SC Administrative Law Court Decisions

This matter comes before me as a contested case pursuant to S.C. Code Ann. §§ 1-23-310, et seq. (1986 and Supp. 1994) upon Respondents' request for a hearing following being cited by the South Carolina Department of Revenue and Taxation (hereinafter referred to as "DOR") for various administrative violations of the Bingo Act allegedly occurring on or about January 13, 1995. DOR seeks revocation of the bingo license and promoter's license and imposition of fines totalling Three Thousand Dollars ($3,000). Respondents deny the violations occurred and seek dismissal of the case. A hearing was conducted on September 5, 1995, and November 8, 1995. DOR failed to prove a violation of S.C. Code Ann. § 12-21-3410(A)(1) (Supp. 1994), and charges of violations of §§ 12-21-3410(A)(3) and 12-21-3420(4) (Supp. 1994) are dismissed. Respondents did commit violations of S.C. Code Ann. §§ 12-21-3410(4) and

12-21-3440(A)(2) (Supp. 1994). As penalty for the two violations, Respondents are ordered to pay DOR fines totalling One Thousand Three Hundred Dollars ($1,300).

FINDINGS OF FACT

By clear and convincing evidence, I find:

(1) Notice of the time, place, date, and subject matter of the contested case hearing was given to all parties.

(2) Evangelism Outreach, Inc. is a non-profit corporation and holder of a CLASS B bingo license. Its President is Watson Keefe.

(3) Evangelism Outreach, Inc. has held a bingo license for approximately fifteen (15) years.

(4) Pat Thomason is under contract with Evangelism Outreach, Inc. as the promoter of its bingo operation.

(5) Pat Thomason has been a bingo promoter for approximately seventeen (17) years and has been affiliated with Evangelism Outreach, Inc. for the last fifteen (15) years.

(6) Respondents conduct a bingo operation known as Bingo City, at Country Plaza, Highway 29, Greer, South Carolina, on Thursdays, Fridays, and Saturdays.

(7) Respondents conducted a bingo session on Friday, January 13, 1995, at Bingo City.

(8) Neither Pat Thomason nor Watson Keefe were present at Bingo City during the session on January 13, 1995.

(9) On January 13, 1995, Revenue Officers Melissa Adcox and Susan Tyndal entered Bingo City undercover as regular customers and participated in the bingo session held that night.

(10) After each game was completed, management announced the prize amounts awarded. Revenue Officer Adcox kept a written tally of the prize amounts as they were announced.

(11) The announced prize money totalled Nine Thousand Six Hundred Seventy-five Dollars ($9,675) for the January 13, 1995 session at Bingo City.

(12) Cards or coupons were awarded to some patrons which allowed the patrons to play free games of bingo.

(13) The coupons awarded were "Bingo Bucks," which were redeemable as cash for an amount certain value indicated on the face of the coupon for any items sold at Bingo City, including game cards.

(14) A game called "Speedball" was played at Bingo City on January 13, 1995.

(15) Speedball is a bingo game in which the caller quickly draws numbered balls from the cage and rapidly calls the drawn numbers out to the players. The caller then places the balls in a tray at the caller's table. All displays visible to players are turned off so that players must rely upon listening and memory skills to react to the numbers called.

(16) Revenue Officers Adcox and Tyndal testified that they observed Respondents' employees selling game cards after games had started.

(17) After the bingo session on January 13, 1995, Revenue Officers Adcox and Tyndal issued a Violation Report (Respondent's Exhibit #1) citing Respondents with the following violations of the Bingo Act:

(18) DOR admits that § 12-21-3410(3) was mistakenly cited in the Violation Report charges. DOR claims that the charge for selling cards after the commencement of a game should have been cited as a violation of § 12-21-3420(4). The Violation Report was never amended nor was an additional Violation Report ever issued charging Respondents with a violation of

§ 12-21-3420(4). DOR did allege a violation of § 12-21-3420(4) in the Agency Transmittal Form and Prehearing Statement filed with the Administrative Law Judge.

(19) Respondents previously paid fines for violations of the Bingo Act in 1992 and 1994.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude as a matter of law:

(1) This Court has subject matter jurisdiction of this case pursuant to S.C. Code Ann. §1-23-600(E) (Supp. 1994).

(2) In an administrative violation case in which the subject of the proceeding contains elements that could constitute a crime, the violation must be established by the standard of proof of clear and convincing evidence. Anonymous (M-156-90) v. State Board of Medical Examiners, South Carolina Court of Appeals Op. # 2417 (filed November 13, 1995).

(3) In South Carolina, the game of bingo is authorized to be conducted and played and regulated by the Bingo Act, S.C. Code Ann. §§ 12-21-3310, et seq. (Supp. 1994).

