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Tuesday, May 28, 2024 | Back issues
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Bingo Money Can’t Fund Charity Politicking

(CN) - Texas does not squelch free speech by banning charities from spending their bingo proceeds on political advocacy, the 5th Circuit ruled.

The Texas Bingo Enabling Act creates an exception to the state's gambling ban by letting qualified charities hold bingo games to raise money for their charitable causes. But the act forbids such charities from using the money on political activities such as lobbying and campaigning for or against ballot measures.

In a 2011 complaint against the Texas Lottery Commission, a group of charities - including the Veterans of Foreign Wars, The Institute for Disability Access, several Redmen tribes, several Elks Lodges and Amvets Post 52 - said the ban violates their First Amendment rights.

A federal judge in Austin later granted summary judgment in their favor and issued a permanent injunction blocking the enforcement of the ban under the act.

But the New Orleans-based federal appeals court reversed Tuesday, drawing a distinction between this suit and the U.S. Supreme Court's ruling in Citizens United v. Federal Election Commission.

"We agree that the Bingo Act's political advocacy restrictions fall within government's power to subsidize some activities to the exclusion of others and therefore do not penalize political speech," Judge Harold Demoss Jr. wrote for a three-member panel. "This case is distinguishable from Citizens United in two key respects. Citizens United involved a challenge to a federal statute prohibiting corporations from making expenditures for speech relating to federal elections. Unlike this case, Citizens United did not involve speech restrictions in the context of a government subsidy."

In this case, Texas has created a subsidy program allowing charities to raise money for their causes. As a condition of participating, the state requires the money not be used for political advocacy.

"This requirement does not penalize political speech; it simply represents a decision by the state not to subsidize that activity," the 15-page opinion states.

The judges disagreed with the charities' argument that Texas did not create a subsidy program and that it is based on a licensing scheme instead of cash payments or tax exemptions.

Such arguments put "form over substance," according to the ruling.

"In creating the bingo program, the state established a narrow exception to the general ban on gambling allowing charities to conduct bingo games, free of competition, to generate extra income for their charitable causes," Demoss wrote. "That this supplemental income stream is accessible by way of a license, instead of cash payments or a tax exemption, does not change the fact that the bingo program constitutes a government subsidy for participating charities."

"We see no constitutional principle that would be served by allowing the challenged provisions if the state conducts the bingo games and then distributes the money to the charities, but disallowing the restrictions if the charities conduct the games themselves," he added.

The provisions in the act do nothing to restrict speech outside of the scope of the state's bingo program, according to the ruling.

Charities are still free to run bingo games and engage in political advocacy, but the law limits them from fund such advocacy with bingo proceeds.

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