Gambling Law US
South Carolina Charitable Gaming
South Carolina Charitable Bingo
Gambling Related Websites
Current through Dec. 1, 2016
§ 12-21-3910. Short title.
This article may be cited as the Bingo Tax Act of 1996.
§ 12-21-3920. Definitions.
As used in this article:
(1) "Bingo" or "game" means a specific game of chance, commonly known as bingo, in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers and symbols selected at random.
(2) "Department " means the South Carolina Department of Revenue.
(3) "Card" means a printed or nonprinted design on which there are arranged five horizontal rows and five vertical columns forming twenty-five squares. Numbers are printed in twenty-four of the squares, and the term "free", "free square", or " free space" is printed in the square or space located in the center of the card. The five columns are denominated from left to right by the respective letters of the word "B-I-N-G-O". Each square in the "B" column contains a number from one through fifteen inclusive; each square in the "I" column contains a number from sixteen through thirty inclusive; except for the center space which is marked as free, each square in the "N" column contains a number from thirty-one through forty-five inclusive; each square in the "G" column contains a number from forty-six through sixty inclusive; and each square in the "O" column contains a number from sixty-one through seventy-five inclusive. A number may not appear twice on the same card. A nonprinted design is a bingo ticket for use only with an electronic dabber. The bingo ticket is a perforated two-part ticket and must bear a sequential serial ticket number, the South Carolina state seal, denomination, number of faces authorized for download or activation, the Department of Revenue issued organization license number, and other information that may be required by the department. The ticket must have designated blanks for entry of the date sold and electronic dabber unit number supplied. Bingo tickets must be printed by a bingo ticket manufacturer licensed by the department and must be sold only by a distributor licensed by the department. Bingo tickets must meet the design and requirements of the department. Bingo tickets may be used only by a promoter or nonprofit organization if the ticket has been approved by the department. A license for a bingo ticket manufacturer costs one thousand dollars. A manufacturer of bingo cards or electronic dabbers or site systems, a distributor, a promoter, or a nonprofit organization may not have an interest, direct or indirect, in a bingo ticket manufacturer. The bingo ticket manufacturer must maintain records as required by the department.
(4) "Promoter " means an individual, corporation, partnership, or organization licensed as a professional solicitor by the Secretary of State who is hired by a nonprofit organization to manage, operate, or conduct the licensee's bingo game. The person hired under written contract is considered the promoter.
(5) "Nonprofit organization " means an entity which is organized and operated exclusively for charitable, religious, or fraternal purposes which is exempt from federal income taxes pursuant to Internal Revenue Code Section 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10), or 501(c)(19).
(6) "Session " means a consecutive series of games which must occur only between the hours of 12:00 p.m. and 2:00 a.m. No more than one session, limited to twelve hours, may occur during the permitted fourteen-hour period. Regardless of the starting time within the permitted period, the session may not extend beyond 2:00 a.m. These limitations do not apply to games operated by state or county fairs.
(7) "Fair" means a recognized annual state or county fair. The fair must be recognized by the governing body of the county in which it is held, or in the case of the State, by the South Carolina Agricultural and Mechanical Society.
(8) "Ball " means a ball, disk, square, or other object upon which is printed a letter and number which corresponds to the letter and number of a square on a bingo card.
(9) "Cage " means a device, whether operated manually or by air blower, in which bingo balls are placed before the bingo game begins.
(10) "Caller " means the house representative who is responsible for drawing bingo balls and announcing the configuration and the result of each drawing to the players.
(11) "Drawing " means the indiscriminate selection of a single ball from the cage.
(12) "House " means the nonprofit organization and promoter licensed with the department.
(13) "Marker " means a device which indicates the number called.
(14) "Master-board " means the receptacle used by the house to display balls which are drawn during the bingo game.
(15) "Player" means one who participates in a game of bingo other than as an agent, promoter, or representative of the house.
(16) "Fund " means the Parks and Recreation Development Fund.
(17) "Building " means a structure surrounded by exterior walls or permanent firewalls.
(18) "Manufacturer " means a person who manufactures bingo cards for use in this State and who is approved by the department.
(19) "Distributor " means a person who brings or sells bingo cards in this State and who is approved by the department.
(20) "Electronic dabber " means a hand-held electronic device that allows a player to store, display, and mark bingo card faces that have been downloaded or activated as authorized by the bingo ticket. All electronic dabbers must be tested and approved by an independent testing facility to be determined by the department within forty-five days of a written request. All costs for testing are the responsibility of the manufacturer wishing to sell, lease, rent, or otherwise distribute the electronic dabber in South Carolina for the conduct of bingo. The sole and exclusive determination as to whether an electronic dabber meets the requirements of this chapter rests with the department in its sole discretion. If this determination is appealed, the promoter and nonprofit organization may not use the electronic dabber during the pendency of the appeal.
