Fundraising Worth Fighting For.
SB 1369 Places California’s Lottery in Financial Peril
SACRAMENTO, Sept. 8, 2008 - SB 1369, a measure passed by the Legislature and waiting for action by the Governor, launches a significant assault on the California State Lottery, one that further jeopardizes funding for our schools and the long-term viability of the troubled state lottery system, the California Charity Bingo Association announced today.
In addition to eliminating a popular and necessary fundraising tool that has raised millions for California charities, the passage of SB 1369 allows large, statewide charities to play a game called “remote caller bingo,” a format that links together various locations to allow more people to play for much larger prizes, creating a significant new competitor for lottery dollars.
Supporters of SB 1369 touted charities’ ability to offer “life altering” prizes in these games, and the bill allows players to potentially win hundreds of thousands of dollars more than the current $250 cap on both paper and electronic bingo games - all in a social atmosphere that the lottery can’t offer. By creating a large-scale game that will be offered in major metropolitan areas with “life altering” jackpots, SB 1369 creates an attractive alternative to the state lottery. In addition, California law stipulates that gaming tribes have the ability under their compacts to play any and all games allowed to others in the State.
The increased pressure placed on the Lottery by remote caller bingo has significant ramifications for California. The California Lottery is already one of the worst performing lotteries in the country and it has projected even lower revenue for FY 2009. The losses in revenue are projected to result in $94 million less revenue for California’s schools. Additional competition is certain to further reduce the lottery’s revenue at a time when the State is running a dramatic and continuous budget deficit and has no ability to replace these lost funds.
The threat to the lottery is also significant at a time when the State is considering selling the Lottery or using its revenue to securitize its assets as a means of closing California’s budget gap. Additional financial threats will do little to encourage investment in the Lottery and will further undermine California’s efforts to resolve the State’s ongoing budget crisis.
“Nobody is going to want to buy the California State Lottery after this,” Professor I. Nelson Rose, one of the Nation’s leading authorities on gambling law, said. “Indian casinos have already hurt sales, and now the Lottery will face new competition from large-prize linked bingo games.”
Many feel the damage to the lottery comes from the last minute nature of the bill, and the many shortcuts taken by the legislature in passing SB 1369, what is quickly becoming recognized as a significantly flawed proposal that has already been recognized for severely damaging the fundraising efforts of many deserving charities, and now threatens the California lottery.
“This legislation was thrown together at the last minute, in the dark of night and without a single hearing in the form it was passed. The more you look at this bill, the more problems you find,” Doug Bergman, the Executive Director of United Cerebral Palsy, Sacramento said. “We can do better than this. California simply cannot afford to decimate some of its most needy charities and the people that depend on them for their services and harm the lottery and California’s school children in the process. We ask all Californians to join us in calling on Governor Schwarzenegger to veto SB 1369.”
For more information on the California Charity Bingo Association, visit www.savecharitybingo.org. For news media interviews, contact Chris Holben at (916) 446-9900, or at cholben@rs-e.com.