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SC Administrative Law Court Decisions

DOR vs. LBC Midland Valley Lions Club, d/b/a Mr. Bingo, and Paul Hermelink, Promoter

South Carolina Department of Revenue

South Carolina Department of Revenue

LBC Midland Valley Lions Club, d/b/a Mr. Bingo, and Paul Hermelink, Promoter

Lynn M. Baker, Esquire, for the Petitioner

S. Jahue Moore, Esquire, for the Respondents




This matter comes before the Administrative Law Court (ALC or Court) pursuant to S.C. Code Ann. §§12-60-30 and 12-60-460 (2000). The South Carolina Department of Revenue (Department) seeks a fine in the amount of $500.00 for violation of S.C. Code Ann. §§ 12-21-4000(14) & (15) (2000 & Supp. 2002). A hearing was held before me on March 16, 2004 at the offices of the Administrative Law Court in Columbia, South Carolina. Footnote


At the hearing on this matter and pursuant to ALC Rule 25(C), the parties entered the following written stipulations of fact into the Record:

1.On July 5, 2003, LBC Midland Valley Lions Club was doing business as Mr. Bingo located at 101 Luken Road, Goose Creek, S.C., 29445 and was operating under bingo license number 80000211-8.

2.Paul Hermelink was the promoter for LBC Midland Valley Lions Club d/b/a Mr. Bingo and was operating under bingo promoter license number 80008366-4.

3.On July 5, 2003, undercover bingo players, Donna Crowley and Susan Catt, conducted an undercover bingo inspection of the above organization.

4.That upon entry to the bingo hall, the undercover players did purchase bingo paper and pay the admission fee.

5.That the house was selling pull tab cards.

6.That the undercover players did purchase and play pull tab cards during the bingo session.

7.That the pull tab cards were purchased from a runner on the floor of the bingo hall for $1 each.

8.That these cards are played by pulling open the perforations on the back of the card to see if any of the combinations of numbers and/or symbols match the winning combinations on the front of the cards.

9.That runners often announce as they are working the floor that they have pull tabs for sale.

10.That the winners of these cards redeem their cash prize by signaling a runner who will verify the winning card and pay the amount of the prize to the winner.

11.That a regulatory violation of S.C. Code Section Ann. 12-21-4000(14) was served on July 27, 2003, by the Department Inspectors, Mike Catt and David Sons, to Paul Hermelink and to LBC Midland Valley Lions Club d/b/a Mr. Bingo.

12.That on July 27, 2003, Michelle Pisacreta, a representative of the bingo [sic], did sign for the regulatory violations and proposed assessment reports as well as attachment FS-31 entitled “Explanation of Regulatory Violation” served by Mike Catt and David Sons.

13.That the Department did issue a Final Determination dated October 30, 2003 to Paul Hermelink and LBC Midland Valley Lions Club d/b/a Mr. Bingo finding a violation of Sections 12-21-4000 (14) and (15) and assessing a fine of $500.


Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:

1.Notice of the time, date, place and subject matter of the hearing was given to the

Petitioner and the Respondents.

2.Pull tab cards (pull tabs) were purchased from the floor at LBC Midland Valley Lions Club d/b/a Mr. Bingo on July 5, 2003. The player could potentially win between $1 and $1,000 from each card.


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

1.S.C. Code Ann. § 1-23-600 (1986 & Supp. 2002) grants jurisdiction to the ALC to hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. §§12-60-30 and 12-60-460 (2000) grant the ALC the authority to hear contested case hearings in matters arising under the Department of Revenue, and, more specifically, the Bingo Tax Act.

2.The Respondents are charged with violating S.C. Code Ann. §§ 12-21-4000(14)& (15). Footnote Those sections provide that:

(14) Bingo only may be played at the place designated by the bingo licensee on its original or amended application.

(15) The house may hold promotions of special events during a session offering players prizes other than from the play of bingo not to exceed one hundred dollars in cash or merchandise for each session. This amount is not to be paid out of the bingo account and is not included in total payouts for a session. There is no additional charge to players to participate in a special promotion. The promotion must not be a form of gambling or a game of chance.

