Bingo Bonanza 

Charitable bingo is supposed to be a way for nonprofit groups to raise money. So why is all the big money being made by profit-oriented entrepreneurs?

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The East Bay hosts four of the state's largest charitable bingo parlors, Bingo Arcade in Pleasant Hill, Gilman Street in Berkeley, and two located about a mile from one another in East Oakland, at the Foothill Square and Durant Square Shopping Centers.

At Casteel's Foothill Square's parlor, Breast Cancer Development and Research Society rents out the parlor five nights a week and Kids Educational Development Scholarships rents it out the other two. Besides sharing parlor space and a few security guards, KEDS representatives insist that the two nonprofits are unrelated. At Durant Square, a nonprofit called Community Charities rents out the parlor space seven nights a week. Combined, those two parlors see annual revenues of more than $15 million, according to city reports.

Not far from the parlors at Durant and Foothill, the East Oakland Senior Center runs the only Oakland bingo operation that doesn't use electronic equipment and doesn't operate out of a parlor. Director Leroy Slaughter said his center doesn't even try to compete with the larger parlors. Even though he knows his center could make big money if it really wanted to, he said the center's bingo committee decided that bigger games with larger stakes might draw a "bad crowd." Instead, they choose to run games once a week in the middle of the afternoon, which keeps their crowd limited to around fifty players a week, 95 percent of whom are seniors living in the building.

Slaughter says most of the seniors living there couldn't afford to pay for higher-stakes games. "I think that the seniors play here because even if they lose, they know that they'll see their money later," Slaughter said. That's because all of the proceeds go directly back into the center to pay for organized activities, which include occasional field trips to museums, flea markets, and other nearby attractions. "The city doesn't give us any money for activities," he said. "So we have to raise all of our own funds if we want to organize anything." But the games themselves are only partially for fundraising. "We run games mostly as entertainment," he said.

Because the center doesn't have to pay rent, most of its overhead goes to supplies. According to its monthly report to the city, in June it made $4,002 total, paid out $3,160 in prizes, and spent $638.29 on "miscellaneous" expenses like security and supplies. Their total profit for the month came out to $203.46, which means roughly $2,240 for the whole year. (It doesn't operate in August.)

Ulysses Cooperwood, who manages Berkeley's Gilman Street bingo parlor for the nonprofit Phyliss Elena Parker Foundation, says bingo is a high-expense activity. The parlor where he runs games is small compared to Oakland's giants, but he said he still pays rent of about $2,000 a night. And because his games have already built up a reputation at that location, they can't just get up and move somewhere else. Mary Parker, who used to work at Gilman Street Bingo but now runs the Parker Foundation, said competition from other parlors and Indian casinos has led to tough times in her industry. "Bingo is not that good right now," she said in a recent phone interview. "A lot of organizations have pulled out."

Differences between city bingo ordinances probably account for why some cities have parlors and others don't. For instance, Alameda's municipal code prohibits the lease or rental of any gaming equipment. Such equipment comes in the form of both paper supplies, like bingo cards, and electronic equipment, like hand-held devices that can keep track of hundreds of cards simultaneously. These days, a bingo parlor without electronic equipment just can't compete with the big parlors, which is probably why Alameda boasts just one tiny bingo game, at a senior center. This regulation also prohibits the arrangement that some parlors use to get around the ban on paying employees. For instance, Chester Piet revealed in the Vallejo lawsuit that he received wages directly from the manufacturers who sold supplies to Casteel.

But if bingo is not that good for small operators, it's still very good for the big parlors. According to a report from the City of Oakland, the two charities operating at Foothill Square — Kids Educational Development Scholarships and Breast Cancer Development and Research Society — paid Casteel's Cornucopia Ventures a combined total of nearly $70,000 a month in 2006, which far exceeds the state's $2,000 a month overhead limit. According to city records, this came out to $2.79 per square foot. Meanwhile, city records showed that Casteel himself was only paying $.95 cents a square foot for the property.

The charity operating at the Durant Square bingo parlor, Community Charities, paid nearly $50,000 per month, almost twenty five times the legal limit. Durant Square property representative, Roger Huddlestone, said his company charges $3 per square foot per month for the space at Durant Square, which is on par with fair market value. "Keep in mind that this is a full-service facility. That means we pay for cleaning, utilities, water, the alarm system, equipment, chairs, tables, phone bills, and more," said Huddlestone. But Linda Braz, Director and Senior Project Consultant for Metrovation Brokerage, a commercial real estate firm in Oakland, said that anything above $2.50 per square foot per month for retail property in East Oakland is unreasonably high. "We're looking right now at trying to get $2.25 per square foot in Old Oakland, which is a much nicer piece of property," she said.

The high cost of rent may explain why Community Charities donated a mere 2.7 percent of its $5.4 million revenue in 2007, according to tax forms. Some of its donations have gone to Oakland's schools, but over the past two years, a large chunk went to two main groups: the Oakland Police Activities League ($108,500), and a group called Bay Area Charities ($15,600).

Bay Area Charities does not have a web site or phone number, but public records indicate that the nonprofit is located at the same Pleasanton address as Bay Area Commercial, Inc., which is the real estate company that leases the parlor for Community Charities. Roger Huddlestone, representative for Bay Area Charities and Bay Area Commercial, says Bay Area Charities went defunct two years ago and has not been getting money from Community Charities. However, the group's tax forms indicate that it gave more than $15,000 to Bay Area Charities in the past two years. H. Clyde Long, a lawyer for Community Charities, said to his knowledge the charity still exists.


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