Over at Jackson Jambalaya, Kingfish recently posted a series of stories regarding two Mississippi charitable bingo operations that appear to have been playing a bit fast-and-loose with their “charitable” proceeds. The two charities involved are the Fine Arts Institute of Mississippi (FAIM) and the Union Center/Theo Volunteer Fire Department. You can view Kingfish’s FAIM posts here, here and here. The Union Center post is here.
Secretary of State Delbert Hoseman recently shut down both of these charities. As with most charitable gaming cases, these organizations violated the law by funneling money to persons or entities other than the charities they were supposed to benefit. In addition, these groups misled the Mississippi Gaming Commission by laundering funds to disguise their true use, and/or filed false official reports to mislead the Commission as to the recipient of the proceeds.
Many charitable bingo operators take the stance that gaming regulations are an inconsequential administrative matter. The prevailing attitude is that cases like this are nothing more than a glorified, non-criminal traffic ticket. Just pay the fine, reimburse the charity, and move on. Nothing to see here.
What these folks fail to realize is that the violation of “mere” administrative gaming regulations also violates federal criminal statutes of the felony type. Under 18 U.S.C. Section 1955, it is a violation of federal law for any person to conduct an “illegal gambling business.” And just what is an illegal gambling business? According to Section 1955(b)(1), an “illegal gambling business” is a gambling business which
(iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.
It looks like both FAIM and Union Center meet each of these elements.
A violation of 18 U.S.C. 1955 carries a maximum sentence of five (5) years in federal prison. Definitely not a glorified traffic ticket.
And lest anyone think the Government won’t go after a charitable bingo operator under this statute, take a look at United States v. Shelton, 337 F.3d 529 (5th Cir. 2003).