(21) "Site system " means a computer accounting system commonly referred to as a point of sale system used in conjunction with electronic dabbers. This computer software must be used at a site by an organization which allows a bingo ticket purchased from a licensed distributor to authorize the download or activation of faces into the electronic dabbers, accounts for gross proceeds, and provides accounting information on all activity for one year from the end of the quarter in which the activity occurred. All site systems and electronic dabbers must be tested and approved by an independent testing facility to be determined by the department within forty-five days of written request. All costs for testing are the responsibility of the manufacturer wishing to sell, lease, rent, or otherwise distribute the site system in South Carolina for the conduct of bingo. The sole and exclusive determination as to whether a site system meets the requirements of this chapter rests with the department in its sole discretion. If this determination is appealed, the promoter and nonprofit organization may not use the site system during the pendency of the appeal.
§ 12-21-3930. Conditions under which bingo not considered lottery.
The game of bingo is not a lottery when:
(1) the nonprofit organization conducting the game has completed the application as described in Section 12-21-3940 and the application has been approved by the department;
(2) the promoter under contract with the nonprofit organization is licensed properly with the department;
(3) the nonprofit organization presents to the department upon application a certified copy of the statement issued by the Internal Revenue Service exempting it from federal income taxation;
(4) the game is conducted in accordance with the provisions of Sections 12- 21-3990 and 12-21-4000 and approved cards are used.
§ 12-21-3935. Video poker play prohibited.
Nothing in this article may be construed to allow video poker play and the prohibitions regarding video poker in Sections 12-21-2710, 16-19-40, and 16-19-50 apply.
§ 12-21-3940. License to conduct bingo.
(A) Before conducting a game of bingo, a nonprofit organization shall file with the department a written application in a form prescribed by the department, executed and notarized which must include:
(1) the name, address, and telephone number of the applicant and sufficient facts relating to its incorporation and organization to enable the department to determine whether it is an authorized organization;
(2) a copy of the organization's corporate charter and the Internal Revenue Service's statement exempting the applicant from federal income taxes;
(3) the names, addresses, and telephone numbers of the organization's officers;
(4) the place and time the applicant intends to conduct bingo under the license for which it applied;
(5) the specific purpose to which the bingo net proceeds are to be devoted;
(6) the designation of a "promoter" as defined by this article;
(7) a copy of any contract or lease between a promoter and the nonprofit organization;
(8) the name, address, telephone number, birth date, and Social Security number of each person who will work at the proposed bingo games and receive compensation for the work, the nature of the work to be performed, and a statement as to whether or not the person has been convicted within the last twenty years of a state or federal felony, gambling offense, criminal fraud, or a crime that has a sentence of two or more years;
(9) other information considered necessary by the department.
(B) Upon application for a license, the department has thirty days to approve or reject the application based on the requirements of this article.
(C) The nonprofit organization does not need to apply for renewal of the license as long as there are no changes in the operation or location of the game. Changes in information supplied on the original application must be forwarded to the department, in writing, within thirty days of the change. In the case of a change in the place and time, notice must be given thirty days before the change.
(D) A license must not be issued for conducting a game of bingo at an establishment holding a license pursuant to the provisions of Section 61-6- 1820.
§ 12-21-3950. Promoter's license.
(A) A promoter under contract with a licensed nonprofit organization to manage, operate, or conduct a game shall file a written application for a promoter's license in a form prescribed by the department, executed and notarized, which must include:
(1) the name, address, telephone number, and Social Security number of the promoter or of each officer if the promoter is a corporation;
(2) a copy of the promoter's contract or lease with the nonprofit organization. A contract must exist between the sponsoring organization and the promoter detailing all expenses;
(3) the name, address, telephone numbers, and Social Security number of any person working for the promoter at the bingo game and receiving compensation for the work;
(4) a notarized statement as to whether or not the applicant for a promoter's license or any of his employees have been convicted within the last twenty years of a state or federal felony, gambling offense, criminal fraud, or a crime that has a sentence of two or more years.
(B) Upon application for a license, the department has forty-five days to approve or reject the application based on the requirements of this article.
(C) A promoter shall file a renewal application each year submitting any changes in information and documentation previously submitted as required by this section. The promoter is required to notify the department, in writing, of any changes in the information supplied on the application within thirty days of the change.
(D) The license authorized by this section is for the privilege of engaging in business as a bingo promoter and must be purchased from the department at a cost of one thousand dollars a year.
A promoter shall obtain a promoter's license for each organization for which he operates bingo games.
§ 12-21-3955. Designation of member as promoter.
If a nonprofit organization intending to operate a Class AA or B license does not contract with an outside promoter, the organization shall designate a member as the promoter.
§ 12-21-3960. Liability for taxes, interest, penalties and fines.
The promoter and the nonprofit organization are jointly and severally liable for all taxes, penalties, interest, and fines imposed by this article and Chapter 54 of this title.
§ 12-21-3970. Promoter's license required for each licensee.
