pled out to making a $2 million bribe offer to state Sen. James Preuitt. According to Pouncy, state Sen. Larry Means came much cheaper, asking for $100,000 to help juice the most recent pro-bingo bill through the legislature.

Means’ colleague, Quinton Ross Jr., despite “no longer feeling the love” of Gilley and of Pouncy’s boss, lobbyist Jarrod Massey, supposedly demanded no more than $10,000—but ultimately received double that amount. Prueitt’s alleged payoff was particularly extravagant, including the provision of country and Western artists for his campaign events and the arranged purchase of cars from his dealership.

Federal prosecutors accuse Gilley, Massey and nine others of bribery, honest-services fraud, conspiracy, mail fraud, wire fraud, money laundering, extortion and more. The charges are predicated on months of wiretaps, in a probe dating back to February 2009. Even lawmakers not indicted came out looking badly, particularly state Sen. Roger Bedford, who was recorded threatening retaliation on e-bingo opponents in no uncertain terms, saying, “If you f*ckers f*ck us on this … We’re coming after your a**.”

Riley couldn’t resist taking a victory lap, sending a spokesman out to decry the “corrupting influence” of gambling—even though the only major public-corruption scandal involving casino operators had taken place on his watch. Riley himself is term limited from seeking re-election this year, but the scandal could tip the balance of power in the Alabama Legislature to the GOP for the first time in more than 135 years. Jess Brown, professor of political science at Athens State University told the Montgomery Advertiser the indictments were “an early Christmas present to Republicans.”

Indeed, supporters of the Democratic gubernatorial candidate, Agriculture Commissioner Ron Sparks (an e-bingo supporter) claimed that the timing of the indictments was politically motivated. However, with Sparks already 17 points behind in the polls when the indictments were unsealed, a bingo scandal was the least of his problems.

Republican candidate—and prohibitive favorite—Robert Bentley had won his party’s nod partly on a promise to put the question of legalizing e-bingo to a vote of the people. Although he’s the indirect beneficiary of campaign contributions from Harrah’s Entertainment and International Game Technology, Bentley has used the scandal as an opportunity to reiterate his personal opposition to gambling.

IGT was already one of the biggest losers in the bingo brouhaha, having sunk millions of dollars’ worth of equipment into Cotton State bingo parlors. The company took a $53 million write-off on its Alabama investment during the second quarter, negating three months’ earnings.

It could have been worse. Riley’s office had rung up the Nevada Gaming Control Board, attempting to discourage Nevada manufacturers from delivering 1,700 Class II devices to Alabama. A Riley underling even threatened to have the shipments interdicted, though no such Prohibition-style roadblocks took place.

As for Riley, his hands may not be entirely clean. According to the Senate Committee on Indian Affairs, his 2002 gubernatorial bid was funded in part with money from the Mississippi Band of Choctaw Indians, casino owners themselves who were not eager to see competition arising from Alabama.

Convicted felon Jack Abramoff bragged of funneling $13 million in Choctaw money to Riley’s campaign, with the tribe entrusting another $14.5 million to Abramoff’s co-conspirator, Michael Scanlon—Riley’s former congressional press secretary, who himself gave $500,000 to Riley, routed through a pair of PACs. In December 2002, Scanlon e-mailed Abramoff that a tribal client “definitely wants Riley to shut down the Poarch Creek operation …”

Riley later has been touted as presidential timber. If so, he’s just in time to secure Abramoff’s fundraising services: “Casino Jack” is scheduled for release from a federal halfway house next month.