ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
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. § 12-21-3990(A)(1) (2000 & Supp. 2002) (awarding bingo cards as prizes) and a fine in the amount of
$500.00 for violation of S.C. Code Ann. § 12-21-3990(A)(2) (2000 & Supp. 2002) (failure to
announce prizes). A hearing was held before me on February 20, 2004 at the offices of the
Administrative Law Court in Columbia, South Carolina.
STIPULATIONS OF FACT
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 February 10, 2003, Taylors Youth Association was doing business as Anderson
Mall Bingo located at 3131 North Main Street, Anderson, S.C. and was operating under bingo
license number 80000236-9.
2.Ramon Ashy, Jr. of Ashy International, Inc. was the promoter for Taylors Youth
Association, d/b/a Anderson Mall Bingo and was operating under bingo promoter license number
80008378-0.
3.On February 10, 2003, undercover bingo players Connie Buckman and Rita Autry
conducted an undercover bingo inspection of the above organization.
4.That upon entry at approximately 5:30 p.m., the undercover players did purchase a
computer program plus two packs of cards to daub and were given entry fee ticket numbers 237523
and 237525 and a bingo program guide with “Anderson Mall Bingo” written across the top.
5.That regulatory violations of S.C. Code Section 12-21-3990(A)(1) and (A)(2) were
issued on March 5, 2003 by the Department to Ashy International whose mailing address is P.O. Box
26256, Greenville, S.C. 29616 and to Taylors Youth Association whose mailing address is P.O. Box
821, Taylors, S.C. 29687.
6.That on May 5, 2003, Kathy Horn, the manager of Anderson Mall Bingo, did sign for
each of the regulatory violations and proposed assessment reports as well as attachment FS-31
entitled “Explanation of Regulatory Violation” served by William Byars and William E. Riley.
7.That the Department did issue a Final Determination dated June 11, 2003 to Ramon
J. Ashy and Taylors Youth Association sustaining the violations.
FINDINGS OF FACT
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.On a typical night, approximately seventy (70) to eighty (80) bingo games are played
at a licensed bingo hall. Upon entering a bingo hall, a bingo player pays an entrance fee and then
purchases bingo cards (paper) or the computer program the player initially wants to play. A “runner”
in the hall also carries cash to and from the players, sells additional games and/or cards, and fields
questions. The player normally plays the paper originally purchased until that paper is exhausted.
The player may then summon a runner to purchase additional paper directly from the runner or may
purchase paper at the counter. Players usually interact with the runners because it is more convenient
for the player to deal with a runner at their location while seated rather than potentially miss games
when they leave the floor.
3. As set forth above in the Stipulations of Fact, undercover players Connie Buckman
and Rita Autry entered the Anderson Mall Bingo location at approximately 5:30 p.m. on February
10, 2003 and purchased bingo cards.
Anderson Mall Bingo customarily proffers a “flag game” that
is played early in the evening (an “early bird game”) in which the winner receives the prize of
playing free for the remainder of the night. Ms. Buckman testified that the caller of the flag game
on February 10, 2003, specifically used the word “free” in describing the prize of “free bingo cards
for the remainder of the evening” to be awarded when this particular flag game was announced, in
contravention to S.C. Code Ann. § 12-21-3990(A)(1) (2000 & Supp. 2002). However, Ms. Buckman
did not see the winner and neither saw nor heard the exchange between the winner and the runner.
Therefore, no evidence was presented that the winning player did indeed receive free bingo cards as
a prize for winning the flag game.
4.While playing bingo at this location, Ms. Buckman also observed that the bingo caller
was not calling out the prizes at the conclusion of each game, contrary to S.C. Code Ann. § 12-21-3990(A)(2) (2000 & Supp. 2002).
Ms. Buckman kept a spreadsheet of the bingo games played that
evening upon which she notated that the caller did not announce the final prizes awarded in sixteen
(16) games. She observed that the first caller did a more accurate job of announcing the prizes at
the end of the individual games than the second replacement caller.
5.Respondent Ramon Ashy, whose father is also a bingo promoter, has been a promoter
in the business himself since 1996. He has been a big proponent of The Bingo Tax Act (Act) which
regulates this charitable industry. More importantly, he was instrumental in the passage of the recent
amendments to the Act upon which these charges sub judice are based.
As to the violation of Section 12-21-3990(A)(1), Mr. Ashy set forth that it is his business’
practice that bingo callers never announce “free” games as prizes or use the word “free” in an
announcement. He also set forth that this is stated in his policy manual for training employees.