For each licensed nonprofit organization the promoter manages, operates, or conducts bingo, the promoter must purchase a promoter's license as provided in Section 12-21-3950 before operating or conducting bingo. No promoter is permitted more than five licenses. This license must be prominently displayed at the location where bingo is conducted.
§ 12-21-3980. Transfer or other disposition of license.
(A) The promoter's license authorized by this article must not be transferred to another person, organization, entity, or corporation. The promoter's license, upon written application to the department, may be transferred to a new location for the remainder of the license period if the licensed nonprofit organization has applied for a location transfer as provided in subsection (B) of this section. The written application must be on a form prescribed by the department and must state, under penalties of perjury, that the information on the transfer application and the original license application is true and correct, or, in the case of the original application, is still valid and unchanged. No additional license fee is required with respect to the transfer of the location and the promoter may not conduct bingo at the new location until the new license is issued.
(B) The nonprofit organization's license authorized by this article must not be transferred to another nonprofit organization and is valid and continues in force so long as the nonprofit organization to which it is issued continues to conduct the bingo games at the location authorized by the license.
The nonprofit organization's license, upon written application to the department, may be transferred to a new location. The written application must be on a form prescribed by the department and must state, under penalties of perjury, that the information on the transfer application and the original license application is true and correct or, in the case of the original application, is still valid and unchanged. The nonprofit organization cannot operate at the new location until the new license is issued.
(C) No promoter or nonprofit organization may lease, sell, rent, lend to, or exchange with another person, organization, corporation, or other entity a promoter's or bingo license issued pursuant to this article.
§ 12-21-3990. Manner of playing bingo.
(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.
(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, anytime before the conclusion of the game, the prize, specifically stating the dollar amount or value of merchandise awarded to the winner or winners for the game, must be announced.
(3) The prize must be awarded to the winner of that game without delay. For multiple winners, the prize must be divided equally among the winners. In the case of a merchandise prize, the cash value of the merchandise may be divided among the winners. Purchase receipts of merchandise awarded as prizes must be made available to players and the department for confirmation of value.
(4) The caller shall draw and announce numbers from the cage one at a time. If a player has a card with the called number on it, he may use a marker to cover the square which contains the number. After the number is announced, it must be indicated on the master-board by the caller.
(5) When a player covers sufficient squares on a card to achieve the winning configuration, he may indicate to the caller. The caller shall require that the player's card be checked against the master-board in the presence of the other players to determine if the squares were covered accurately. If it is determined by the caller that the player accurately has covered the squares and achieved the preannounced configuration, the player is declared the winner. If it is determined that the player has not covered the squares accurately and achieved the preannounced configuration, play continues in that game.
(6) 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.
§ 12-21-4000. Procedures applicable to conduct of bingo.
In addition to the manner of play prescribed in Section 12-21-3990, the following procedures apply to the conduct of the game:
(1) Before the beginning of the first game, all seventy-five balls must be displayed openly on the master-board for the inspection of the players.
(2) Only one set of seventy-five balls and only one master-board is allowed in the room or area during the play of the game.
(3) Only one bet or payment is to be paid for each card.
(4) No bets or payments may be made while a game is in progress, except the sale of cards for subsequent games.
(6) The house is required to identify the games for which a card may be used before the card is purchased.
(7) Before the start of play, the caller shall announce to all players the winning configuration of covered squares for that particular game.
(8) The prize must be awarded to the first person who successfully achieves the winning configuration of covered squares. All winning configurations must be verified using an electronic verifying system and must be displayed on the monitor for all players to see.
(9) Balls must be selected randomly by an indiscriminate process.
(10) Only one number may be called at a time.
(11) All balls drawn remain on the master-board until the conclusion of the game.
(12)(a) At least fifty percent of the gross proceeds of the sale of bingo cards taken in by the house during a single session must be returned to the players in the form of prizes. However, with respect to fair licenses, this requirement must be met during the course of the fair.
(b) A bingo operation may take in only two times more in gross proceeds than the prize for that session averaged on a quarterly basis. Amounts in excess of this limit are subject to a tax, in addition to any other bingo license taxes and fees equal to the amount of the excess. Each session that the gross proceeds are greater than twice the prize amounts paid constitutes a separate offense if the tax is unpaid. This excess proceeds tax must be remitted to the department on the organization's quarterly bingo report and distributed as provided in Section 12-21-4190. Failure to remit this excess proceeds tax to the department shall result in immediate suspension of both the promoter's license and the organization's license. The department, after a conference with the promoter and organization, may permanently revoke the license of the promoter or the nonprofit organization, or both. If permanently revoked, the promoter, nonprofit organization, or any partner or member of the organization may no longer manage, conduct, or assist in any manner with a bingo operation in this State.
(13) The playing of bingo is restricted to the premises designated with the department by the sponsor organization.
(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.
§ 12-21-4005. Operation of bingo games; scope.
The operation of the bingo games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.
§ 12-21-4007. Site system and electronic dabber specifications.
