Businessman describes alleged illegal charitable gambling operation

AKRON, Ohio (AP) - James H. Jackson was a big-time player in the charity gaming business, supplying instant bingo cards to more than 200 taverns statewide.

The cash pickups were so frequent that dollies were needed to move the boxes of money like those holding $3.6 million police found around Jackson's home in Tallmadge.

Until recently, the 64-year-old businessman denied charges that he and others made millions of untaxed money off the sale of instant bingo tickets, money raised in the name of charity. In a
surprising move Friday, he pleaded guilty to gambling, money laundering and racketeering charges.

Unlike some of the others, Jackson is talking about how the statewide schemes worked. Next month, he's expected to testify against co-defendant Philip F. George Jr. of Akron and reveal more
details of how gaming profits were allegedly diverted and pocketed.

His cooperation is in exchange for a lighter prison term.

The Ohio Supreme Court opened the floodgates for instant bingo in 1997 when it said it was OK for instant bingo cards to be sold in bars, so long as the state's charitable gaming laws were followed and the profits benefited a qualified charity.

Jackson became one of the many salesmen and took his bingo game boxes to bars, which sold the cards, paid out the winnings and turned over the remaining cash to the salesmen to give to the
distributor and the charity. Jackson said the sales reps would be paid a commission out of the charity's cut, usually 10 percent.

For example, a box of 2,200 tickets selling for $1 each would pay $1,841 to winners. The balance -- $359 -- would go to the designated charity, minus the 10 percent cut the salesman took as an expense to the charity.

Jackson said greed grew among his fellow salesmen no longer content with a 10 percent commission.

To get and keep the bars and outlets as customers, he said the salesmen began dropping off two boxes of bingo tickets -- one to raise money for the charity, and the profits from the other to be split between the bar owner and salesmen.

Increasingly, more boxes benefited the bar owners and salesmen than a charity, he said.

Instant bingo outlets then began opening up everywhere. Inside ticket stores, where workers were supposed to be volunteering for the charity, Jackson claims separate gaming boxes existed -- some for the charity, some for the salesmen and others to pay the "volunteers."

As time passed, slot machines appeared. Authorities say the machines are illegal; defense attorneys say they are an electronic version of instant bingo. A new law that goes into effect in April is supposed to ban all electronic gaming devices.

Jackson said the machines were putting many ticket salesmen, like himself, almost out of business. Gamblers liked the one-armed bandits over the cardboard pull-tab bingo cards.

Bogus charities began sprouting up when legitimate charities started selling their name to bars and ticket salesmen in return for a flat fee -- perhaps $500 a month, Jackson said.

"It became tough to hold your accounts. Very tough. Just because more and more people were involved," Jackson said. "Some of these guys would just drive the street, see a church and say, 'That name sounds good, let's use it.'"

The state alleges that in 1998 Jackson and George created a charity for disabled children, along with businessman Richard Jebber. Prosecutors said Jackson and George sold instant bingo tickets in the name of Child Care Foundation to taverns and storefronts and pocketed the profits.

In all, prosecutors contend they diverted $60 million into private hands.

Wendy Buckhalter, an owner of A & R, an instant ticket distributing company in Cleveland, said she is aware that Jackson is talking to authorities.

"He's lying," she said. "It's all untrue."

(Copyright 2003 by The Associated Press. All Rights Reserved.)