When did RR 97-17 require a bingo promoter to hand over session proceeds, and when did the nonprofit have to deposit the proceeds and entrance fees?

Plain-English summary

South Carolina Revenue Ruling 97-17 set three timing and handling rules for bingo receipts under the statutes then in effect.

First, at the end of each bingo session, the promoter had to deliver the session's gross proceeds to the nonprofit organization's representative member after subtracting prizes and entrance fees. The representative therefore had to be at the licensed location when the session ended.

Second, the nonprofit had to deposit the proceeds, after subtracting prizes, into its bingo checking account no later than the day following the day the session began, if the bank was open to the public for substantially all of its banking functions. If it was not, the deadline moved to the next day meeting that condition. The ruling treated receipts from a session ending after midnight as received on the day the session began.

Third, entrance fees also had to reach the bingo checking account by that deadline. Although the promoter did not have to hand the entrance fees to the representative at the session's end, the fees had to be delivered to a nonprofit member other than the promoter soon enough for an authorized nonprofit member to make the timely deposit.

Common questions

Q: Could the nonprofit's representative leave before the bingo session ended? The ruling said the representative no longer had to attend the entire session, but had to be at the licensed location at the end to receive the proceeds upon completion.

Q: Which calendar day controlled the deposit deadline for a session crossing midnight? The day the session began. The ruling noted that permitted sessions ran between 1:00 p.m. and 1:00 a.m. and treated the receipts as received on the starting day.

Q: What if the next day was a holiday or the bank was closed? The deposit was due on the next day the bank was open to the public for substantially all banking functions.

Q: Were entrance fees excluded from the bingo account? No. The ruling concluded that entrance fees were funds derived from conducting bingo and had to be deposited into the bingo checking account.

Citations and references

• S.C. Code Ann. § 12-21-4080 (delivery of session proceeds)
• S.C. Code Ann. § 12-21-4090 (bingo-account control and deposit deadline)
• S.C. Code Ann. §§ 12-21-3920(6) and 12-21-4030 (session hours and entrance fees)
• S.C. Code Ann. § 36-4-104(c) (banking-day definition)

Subject

Bingo Funds Delivery to the Nonprofit’s Representative Member Deposit into the Bingo Account

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR97-17.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING # 97-17

SUBJECT:

Bingo Funds
Delivery to the Nonprofit’s Representative Member
Deposit into the Bingo Account

EFFECTIVE DATE:

Applies to all periods open under the statute.

SUPERSEDES:

All previous documents and any oral directives in conflict
herewith.

REFERENCES:

S. C. Code Ann. Section 12-21-4080 (Supp. 1996)
S. C. Code Ann. Section 12-21-4090 (Supp. 1996)
S. C. Code Ann. Section 12-21-3920 (Supp. 1996)
S. C. Code Ann. Section 36-4-104 (1976)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 1996)
SC Revenue Procedure #97-8

SCOPE:

A Revenue Ruling is the Department of Revenue's official
advisory opinion of how laws administered by the Department
are to be applied to a specific issue or a specific set of facts,
and is provided as guidance for all persons or a particular
group. It is valid and remains in effect until superseded or
modified by a change in the statute or regulations or a
subsequent court decision, Revenue Ruling or Revenue
Procedure.

Questions:
1.

When must a bingo promoter deliver the gross proceeds (less the amount paid out as
prizes and collected as entrance fees) from a bingo session to the representative
member of the nonprofit organization?

2.

When must the representative member of the nonprofit organization deposit the
gross proceeds (less the amount paid out as prizes) from a bingo session into the
bingo checking account?

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3.

Must entrance fees charged pursuant to Code Section 12-21-4030 be deposited into
the bingo checking account?

Conclusion:
1.

A bingo promoter must deliver the gross proceeds (less the amount paid out as prizes
and collected as entrance fees) from a bingo session to the representative member of
the nonprofit organization at the end of the bingo session. While the statute no
longer requires the representative member of the nonprofit organization to attend the
entire bingo session, the representative member must be at the licensed location at
the end of the bingo session in order to receive the money from the promoter “upon
completion of the session.”