(A) A site system and an electronic dabber must meet the following specifications:
(1) A site system must:
(a) record a nonresetable electronic consecutive six digit receipt number for each transaction;
(b) issue a player a receipt for each transaction containing the:
(i) name of a site or organization;
(ii) date and time of transaction;
(iii) number of electronic bingo card images downloaded or activated;
(iv) selling price of a card or package, gross proceeds, and receipt number; and
(v) serial number of device issued to a player;
(c) print a summary report for each session containing:
(i) the date and time of the report;
(ii) the name of site;
(iii) the date of the session;
(iv) the sequential session number;
(v) the number of transactions;
(vi) the number of voided transactions;
(vii) the number of electronic bingo card images downloaded or activated;
(viii) the number of devices used;
(ix) the total gross proceeds; and
(x) any other information required by the department.
(2) An electronic dabber:
(a) must be a portable hand-held unit and must not be wired directly to a site system;
(b) must be used in conjunction with a bingo ticket purchased from the house which entitles the player to mark his cards electronically rather than using paper cards and marking them manually;
(c) must have no more than one hundred eighty faces to be played on each game when used in a class "B" game and no more than three hundred faces to be played on each game when used in a class "AA" game;
(d) must require a player to manually enter each bingo number called;
(e) must display a player's best card or a winning card and alert only that player through an audio or video method, or both, that the player has a winning card;
(f) must erase automatically all stored cards at the end of the last game of a session or when the device is turned off;
(g) must be downloaded or activated with new cards at the beginning of each session;
(h) must be used only for one unit for each player, at any time during the bingo session. A player may purchase additional cards to be marked manually, but not for use with an electronic dabber;
(i) must not be a video lottery machine, video gaming machine, or other device prohibited by Section 12-21-2710;
(j) must not be used or be capable of being used to play a game other than bingo as authorized by this article; and
(k) must not be used or be capable of being used in an activity prohibited by Section 16-19-40 or 16-19-50.
(B) The department's representatives may examine and inspect any site system and related equipment, electronic dabber and related equipment, or other machine or device used in the conduct of bingo by the promoter, nonprofit organization, or player. The examination and inspection must include immediate access to the electronic dabber and unlimited inspection of all parts, equipment, and associated systems.
(C) A player may exchange a defective electronic dabber for another provided a disinterested player verifies that the electronic dabber is not functioning.
(D) The bingo ticket as defined in Section 12-21-3920(3) must be perforated and allows both the player and the house to retain a copy. The ticket must be sold at face value. Only the number of faces printed on the bingo ticket may be downloaded or activated into the electronic dabber, no more or less, and at no time may bingo cards be sold for use with an electronic dabber and bingo ticket in matching face value or for any other purpose. The bingo tickets must be purchased on a bingo voucher only through a distributor licensed in this State. The bingo ticket must be torn in two along the perforation required in this subsection and the player must be given one part of the ticket and the house must retain the other part of the ticket for its books and records.
(E) After completion of each session the organization shall generate an activity report containing the number of electronic dabbers used in the session along with the house receipts for each bingo ticket sold. This report must be printed and maintained with the daily reports of the bingo session held.
§ 12-21-4009. Limitations on use of electronic or mechanical devices.
The use of an electronic or mechanical device designed for a bingo game authorized pursuant to this chapter must be limited to a bingo promoter and the promoter's employees or any other person authorized by law to conduct bingo only in order to facilitate bingo play in the location licensed for bingo play pursuant to law, and this machine must not dispense as a prize coins or currency. The operation of the bingo games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.
§ 12-21-4010. Application of Section 12-21-3930 through 12-21-3950.
The provisions of Sections 12-21-3930 through 12-21-3950 do not apply to the holder of a fair bingo license. However, the department shall prescribe a separate application form for fairs to obtain a license.
§ 12-21-4011. Indian tribe use of hardware technology.
Notwithstanding any provision of law, federally- recognized Indian tribes authorized to conduct bingo games in South Carolina may use hardwire technology for bingo play, if the hardwire technology complies with the same restrictions and meets the same requirements and testing required of electronic dabbers and site systems as provided in this chapter.
§ 12-21-4020. Classes of bingo licenses; taxes.
The following are the classes of bingo licenses:
(1) CLASS AA: An organization operating a bingo game offering prizes with a minimum payout of fifty thousand dollars a session shall obtain a Class AA bingo license at a cost of four thousand dollars. The prizes offered at any one session may not exceed two hundred fifty thousand dollars. The holder of a Class AA license may not conduct more than one bingo session a month.
(2) CLASS B: An organization operating a bingo game offering prizes, which do not exceed eight thousand dollars a session, shall obtain a Class B bingo license at a cost of one thousand dollars. The holder of a Class B license may not conduct more than five bingo sessions a week.
(3) CLASS C: An organization operating a bingo game and offering prizes of twenty dollars or less a game during a single session shall obtain a Class C bingo license at no cost. However, the organization may offer a prize in cash or merchandise of no more than one hundred fifty dollars for six jackpot games a session. The department, in its discretion, may allow certain Class C licenses to use hard bingo cards instead of the paper cards required by this article.
