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
$100.00 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 December 8, 2002, S.C. Association for Blind Athletes was doing business as
Northside Bingo located at 1509 Montague Avenue Ext., Greenwood, SC and was operating under
bingo license number 80000098-6.
2.Ramon Ashy, Sr. of CMW Educational Services was the promoter for S.C.
Association for Blind Athletes d/b/a Northside Bingo and operated under bingo promoter license
number 80008396-8.
3.On December 8, 2002, undercover bingo players for the Department of Revenue,
Connie Buckman and Susan Catt, conducted an undercover bingo inspection of the above
organization.
4.That upon entry at approximately 6:00 PM, the undercover players did purchase a
computer program plus several other program packs, paid an admission fee and were given entry
tickets numbered 197320 and 197300 and an orange bingo program guide with “Northside Bingo”
written across the top.
5.That undercover player, Connie Bucknam, did win a flag game.
6.That regulatory violations of S.C. Code Ann. § 12-21-3990(A)(1) and (A)(2) were
issued on March 9, 2003 by the Department to CMW Educational Services, Inc. whose mailing
address is P.O. Box 26057, Greenville, SC 29616 and to SC Association for Blind Athletes whose
mailing address is 8301 Farrow Road, Education Building, Room #13, Columbia, SC 29203.
7.That Wanda Gambrell, the manager of Northside Bingo, did sign for each of the
regulatory violations and proposed assessment reports as well as attachment FS-31 entitled
“Explanation of Regulatory Violation” issued by William Byars and William Riley.
8.That the Department did issue a Final Determination dated June 11, 2003 to Ramon
J. Ashy and S.C. Association for Blind Athletes 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 Susan Catt entered Northside Bingo location at approximately 6:00 p.m. on December 8, 2002,
and purchased bingo cards. Northside 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. Catt testified that the caller of the flag game on December 8, 2002,
specifically used the word “free” in describing the prize of “free bingo cards for the remainder of
the evening” to be awarded when the flag game was announced.
Ms. Buckman won the flag game on December 8, 2002, and the runner placed a stack of
cards in front of her after she was verified as the winner. She neither requested cash in lieu of the
cards nor did the runner offer a cash prize in lieu of the bingo paper. In fact, the runner was not
carrying any cash when she received the cards for winning the flag game. Ms. Buckman continued
to play with this paper awarded as a prize for winning the flag game, contrary to S.C. Code Ann. §
12-21-3990(A)(1) (2000 & Supp. 2002).
In fact, the runner automatically replenished her supply
of bingo cards when she ran out of them later in the evening.
4.While playing bingo at this location, both undercover players 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).
Although the announcer called the prizes out at
the conclusion of some games, the caller more often did not announce them.
5.Ramon Ashy, Sr., the promoter for S.C. Association of Blind Athletes d/b/a Northside
Bingo, did not appear at the hearing in this case. However, his son Ramon Ashy, Jr., who is
involved with the operation of his father’s business, testified as to the procedures customarily
followed by him and his father’s bingo staff. Ramon Ashy, Jr., has been a promoter in the business
himself since 1996. He has been a big proponent of The Bingo Tax Act (The 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 his father’s staff is
instructed to never announce “free” games as prizes or use the word “free” in an announcement.
Furthermore, when a flag game is announced, his father’s staff is instructed to place an estimated
cash value on the game of what that player could ultimately spend to play bingo for the remainder
of the evening. A typical value of $250.00 would be the announced price valuation for the early flag
game since a considerable number of games remained 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 money had exchanged hands and the player paid for the paper from the winnings of
the flag game.
Mr. Ashy further testified that after his father 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.
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 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. § 12-21-3990(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 was the actual winner of the flag game
and was given bingo cards as a prize, in contravention to Section 12-21-3990(A)(1). Therefore, I
find that the Respondents did commit this violation.
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). Although the Department’s undercover bingo players could not testify as to
exactly which games were not called, the Respondents did not present any evidence to refute these
allegations. Therefore, I conclude that the bingo caller did not announce prizes at the conclusion of
every bingo game played on December 8, 2002, in violation of Section 12-21-3990(A)(2).
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 a fine in the amount of $500.00 for violation of Section
12-21-3990(A)(1) and a fine in the amount of $100.00 for violation of Section 12-21-3990(A)(2).
As set forth above, I conclude that the Respondents violated both of these statutes. Nevertheless,
I find that a reduction in the fine is warranted in light of the fact that: 1) the statutes he violated were
recently enacted; 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; and 3) and Mr. Ashy immediately sought to rectify his procedures so as to
prevent future violations.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, IT IS HEREBY
ORDERED that the Respondents remit a fine of $300.00 to the Department for violating Sections
12-21-3990(A)(1) and (A)(2) within thirty (30) days from the date of this Order.
AND IT IS SO ORDERED.
___________________________
Ralph King Anderson, III
Administrative Law Judge
June 16, 2004
Columbia, South Carolina |
