SACRAMENTO – Looking to energize fundraising, charities have called on lawmakers for permission to move beyond traditional bake sales and bingo to capitalize on a poker craze fed by Texas hold'em on television and the ancient Chinese game of Pai Gow.

Trading in chocolate chips for poker chips is proving difficult, however. Nonprofits have balked at tough limits proposed by state regulators, but powerful card club interests are demanding those restrictions to protect their turf. Companies that contract to run casino nights for a cut of the donations are angry and anti-gambling interests want lawmakers to simply fold the games.

Meanwhile, the Attorney General's office has signaled that it may have no choice but to crack down on nonprofits if the Legislature fails to change the law. Many groups continue to sponsor poker nights and casino-themed fundraisers despite warnings.

"We do not want to be put in the position to have to shut these things down," said Bob Lytle, director of the state's gambling control division. "We believe they should have the opportunity to exist as a fundraising tool."

Under this pressure, lawmakers are working to craft a compromise measure but have yet to appease all interests. The latest attempt, Assembly Bill 839, is stalled in the Senate Governmental Organization Committee.

Assemblyman Alberto Torrico, a Fremont Democrat carrying the bill, said charities are being financially squeezed at the same time the need has grown.

"Nonprofits have been asked to do more and more," he said.

While charities are held up as the obvious beneficiary, the underlying battle appears to be between the card clubs and casino night party organizers. Both have much to lose, depending on the end product.

"Card clubs were concerned we were going to run them out of business, Torrico said.

The measure would authorize so-called controlled games, such as poker and Pai Gow, a Chinese form of poker that can be played with either cards or tiles. Roulette, craps and other table games remain prohibited.

The measure includes a multitude of rules, including:

-  Nonprofits could offer just one poker night a year.

-  Only four casino nights could be held in one place per year, except in rural areas with few venues.

-  The pot must be paid out in prizes – no cash. No player could win prizes worth more than $500, and the total payout for the night cannot exceed $5,000 in value.

-  To pre-empt all-nighters, the event would have to shut down after five hours.

-  Nonprofits must be in existence for at least three years and pay $100 in licensing fees annually.

-  At lease $9 of every $10 must go directly to the nonprofit, limiting the operator's profits to 10 percent.

"We see this as a way to broker some sort of peace, said Matthew Campbell, a deputy attorney general. Attorney General Bill Lockyer is sponsoring the measure.

Under existing law, the games can be played only in licensed card clubs and Indian casinos.

Many key card room interests, after winning significant concessions, have agreed not to oppose the measure. A prominent tribal attorney said Indian casino operators will stay on the sideline.

Gambling foes are lobbying to block the measure.

"If this is supposed to help organizations that help society, you have to wonder do the ends justify the means," said Fred Jones, an attorney who represents the California Coalition Against Gambling Expansion.

Jones argued that the measure is just the first ante for nonprofits to gain a foothold. Left unchallenged, any nonprofit eventually will be free to move into roulette, blackjack or other games. Some of those that qualify as state-sanctioned nonprofit organizations include civic groups, fraternities and trade unions, he warned.

"The whole gambling culture has totally taken over California in the last decade," Jones said.

Brian Simuro, president of the Cops Care Cancer Foundation formed to help families, said organizations are desperate to find unique ways to draw attendance and boost giving.

"Many organizations struggle to raise money and they're all kind of fighting for the same dime," he said. "Historically, there hasn't been a lot of diversity in fundraising efforts of these individual organizations. From a marketing standpoint that kind of makes it very difficult to maximize attendance and overall support."

Senators on Wednesday appeared to support the goal, but wondered why it was so restrictive.

"In my mind you have a diamond in a dung hill," Sen. Tom McClintock, R-Northridge, told Torrico.

McClintock, who argued for a blanket approval of poker nights with no restrictions, said "If people want to do it and they're not hurting anybody else, what business is it of government's?"

Torrico countered that he had to agree to some limits, otherwise gaming interests would have killed the bill in the Assembly.

Nonprofits say they can live with some rules, but objected to restrictions on the number of events per year and feel it may be impossible to comply with a strict accounting of the amount wagered and won because games are not an exchange of money.

"It's overkill," said Kenneth Larsen, director of public policy for the California Association of Nonprofits.

Those who run poker nights for charity feel threatened, saying they have been sold out to appease card clubs. They point out most games involve play money for everyday prizes that can be won at store raffles.

"It's pretend. It's imagination. It's fun," said Donna Maddern, who has a business in Modesto.

Jim Yates, who operates games in Encinitas, called it "faux gambling."

Competition from a proliferation of Indian casinos has sapped attendance at bingo parlors, depressing revenues, say some nonprofit interests. But some tribes maintain they are generous contributors to community causes that makes up for any loss.

"Most tribes would like to see nonprofits thrive," said noted tribal attorney Howard Dickstein.

Dickstein said tribes have little interest in the legislation because 90 percent of their casino dollars is generated by slots and games that would remain barred from charity events.

Some nonprofits, he said, "have been hurt by by the proliferation of gaming and this would be a reasonable way to redress that."

The measure passed the Assembly earlier on a mostly party-line 56-14 vote. South Bay Democrats Ted Lieu of Torrance, Jerome Horton of Inglewood, Jenny Oropeza of Carson and Betty Karnette of Long Beach supported the bill.

(For more information on the measure, go to www.legislature.ca.gov/ and type in 839 in the bill search field.)