To qualify to play on hard cards, a bingo game conducted by a Class C license must meet the following criteria:
(a) be operated solely by volunteers;
(b) the person managing, conducting, or operating the bingo game must not be paid or otherwise be compensated and must be a designated member of the organization;
(c) remuneration, including wages or other compensation, must not be made to any individual or corporation;
(d) all equipment used to operate a game of bingo, including chairs, tables, and other equipment, must be owned by the charity;
(e) the organization may lease the building directly from the owner of the building or own the building in which the game of bingo is played. The organization may not lease or sublease the building from a person who is not the owner;
(f) the only expenses allowed to be paid from the proceeds of the game are utility bills, prizes, purchases of cards, payments for the lease of a building, purchases of equipment required to operate a game of bingo, and the charitable purposes of the organization;
(g) one hundred percent of the net proceeds from the operation of the game must be used for charitable purposes.
(4) CLASS D: A person, organization, or corporation desiring to conduct a bingo game at a fair as defined in Section 12-21-3920 and who offers prizes for each game of no more than fifty dollars in merchandise shall obtain only a temporary Class D bingo license at a cost of one hundred dollars for not more than ten days or two hundred dollars for more than ten days. The department, in its discretion, may allow certain Class D licensees to use hard bingo cards in lieu of the paper cards required by this article.
(5) CLASS E: An organization which has a game of bingo and operates exclusively by bona fide members who are residents of this State and who do so on a strictly volunteer basis and whose gross bingo proceeds do not exceed forty thousand dollars a calendar quarter, and where prizes do not exceed four thousand dollars a session shall obtain a Class E license from the department at a cost of five hundred dollars. If the gross bingo proceeds for any calendar quarter exceed thirty thousand dollars, the person or organization within ten days is required to obtain a Class B license from the department and comply with all requirements of a Class B license. The holder of a Class E license may not conduct more than one bingo session a week.
(6) CLASS F: An organization which has a game of bingo and operates exclusively by bona fide members who are residents of this State and who do so on a strictly volunteer basis and whose gross proceeds do not exceed forty thousand dollars a calendar quarter, and where prizes do not exceed four thousand dollars a session and where bingo proceeds are only used to pay the organization's utility bills, to pay charges for bingo paper, and for the charitable purpose of the organization, shall obtain a Class F license from the department at the cost of one hundred dollars. The holder of a Class F license may not conduct more than one bingo session a week.
§ 12-21-4030. Entrance fee surcharges.
(A) A promoter or organization may not impose a charge, other than as provided in subsection (B), on a player of more than the face value of each card sold to play bingo.
(B)(1) A holder of a Class AA license shall impose an entrance fee of eighteen dollars;
(2) A holder of a Class B license shall impose an entrance fee of five dollars;
(3) A holder of a Class D or Class E license may impose a five-dollar entrance fee; and
(4) A holder of a Class F license may impose a three-dollar entrance fee.
(C) The entrance fees collected pursuant to subsection (B) are not required to be remitted as taxes and are not included in gross proceeds for purposes of the prize limitations provided in Section 12-21-4000(12)(a).
§ 12-21-4040. One license per person or organization.
No nonprofit organization may hold more than one bingo license.
§ 12-21-4050. Only one organization to operate bingo per building.
Only one nonprofit organization may operate or cause the operation of bingo in a building. This section applies to all buildings regardless of ownership, of primary use, or of original use.
§ 12-21-4060. Certain persons prohibited from managing or conducting bingo.
A person who has been convicted within the last twenty years of violating a state or federal criminal statute relating to gaming or gambling, or who has been convicted of any other crime that has a sentence of two or more years, or where applicable, whose promoter's license has been revoked by the department is not permitted to manage or conduct a game or assist in any manner with the bingo operation.
§ 12-21-4070. South Carolina domicile required for license.
No license, as provided by this article, may be issued to an organization, promoter, or individual that has not been domiciled in this State for at least three years immediately preceding the license application. In the case of the organization, the organization must also have been active in this State for at least two years.
§ 12-21-4080. Promoter to turn over proceeds; member to deposit proceeds.
(A) Upon completion of the session, the promoter or the organization member representative shall deposit the gross proceeds from the session less the amount paid out as prizes into the bingo checking account. If the promoter is authorized by the organization to make the session deposit, the promoter shall deliver to the organization representative evidence that the deposit was made in a timely manner. This evidence must be furnished no later than the next business day following the day of the bingo session on which the proceeds were obtained.
(B) The representative member of the nonprofit organization shall deposit the funds into the bingo checking or savings account as described in Section 12- 21-4090. For purposes of this section, a member of the licensed nonprofit organization is any individual who holds a full membership in the organization as defined by the organization's constitution, charter, articles of incorporation or by-laws and has been a member of the organization for at least one year. The term also includes those individuals who are members of an auxiliary or recognized junior affiliate of the parent organization.