2.

The representative member of the nonprofit organization must deposit the gross
proceeds (less the amount paid out as prizes) from a bingo session into the bingo
checking account no later than the day following the day the bingo session began
provided the “bank is open to the public for carrying on substantially all of its
banking functions.”

The following examples should provide some guidance:
(a) If the bingo session begins at 1:00 p.m. on Tuesday and ends at 11:00 p.m. on
Tuesday, the deposit must be made into the bingo checking account no later than
Wednesday. If Wednesday is a legal holiday on which the bank is closed, then the
deposit must be made on the next day that the bank is open.
(b) If the bingo session begins on or after 1:00 p.m. on Wednesday and ends at
1:00 a.m. on Thursday, the deposit must be made into the bingo checking account
no later than that same Thursday. If Thursday is a legal holiday on which the bank
is closed, then the deposit must be made on the next day that the bank is open.
(c) If the bingo session begins on or after 1:00 p.m. on Friday and ends at 1:00
a.m. on Saturday, the deposit must be made into the bingo checking account no
later than Saturday if the bank is open on Saturday or Monday if the bank is closed
on Saturday. If Monday is a legal holiday on which the bank is closed, then the
deposit must be made on the next day that the bank is open.
3.

Yes. The entrance fees charged at a bingo session pursuant to Code Section 12-214030 must be deposited into the bingo checking account no later than the day
following the day the bingo session began provided the “bank is open to the public
for carrying on substantially all of its banking functions.” See Conclusion #2 for
examples.

