The Texas Bingo Act

A 5th Circuit judge ruled that Texas is not violating the right to free speech by restricting proceeds from bingo to be spent on political advocacy. The Texas Bingo Enabling Act allows for an exception to the gambling laws of the state that allows eligible charities to host bingo games in order to raise money for their charities. However, this Act does not allow these charities to use the money raised from their bingo games to be spent on politics including campaigning against or for ballot issues and lobbying.

The Texas Bingo Case

In 2011, a complaint was lodged against the Texas Lottery Commission by a group of charities that included the Institute for Disability Access, multiple Redmen tribes, the Veterans of Foreign Wars, Amvets Post #52 and several Elk Lodges. These charities argued that the ban on contributing to political activities was a violation of their 1st Amendment rights. In Austin, a federal judge gave a summary judgment ruling in favor of these groups and granted a permanent ruling that blocked the enforcement of this ban in the Act. However, a federal appeals court in New Orleans reversed this ruling and said this case was different from the ruling in the U.S. Supreme Court case Citizens United v. Federal Election Committee.

Judge Harold Demoss Jr., speaking for a panel of 3 judges said that the ban on contributing to political activity in this Act is within the power of the government – the government can sponsor some activities to the barring of others and thus does not violate the right to free speech. He goes on to say that this case is different from the Citizens United case because Citizens United involved a case against a federal law that prohibits corporations from spending money for speech that relates to a federal election. Judge Demoss said that Texas did not restrict speech within the context of a government subsidy as in the Citizens United case.

The Texas Bingo Act Ruling

In the Texas case, the government of Texas started a subsidy program that allows charities to raise funds for their foundations and because they are participating in this program, the state requires that the funds are not used in political activities. The ruling states that this ban does not restrict political or free speech it just says that the state will not subsidize this type of activity. The panel agreed that the government of Texas did make a subsidy program that is based on a licensing rather than tax exemptions or cash payments. Judge Demoss said that by the creation of this Act, the state of Texas allowed a limited exception to the ban on gambling by enabling charities to hold bingo games, with no competition, to generate extra revenue for their foundations.

He says that just because this supplemental revenue is available through licensing rather than tax exemptions or cash payments does not change the fact that this program is a government subsidy for charities that participate. The panel said they do not believe that there is a constitutional violation by allowing this Act to be enforced if the state holds these bingo games and then gives the money to charities. The ban in this Act was therefore ruled that it did not restrict free speech outside of the bingo program. Charities are still allowed to hold bingo games and be involved in political activity but the Act simply restricts the use of bingo proceeds to fund these political activities.