§ 12-21-4090. Bingo checking and savings accounts.
(A) The provisions of this section apply to the licensed nonprofit organization which is responsible for the special checking and savings accounts established by this section. The provisions of this section do not apply to the holder of a Class D fair bingo license.
(B) The organization shall control all deposits, transfers, and disbursements from these accounts, including the payment of compensation to the promoter and employees of the promoter or organization working the bingo games.
(C) An organization receiving an annual license to conduct bingo shall establish and maintain one regular checking account designated the "bingo account" and also may maintain an interest-bearing savings account designated the "bingo savings account". All funds derived from the conduct of bingo, less the amount awarded as cash prizes, must be deposited in the bingo account. Other funds may not be deposited in the bingo account, unless there is a deficit, and then both the organization and promoter shall deposit a loan equal to fifty percent of the deficit. Each loan deposited into the bingo checking account must be accounted for on the quarterly financial reports filed with the department. Detailed information substantiating these loans must be maintained by the organization. Deposits must be made no later than the next business day following the day of the bingo occasion on which the receipts were obtained. All accounts must be maintained in a financial institution in this State.
(D) Funds from the bingo account must be withdrawn by preprinted, consecutively-numbered checks or withdrawal slips, jointly signed by a properly authorized representative of the licensed nonprofit organization and promoter and made payable to a person or organization. Checks must be imprinted with the words "Bingo Account" and must contain the organization's bingo license number on the face of the check. There also must be noted on the face of the check or withdrawal slip the nature of the payment made. No check or slip may be made payable to "cash", "bearer", or a fictitious payee. All checks, including voided checks and slips, must be kept and accounted for.
(E) Funds received by the nonprofit organization from the department as a result of the sale of bingo cards must be deposited into a separate account and maintained separately from bingo funds and the bingo account referenced in this section.
(F) Checks drawn on the bingo account must be for one or more of the following purposes:
(1) payment of necessary and reasonable bona fide expenses incurred and paid in connection with the conduct of bingo;
(2) payment of necessary and reasonable compensation incurred and paid in connection with the conduct of bingo for personnel and promoters managing and conducting the game;
(3) disbursement of net proceeds derived from the conduct of bingo to charitable purposes or the purpose for which the organization was established;
(4) transfer of net proceeds derived from the conduct of bingo to the bingo savings account pending a disbursement to a charitable purpose.
(G) The disbursement of net proceeds on deposit in the bingo savings account to a charitable purpose must be made by transferring the intended disbursement back into the bingo account and then withdrawing the amount by a check drawn on that account as prescribed in this section.
(H) Proceeds given to a person or an organization for a charitable purpose must not be used by the donee:
(1) to pay for services rendered or materials purchased in connection with the conducting of bingo by the donor organization; or
(2) for a cause, an act, or an activity that does not constitute a charitable purpose or other purpose for which the organization was established if the activity is conducted by the donor organization.
(I) Gross proceeds derived from the conduct of bingo must not be commingled with other funds of the licensed organization.
(J) A licensed organization that has stopped conducting bingo and has unexpended bingo funds shall disburse those funds to a charitable purpose or other purposes for which the organization was established within one year after the date it ceases to conduct bingo. However, unexpended funds to be used for a building fund may be retained for this purpose. The organization shall file a report with the department showing the establishment of a building fund, the amount of money from the special account to be retained for that purpose, and other information the department may consider necessary. If the organization is identified as a fictitious charity after originally licensed, any payments due the charity revert to the general fund.
(K) Net proceeds must not be used directly or indirectly by a licensed authorized nonprofit organization to support or oppose a candidate or slate of candidates for public office, to support or oppose a measure submitted to a vote of the people, or to influence or attempt to influence legislation. The records of these accounts are available for inspection, upon demand, by the department.
§ 12-21-4100. Record keeping and reporting requirements.
(A) Each licensed nonprofit organization conducting bingo games shall submit quarterly to the department on the last day of the month following the close of the calendar quarter a report under oath containing the following information:
(1) the amount of the gross proceeds derived from the games;
(2) each item of expense incurred or paid;
(3) each item of an expenditure made or to be made, with a detailed description of the merchandise purchased or the services rendered;
(4) the net proceeds derived from the games;
(5) the use to which the proceeds have been or are to be applied;
(6) a list of prizes offered and given, with their respective values;
(7) excess proceeds as provided in Section 12-21-4000(12)(b);
(8) number of players at each session;
(9) other information considered necessary by the department.
(B) Each licensed nonprofit organization shall maintain records to substantiate the contents of each report.
(C) The department may revoke the license of an organization that fails to file the reports and information required in this article.
§ 12-21-4110. Department to administer provisions of article. The department shall perform all functions incident to the administration, collection, enforcement, and operation of the tax and regulations imposed under this article. Local law enforcement officials are authorized to enforce the hours of operation.