(4) A violation of S.C. Code Ann. § 12-21-3410 or 3420 (Supp. 1994) of the Bingo Act may constitute the operation of a lottery and/or gambling, which is a criminal act pursuant to S.C. Const., art. XVII, § 7 (1976) and S.C. Code Ann. §§ 16-19-10, et seq. (1976 & Supp. 1994).

(5) Pursuant to the Bingo Act, the game of bingo must be conducted only by a nonprofit organization and promoter under contract with the nonprofit organization, both of which must be licensed by the State.

(6) Evangelism Outreach, Inc. is a nonprofit corporation and holder of a CLASS B bingo license.

(7) Pat Thomason is a licensed promoter under contract with Evangelism Outreach, Inc., authorized to manage, operate, and conduct the game of bingo on behalf of Evangelism Outreach, Inc.

(8) The holder of a CLASS B bingo license is prohibited from awarding more than eight thousand dollars in prize money a session and may not conduct more than three (3) bingo sessions a week. S.C. Code Ann. § 12-21-3440(2) (Supp. 1994).

(9) Respondents violated S.C. Code Ann. § 12-21-3440(2) (Supp. 1994), by exceeding the allowable total payout for a single session of bingo by a CLASS B license holder, as charged in DOR Violation Report (Respondent's Exhibit #1).

(10) Respondents did not violate S.C. Code Ann. § 12-21-3410(1) (Supp. 1994), as charged in the DOR Violation Report (Respondent's Exhibit #1). "Bingo Bucks" coupons awarded as prizes were redeemable as cash for any items or games sold at the bingo session. The coupons do not constitute free bingo games or allow purchase of a bingo game card for an uncertain amount.

(11) Respondents violated S.C. Code Ann. § 12-21-3410(4) (Supp. 1994), as charged in the DOR Violation Report (Respondent's Exhibit #1), by conducting the bingo game of "speedball," in which players are not shown by visual display the numbers drawn by the caller.

(12) S.C. Code Ann. § 12-21-3410(4) (Supp. 1994) provides inter alia: "After the number is announced, it must be indicated on the master-board by the caller."

(13) "Master-board" is statutorily defined as the receptacle used by the house to display balls which are drawn during the bingo game. S.C. Code Ann. § 12-21-3320(15) (Supp. 1994).

(14) S.C. Code Ann. § 12-21-3410(6) (Supp. 1994) provides that "all devices, including the master-board, used to show what numbers have been called during a game must not be changed or turned off until the winners are verified."

(15) Under applicable rules of statutory construction, statutes must be afforded practical, reasonable, and fair interpretation consonant with the purpose, design, and policy of the legislature, and where statutes relate to the same subject, they must be construed together and harmonized, if possible, to be given effect by reasonable construction. Deltoro v. McMullen, S.C. Ct. App. Op. #2423 (filed November 27, 1995). Accordingly, I conclude that a bingo "master-board" reasonably includes the tray in which the caller places a numbered ball after calling the number, as well as the visual display unit used to show players which numbers have been drawn.

(16) Respondents did not violate S.C. Code Ann. § 12-21-3410(3) (Supp. 1994), as charged in the DOR Violation Report (Respondent's Exhibit #1). DOR admits that § 12-21-3410(3) was mistakenly cited in the Violation Report.

(17) The charge by DOR that Respondents violated S.C. Code Ann. § 12-21-3420(4) (Supp. 1994) is dismissed pursuant to Respondents' Motion to Dismiss, because DOR failed to include that charge in the Violation Report (Respondent's Exhibit. #1) issued to Respondents. Further, DOR failed to amend the Violation Report or issue an additional Violation Report, and therefore never officially cited Respondents with the violation. That oversight is not corrected by including the allegation of a violation of § 12-21-3420(4) in the Agency Transmittal Form or Prehearing Statement filed by DOR with the Administrative Law Judge Division.

(18) A violation of the Bingo Act is punishable by imposition of a fine of twenty dollars to one thousand dollars, with each violation constituting a separate offense. S.C. Code Ann. §12-21-3550 (Supp. 1994).

ORDER

IT IS THEREFORE ORDERED that no later than fifteen (15) days from the date of this Order, Respondents must pay a total penalty of One Thousand Three Hundred Dollars ($1,300) for the following violations:

Violation of S.C. Code Ann. § 12-21-3440(2) (Supp. 1994): $1,000 fine

Violation of S.C. Code Ann. § 12-21-3410(4) (Supp. 1994): $ 300 fine

IT IS FURTHER ORDERED that non-payment of the above fines within the prescribed period shall result in automatic revocation of the Respondents' respective operator's and promoter's bingo licenses by DOR.

______________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

December 6, 1995

Columbia, South Carolina