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Discussion:
Code Section 12-21-4080 reads in part:
(A) Upon completion of the session, the promoter shall deliver to the
representative member of the organization the gross proceeds from the
session less the amount paid out as prizes and collected as entrance fees.
(B) The representative member of the nonprofit organization shall deposit
the funds into the bingo checking account or savings account as described
in Section 12-21-4090. ... (Emphasis added.)
Code Section 12-21-4090 reads in part:
(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.
(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. No other funds may be deposited in the
bingo account. 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. (Emphasis added.)
In addition, Code Section 12-21-3920(6) defines “session” to mean “a consecutive series
of games which must occur only between one o’clock p.m. and one o’clock a.m. No
more than one session may occur during the permitted twelve hour period. These limits
do not apply to games operated by state or county fairs.”
The first issue concerns when a bingo promoter must deliver the gross proceeds (less the
amount paid out as prizes and collected as entrance fees) from a bingo session to the
representative member. As cited above, Code Section 12-21-4080 requires that this
money be delivered to the representative member “upon completion of the session.”
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Words used in a statute should be taken in their ordinary and popular meaning, unless
there is something in the statute which requires a different interpretation. Hughes v.
Edwards, 265 S.C. 529, 220 S.E. 2d 231; Also see Investors Premium Corp. v. South
Carolina Tax Commission, 260 S.C. 13, 193 S.E. 2d 642.
As such, a bingo promoter must deliver the gross proceeds (less the amount paid out as
prizes and collected as entrance fees) from a bingo session to the representative member
of the nonprofit organization at the end of the bingo session. While the statute no longer
requires the representative member of the nonprofit organization to attend the entire bingo
session, the representative member must be at the licensed location at the end of the bingo
session in order to receive the money from the promoter “upon completion of the
session.”
The second issue concerns when funds from a bingo session should be deposited in the
bingo checking account. The statute requires that “deposits must be made no later than
the next business day following the day of the bingo occasion on which the receipts were
obtained.”
Since the provision in question concerns the depositing of funds into an account at a
financial institution in South Carolina, the department has determined that a “business
day” means the business day of a bank. While the statutes applicable to bingo and
banking in South Carolina do not provide a definition of the term “business day,” the
Uniform Commercial Code’s provisions concerning bank deposits and collections define
a similar term.
Code Section 36-4-104(c) of the Uniform Commercial Code defines the term “banking
day” to mean:
that part of any day on which a bank is open to the public for carrying on
substantially all of its banking functions.
Therefore, the funds from a bingo session must be deposited by the next “part of any day
on which a bank is open to the public for carrying on substantially all of its banking
functions.”
In addition, the statute states that “deposits must be made no later than the next business
day following the day of the bingo occasion on which the receipts were obtained.”
(Emphasis added.) Since the bingo session can only occur between one o’clock p.m. and
one o’clock a.m., the receipts from the bingo occasion will be considered received on the
day the bingo session began. This is consistent with the above definition of banking day.
Eleven of the twelve hours permitted for conducting a bingo session are in the day the
bingo session began. Only one hour of the twelve hours permitted for conducting a bingo
session are in the day the bingo session ends. As such, an absurd conclusion would result
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if the “day of the bingo occasion” was considered to be the day the session ended. We do
not believe it was the intention of the General Assembly that a nonprofit organization
should wait until Monday to deposit the funds from a bingo session beginning at 1:00
p.m. on Thursday and ending at 1:00 a.m. on Friday. Requiring such an organization to
deposit the funds on Friday complies with the intent the Bingo Act of 1996 to better and
more closely regulate bingo. “A statute subject to interpretation is presumed not to have
been intended to produce absurd consequences, but to have the most reasonable operation
that its language permits. If possible, doubtful provisions should be given a reasonable,
rational, sensible, and intelligent construction. These rules prevail where they are not
restrained by the clear language of the statute. Under this rule, general terms in a statute
should be so limited in their application as not to lead to absurd consequences.” 73 Am.
Jur.2D Statutes Section 265.
The third issue concerns the entrance fees charged pursuant to Code Section 12-21-4030
and whether such fees should be deposited into the bingo checking account.
Code Section 12-21-4030 reads:
(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 an entrance fee of
five dollars. The entrance fees collected are not required to be remitted as
taxes and are not included in gross proceeds for purposes of the prize
limitation provided in Section 12-21-4000(12)(a).
Based on this section, the entrance fee is imposed by the nonprofit organization; and
therefore, is revenue of the nonprofit organization.
Code Section 12-21-4080(A) reads:
Upon completion of the session, the promoter shall deliver to the
representative member of the organization the gross proceeds from the
session less the amount paid out as prizes and collected as entrance fees.
(Emphasis added.)

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However, Code Section 12-21-4090(C) reads:
(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. No other funds may be deposited in the
bingo account. 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. (Emphasis added.)
In Beaty v. Richardson, 56 S.C. 173, 180, 34 S.E. 73, 76 (1899), the Court stated the rule
as follows: "The legislature must have intended to mean what it has plainly expressed,
and consequently there is no room for construction...Where the words of a statute are
plainly expressive of an intent, not rendered dubious by the context, the interpretation
must conform to and carry out that intent. It matters not, in such a case, what the
consequences may be."
Based on the above, entrance fees must be deposited into the bingo checking account.
And while the bingo promoter is not required to deliver the entrance fees from a bingo
session to the representative member of the nonprofit organization at the end of the bingo
session, such entrance fees, in accordance with Code Section 12-21-4090(C), must be
deposited into the bingo checking account no later than the day following the day the
bingo session began provided the “bank is open to the public for carrying on substantially
all of its banking functions.” See the discussion of second issue beginning on page 4 for
information concerning when deposits must be made.
However, the entrance fee must be delivered to a member of the nonprofit organization
(other than the promoter) within a reasonable time so that an authorized member of the
nonprofit organization (other than the promoter) can deposit the entrance fees into the
bingo checking account within the time required by the statute.

SOUTH CAROLINA DEPARTMENT OF REVENUE
s/Burnet R. Maybank III

Burnet R. Maybank, III, Director
Columbia, South Carolina
November 3
, 1997
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