§ 12-21-4120. Clarification and conference requests.
An organization or a promoter seeking clarification on the play of or operation of a bingo game shall submit to the department's bingo regulatory section a written request seeking a determination as to whether or not a certain or specific action constitutes a violation. A conference may be requested upon the receipt of the clarification request. The department shall respond, in writing, to the party requesting the clarification, citing specific statutes which disqualify an action and, when applicable, citing actions that are authorized pursuant to the laws of this State. A response or any failure to respond is not grounds for estoppel nor does it grant any rights to the organization or promoter seeking a clarification. An organization or a promoter found in violation of the provisions of this article and assessed additional taxes, penalties, fines, or interest is entitled to a conference upon request.
§ 12-21-4130. Seizure of bingo equipment and cards. The department may seize bingo equipment or cards found in the possession of a promoter, a licensed nonprofit organization, or player which have been manufactured, altered, or changed in a manner so as to no longer make bingo a game of chance as defined in this article.
§ 12-21-4140. Penalties.
A penalty of up to five thousand dollars and revocation of the license at the discretion of the department may be imposed for a violation of this article. Each violation and each day in violation of a provision of this article constitutes a separate offense.
§ 12-21-4150. Posing as bingo player; unauthorized bingo supplies.
A person who poses as a bingo player or a person who conspires to have a person pose as a bingo player with the intent to defraud regular customers of the game, or a person who is using unauthorized bingo supplies, is guilty of a felony and, upon conviction, must be imprisoned not more than five years or fined not more than five thousand dollars, or both.
§ 12-21-4160. Inspection of books, papers, records, and other materials.
The department or its designated agent or representative may enter upon the premises where bingo is played or the business premises of another person and examine books, papers, records, memoranda, commodities, or other things bearing upon the amount of taxes or fees payable or the proper conduct of a game and secure from the taxpayer or other person information directly or indirectly for the enforcement of this article.
§ 12-21-4170. Compromise of criminal or civil action.
The department, in its discretion, may compromise a criminal or civil action arising under the provisions of this article either before or after prosecution has begun.
§ 12-21-4180. Collection of taxes and fees not to be stayed or prevented.
The collection of the taxes and fees imposed by this article must not be stayed or prevented by an injunction, writ, or order issued by a court or its judge.
§ 12-21-4190. Bingo card charges; distribution of revenues.
(A) The department shall charge and retain ten cents for each dollar of face value for each bingo card sold for AA, B, D, and E licenses. The department shall charge and retain five cents for each dollar of face value for each bingo card sold for an F license. The department shall charge and retain four cents for each dollar of face value for each bingo card sold for a C license.
(B) The revenue retained must be distributed as follows:
(1) twenty-six percent of the revenue must be distributed to the sponsoring charity for which the bingo cards were purchased. The department shall make the distribution to the sponsoring charity by the last day of the next month following the month the revenue was collected. Distributions under this subsection must be reduced by any delinquent debts as defined in the Setoff Debt Collection Act;
(2) seventy-four percent pursuant to Section 12-21-4200.
(C) The provisions of subsection (B) do not apply to holders of Class F licenses. The entire amount of revenue remitted pursuant to Section 12-21- 4190 by Class F licensees shall be distributed pursuant to Section 12-21- 4200.
§ 12-21-4200. Disbursement of revenues.
The first nine hundred forty-eight thousand dollars of the total revenues derived from the provisions of this article which is collected from bingo within this State must be deposited monthly in twelve equal amounts into an account in the Office of the State Treasurer and called "Division on Aging Senior Citizen Centers Permanent Improvement Fund". All interest earned on monies in the Division on Aging Senior Citizen Centers Permanent Improvement Fund must be credited to this fund. Of the remaining revenue:
(1) Seven and five one-hundredths percent of the annual revenue derived from the provisions of Section 12-21-4190(2) must be deposited with the State Treasurer to be credited to the account of the Division on Aging, Office of the Governor, but in no case shall this credit be less than six hundred thousand dollars. This amount must be allocated to each county for distribution in home community services for the elderly as follows:
(a) One-half of the funds must be divided equally among the forty-six counties.
(b) The remaining one-half must be divided based on the percentage of the county's population age sixty and above in relation to the total state population using the latest report of the United States Bureau of the Census.
The aging service providers receiving these funds must be agencies recognized by the Division on Aging, Office of the Governor and the area agencies on aging.
(2) Twenty and eight-tenths percent of the annual revenue derived from the provisions of Section 12-21-4190(2) must be deposited by the State Treasurer in a separate fund for the Department of Parks, Recreation and Tourism entitled the Parks and Recreation Development Fund. Interest earned by this fund must be added to it and credited to its various accounts in the same proportion that the annual allocation to each account bears to the total annual distribution to the fund. Unexpended amounts in the various fund accounts must be carried forward to succeeding fiscal years except as provided in Section 51-23-30. Fund proceeds must be distributed as provided in Chapter 23 of Title 51.