When a flag game is advertised, announced and played, it is his practice that the bingo caller would
place a cash value on that game which is an estimate of what the player could ultimately spend to
play bingo for the remainder of the evening. A typical value of $250.00 would be the announced
valuation for the early flag game since a considerable number of games remain to be played that
night. When the flag game had a winner, it was Mr. Ashy’s previous practice that the runner would
hand the winner of the flag game a stack of bingo cards and would replenish those cards as the
evening wore on if the player ran out with no exchange of cash between the winner and the runner.
This was so the customer was not inconvenienced by having to leave his/her seat to go to the
counter. Mr. Ashy referred to this as a “phantom transaction” because it takes place as if the winner
is given cash and then immediately returns the cash for the bingo cards. In essence, a step is
removed from the process and the customer would immediately resume playing bingo. However,
those games are listed on the daily inventory the same as if the money had exchanged hands and the
player paid for the paper from the winnings of the flag game.
Mr. Ashy further testified that after he was charged with violating Section 12-21-3990(A)(1)
on October 1, 2002,
he changed the manner in which the prizes were awarded for the flag games
so as to remove any question of a violation, even though the customers are inconvenienced. As the
date of this alleged violation was February 10, 2003, Mr. Ashy had already changed his procedures.
As to the violation of Section 12-21-3990(A)(2), Ms. Buckman kept a written record which
documented the bingo caller’s failure to announce prizes at the conclusion of approximately sixteen
(16) games that evening. Although Mr. Ashy submitted that eighty-one (81) games were played that
night and Ms. Buckman had only noted that seventy (70) games were played, I find that the bingo
caller did not announce prizes at the conclusion of every bingo game played on February 10, 2003,
in violation of Section 12-21-3990(A)(2).
CONCLUSIONS OF LAW
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 Court to
hear contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. §§12-60-30 and 12-60-460 (2000) grant the Court 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. § 12-21-3990(A)(1),
entitled “Manner of Playing Bingo,” which sets forth:
(A) The game of bingo must be played in the following manner:
(1) Bingo is played by more than one player and a caller who is associated with the house.
Each player must pay face value for each card to be played during the course of a game and
may purchase the card for a specified number of games. All cards sold for a game must sell
for face value and cards may not be given to players as prizes or for free. After the player has
purchased a card or cards for a specified number of games, the house cannot require or accept
an additional payment or consideration by the player in order to complete the specified
number of games.
(emphasis added). In this case, the undercover bingo player did not specifically see or hear the
transaction in question in which the Respondents awarded the flag game winner bingo cards in
violation of this section.
3.The Respondents are also charged with violating Section 12-21-3990(A)(2). That
code section sets forth:
(2) Before each game begins, the caller shall announce to the players the
configuration or configurations that will win the game. A configuration consists of
a number of grids covered in the manner announced by the caller. Any method of
playing the games is allowed if the method is announced before each game's
beginning including, but not limited to, wild card games. In addition, at the
conclusion of each game, the prize, specifically stating the dollar amount or value of
merchandise awarded to the winner or winners for the game completed, must be
announced before the next game begins.
(emphasis added). The Department’s undercover bingo player kept a written record of the
Respondents’ failure to call approximately sixteen (16) bingo games of the seventy (70) she had
listed. Although Mr. Ashy set forth that eighty-one (81) games were played that night, I do not find
this dispositive of a violation.
4.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 fines in the amount of $500.00 for each violation of
Section 12-21-3990 allegedly found at the bingo hall on the evening of February 10, 2003. See
Revenue Procedure # 97-7. Since I do not conclude that the Respondents violated the provisions of
Section 12-21-3990(A)(1), no sanctions are warranted for that offense. However, the Respondents
clearly violated the provisions of Section 12-21-3990(A)(2) by failing to announce the prizes at the
conclusion of each game. Nevertheless, I find that a reduction in the fine is warranted in light of the
fact that: 1) this statute was very recently enacted; and 2) the violation did not represent Mr. Ashy’s
posture concerning announcing prizes, especially in light of his prominent role in encouraging the
passage of the very statute he is accused of violating.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY
ORDERED that the Respondents remit a fine of $100.00 to the Department for violation of Section
12-21-3990(A)(2) within thirty (30) days from the date of this Order.
AND IT IS SO ORDERED.
___________________________
Ralph King Anderson, III
Administrative Law Judge
May 28, 2004
Columbia, South Carolina |
