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Lottery Commission Knows About Game Rooms But Doesn’t Shut Them Down

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(credit: KTVT/KTXA) Mireya Villarreal
A native Texan, Mireya was born and raised in the Rio Grande Val...
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NORTH TEXAS (CBS 11 NEWS) – New reports uncovered by the CBS 11 I-Team show that the Texas Lottery Commission has known for years that their bingo halls play host to potentially illegal gambling. Game rooms, slot machines, 8-liners, sweepstakes systems – all uncovered by state investigators but rarely shut down and rarely reported to police.

For months the CBS 11 I-Team has been investigating charity bingo after several non-profit groups reached out to us for help. In Texas, charity bingo is regulated by the Lottery Commission and is supposed to generate funds for non-profit groups around the state. But the I-Team has uncovered that doesn’t always happen.

While our crew was undercover, they discovered several bingo halls in Dallas and Richardson had created game rooms where players could win cash while playing on computers that looked like 8-liners or slot machines.

Undercover Cam:

Mireya Villarreal, I-Team Reporter: “I know some places do prizes and some places do cash.”
Jupiter Bingo Hall Employee: “We pay cash.”
Mireya Villarreal, I-Team Reporter: “Okay. Cool.”

The computers looked like slot machines, paid players just like slot machines, and some employees even referred to them as slot machines. But the man who operates Jupiter Bingo in Richardson, and three other halls in Dallas, said the game room is a sweepstakes system.

“The back room is a sweepstakes room,” Larry Whittington told us. “The sweepstakes room is predicated just like a McDonald’s sweepstakes.”

Larry Whittington says a company called Tejas Promotions runs his sweepstakes system. Richard Schappel owns the company. The I-Team confirmed Schappel plead guilty to gambling charges in 2008 and 2010 out of San Antonio. Schappel and his attorney wouldn’t talk on camera, but claim if the sweepstakes software is used correctly it does not violate Texas law.

“And the lottery commission is aware that you have these?” Mireya Villarreal, I-Team reporter, asked Whittington.

“Oh yes,” Whittington stated. “Because most bingo halls have something similar to this in bingo halls. Because if they didn’t, they wouldn’t be around.”

Turns out – Larry Whittington is right. We found a 2012 report from one of his halls where an investigator discovered Whittington’s sweepstakes machines and documented it in his report.

In fact, the I-Team got a hold of several reports where investigators uncovered game rooms paying out cash inside bingo halls. The reports were exclusive to the North Texas area and were filed from 2010 through present day.

The investigations often started when a player, neighbor or bingo hall employee filed a complaint. Once the investigator was done, the case was closed, and then it was forwarded to the charity bingo administrators. In some of these cases, fines are still pending. But in almost every single case uncovered by the CBS 11 I-Team police were never notified by the Texas Lottery Commission, Charity Bingo administrators, or the original investigator.

“The proper place for anybody to take complaints about whether or not a machine inside a bingo hall is legal or illegal should be the county sheriff. They’re the ones that have the guns. We don’t have any guns,” Texas Lottery Commission Chairman Winston Krause explained.

Officials with the Texas Lottery Commission say there is no law that requires them to notify police, and Krause tells us they don’t have any plans to get any more involved than they already are.

“I mean we’re regulating bingo. And I don’t like the fact that anything illegal might be going on in a bingo hall. But at the same time, we don’t have the power, other than to jerk a license, to do anything about it,” Krause added.

All of the North Texas bingo halls where game rooms were discovered and documented by investigators are still open.

Several legislators tell us this is a problem and they are keeping a very close eye on charity bingo and our stories.

Tejas Promotions information from attorney Matthew Beatty:

Matthew Beatty is an Austin-based attorney representing Tejas Promotions. He clarified the sweepstakes system run by his client provides software that runs on various computer terminals. They claim to only lease the software system and not the computers. He couldn’t tell us how much his company makes versus the bingo hall or where the profits are reported.

Beatty also told CBS 11’s I-Team Reporter Mireya Villarreal that players are supposed to be given 100 free entries per day through the Tejas Promotion sweepstakes system; similar to other sweepstakes. When we explained that we were only offered free spins at one of four bingo halls, he said players could write in and request their free spins. But he didn’t have an address where players could make that request.

Beatty also told us that the sweepstakes system helps a local charity, but couldn’t tell us which one or how much money went to them.

(©2014 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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