(3) Seventy-two and fifteen one-hundredths percent of the annual revenue derived from the provisions of Section 12-21-4190(2) must be deposited with the State Treasurer and credited to the general fund, except that the first one hundred thirty-one thousand of such revenues each year must be transferred to the Commission on Minority Affairs.
§ 12-21-4210. Sale or transfer of bingo cards.
Bingo cards may not be sold or transferred between licensed organizations, between distributors, or between manufacturers. All unused bingo cards may be returned to the department for refund and destruction. The department is required to refund only the amount retained by the department previously based on the face value of each card and does not include the manufacturer's price or transportation charges to the consignee at destination and such additional charges. If an organization operating a bingo game ceases operation within fifteen days from the purchase of the last voucher and the voucher remains outstanding, the department shall accept the returned paper and credit the value of returned paper against the outstanding voucher. The organization then shall pay the balance of the voucher less the value of returned paper.
§ 12-21-4220. Bingo card design and requirements.
Bingo cards shall meet the design and requirements of the department. The use of the cards is evidence of the payment of the license tax imposed upon bingo cards by this article.
§ 12-21-4230. Bonds.
Manufacturers, promoters, organizations, or distributors of bingo cards are required to furnish bond in an amount approved by the department to ensure faithful compliance with the regulations of the department.
§ 12-21-4240. License to manufacture, distribute or use bingo cards.
Each manufacturer, distributor, organization, or promoter must be licensed to manufacture or distribute, or use bingo cards. The department shall charge an annual license fee of five thousand dollars for each manufacturer and two thousand dollars for each distributor. A license issued by the department under this section is renewable annually unless canceled or terminated. No license issued under this section is transferable or assignable.
§ 12-21-4250. Dual roles.
A bingo card manufacturer may not be licensed to operate a game as a bingo card distributor or as a promoter. A bingo card distributor may not be a manufacturer, a licensed nonprofit organization, or promoter. A licensed nonprofit organization or a promoter may not be a manufacturer or distributor.
§ 12-21-4260. Background investigations.
A person licensed as a bingo manufacturer, distributor, organization, or promoter shall submit to a background investigation. This includes each partner of a partnership and each director and officer and all stockholders of ten percent or more in a parent or subsidiary corporation of a bingo card manufacturer, distributor, organization, or promoter. The department has sole discretion to issue a license based on the background investigation.
§ 12-21-4270. Application to obtain bingo cards.
Each licensed nonprofit organization or promoter, in the name of a licensed organization, may obtain bingo cards approved by the department by making application and remitting sixteen and one-half percent of the total face value of the cards to be purchased. Payment to the State for the issuance of bingo cards must be made by check, certified check, any electronic method, or cash within fifteen days of receipt of the application. If payment is made by check and the check is returned by the bank for any reason, the organization or promoter then is required to make payment to the department by certified funds for the remainder of the time that the bingo session is in operation. Upon receipt of the application, the department shall notify a licensed distributor who has purchased bingo cards from a licensed manufacturer that the licensed distributor may release the face value of the bingo cards requested to the licensed organization or promoter. However, no additional bingo cards must be released until payment is received for the prior application of bingo cards. The department is required to set forth procedures to ensure that there is a crosscheck between manufacturers, distributors, and licensed nonprofit organizations or promoters. A quarterly return is required by each manufacturer, distributor, and licensed nonprofit organization or promoter on or before the last day of the month following the close of the calendar quarter outlining those items the department determines necessary to verify the sale and distribution of bingo cards. The sale of bingo cards and entrance fees provided by Section 12-21-4030 are not subject to the admissions tax provided by Section 12-21-2420.
§ 12-21-4275. Prohibitions on bingo card or ticket transfers.
The transfer of a bingo card or ticket by a manufacturer or bingo ticket manufacturer to a person other than a licensed distributor is prohibited. The transfer of a bingo card or ticket by a distributor to a person other than a licensed bingo promoter or a licensed bingo nonprofit organization is prohibited. The transfer of a bingo card or ticket by a distributor to a promoter or bingo nonprofit organization that does not have a voucher covering the bingo ticket or bingo card is prohibited.
§ 12-21-4280. Revocation of license.
(A) The department may revoke a license issued under this article if it finds that a licensed nonprofit organization is not in compliance with the exemption requirements of the Internal Revenue Code.
(B) A license revoked under this section must not be reissued until a new application is made and the department determines that the applicant is complying with the applicable provisions of the Internal Revenue Code.
(C) The department may promulgate regulations to enforce this section.
§ 12-21-4295. Proceeds expended within state.
Proceeds after expenses derived from the game of bingo within South Carolina must not be expended for the benefit of charitable organizations located outside this State.
|Chuck Humphrey is available to help answer questions and analyze and structure transactions.
Copyright © 2003-2017 Chuck Humphrey, gambling-law-us.com. All Rights Reserved worldwide.
May not be copied, stored or redistributed without prior written permission.