3.The Department contends that the Respondents’ sale of pull tabs violated Section 12-21-4000(14) because that section requires that only bingo may be played upon the place designated by the license. “The construction of a statute by an agency charged with its administration is entitled to the most respectful consideration and should not be overruled absent compelling reasons.” Home Health Service, Inc. v. South Carolina Tax Com'n, 312 S.C. 324, 327, 440 S.E.2d 375, 377 (1994). Here, however, there is no evidence that the Department has formally adopted the interpretation its agents are propounding. Therefore, the Department’s current position is not entitled to the Home Health Service deference. More importantly, the South Carolina Supreme Court has held that:

The principle is well established that penal statutes are strictly construed, and one who seeks to recover a penalty for the failure on the part of the defendant to discharge some duty imposed by law, must bring his case clearly within the language and meaning of the statute awarding the penalty. Such laws are to be expounded strictly against the offender and liberally in his favor. . . . And it is immaterial, for the purpose of the application of the rule of strict construction whether the proceedings for the enforcement of the penal law, be criminal or civil. . . .

South Carolina Dept. of Revenue v. Collins Entertainment Corp, 530 S.E.2d 635, 636 (2000) (quoting State ex rel. Moody v. Stem, 213 S.C. 465, 50 S.E.2d 175 (1948)). Since “only” follows the word “bingo” in Section 12-21-4000(14), that section could also be read to state that upon receiving a bingo license, the promoter must hold the bingo games authorized by that license at the specific place designated by the license. Therefore, strictly construing Section 12-21-4000(14) against the Department, I find that this statute does not prohibit any activity other than bingo in a bingo hall. Consequently, I find the Department failed to establish a violation of Section 12-21-4000 (14) in this case.

4.The Department also contends that the Respondents violated Section 12-21-4000(15) because the pull tabs sold by the Respondents were sold during a session “offering players prizes other than from the play of bingo” in excess of one hundred dollars in cash. The Department further argues that the sale of pull tabs was unlawful because those sales are a promotion in the form of a game of chance. The Respondents, on the other hand, argue that the sale of pull tabs is neither a “promotion of a special event” Footnote or “a game of chance.” Footnote Rather, interestingly, the Respondents contend that if the sale of pull tabs are lawful, their sale inside the bingo hall would be akin to the sale of any other merchandise in the hall.

I find that, in order to violate Section 12-21-4000(15), the bingo promoter/operator must:

hold a “promotion of special events;”

during a session;

offering players prizes other than from the play of bingo;

in which the cash or merchandise exceeds one hundred dollars.

Moreover, any “special event” or promotion in the form of gambling or a game of chance is a prohibited promotion in a bingo hall. Here, the Respondents clearly sold “pull tabs” during a session in the bingo hall. Those sales were an event that was promoted by the hall involving the sale of a game of chance other than the play of bingo. In other words, even if lawful elsewhere, the sale of pull tabs in a bingo hall during a session is prohibited because the statute unambiguously prohibits a “promotion” involving a “game of chance.” Consequently, the sale of pull tabs during a bingo session violates Section 12-21-4000(15).

5.The Administrative Law Court has the authority to establish the imposition of a penalty for a violation. Inherent in and fundamental to the powers of an Administrative Law Judge, as the trier of fact in contested cases under the Administrative Procedures Act, is the authority to decide the appropriate sanction when such is disputed. Walker v. South Carolina ABC Comm’n, 305 S.C. 209, 407 S.E. 2d 633 (1991). To that end, the Administrative Law Judge must consider relevant evidence presented in mitigation. Mitigation is defined as a lessening to any extent, great or small. It may be anything between the limits of complete remission on the one hand and a denial of any relief on the other. In a legal sense, it necessarily implies the exercise of the judgment of the court as to what is proper under the facts of the particular case. 58 C.J.S. Mitigation p. 834-835 (1948). A legitimate as well as a significant consideration is whether the alleged mitigating factor demonstrates reasonable cause to reduce the penalty. Kroger Co. v. Department of Revenue, 673 N.E. 2d 710 (Ill. 1996).

In this case, the Department seeks a fine in the amount of $500.00 for violating Sections 12-21-4000(14) and (15). As I do not conclude that the Respondents violated the provisions of Section 12-21-4000(14), no sanctions are warranted for that offense. Therefore, in light of the dismissal of those charges, I find that a reduction in the fine is warranted.


Based upon the foregoing Stipulations of Fact, Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that the Respondents remit a fine of $300.00 to the Department for violation of Section 12-21-4000 (15) within thirty (30) days from the date of this Order.



Ralph King Anderson, III

Administrative Law Judge

April 28, 2004

Columbia, South Carolina

Brown Bldg.






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