June 26, 1989
Mr. Daniel J. Todd
Walworth County State's Attorney
P.O. Box 9
Mobridge, South Dakota 57601
OFFICIAL OPINION NO. 89-20
Bingo games
Dear Mr. Todd:
You have requested an official opinion from this Office in regard to the following facts:
FACTS:
Mobridge Country Club, Inc. is a non-profit corporation organized primarily to provide golfing to those interested in becoming club members.
The Mobridge Country Club staff and other individuals in the Mobridge community and in Walworth County believe that the Country Club constitutes either an educational organization or a local civic or service club under the language of SDCL 22-25-25(1) and thus feel that it may properly, under state law, conduct bingo games.
Based upon the foregoing, you present the following questions:
QUESTIONS:
1. Is the Mobridge Country Club an organization or club qualified under SDCL 22-25-25 to conduct bingo games?
2. If the Country Club is not allowed to conduct bingo games under SDCL 22-25-25 may it lease any of its facilities to a separate organization or club that is qualified under state law to conduct bingo games?
3. If the Country Club may enter into a lease of facilities, under what terms and conditions will the bingo operation be legal?
BACKGROUND:
Your questions require a review of both Art. III, 25 of the South Dakota Constitution and SDCL 22-25-25. Art. III, 25 provides in pertinent part:
The Legislature shall not authorize any game of chance, lottery or gift enterprise, under any pretense, or for any purpose whatever provided, however, it shall be lawful for the Legislature to authorize by law, bona fide veterans, charitable, educational, religious or fraternal organizations, civic and service clubs, volunteer fire departments or such other public spirited organizations as it may recognize, to conduct games of chance when the entire net proceeds of such games of chance are to be devoted to educational, charitable, patriotic, religious or other public spirited uses.
SDCL 22-25-25 enacted under the authority of Art. III, 25 sets forth specifically the types of and conditions under which bingo and lottery may be conducted by certain charitable related entities. The statute as amended by the 1989 Legislature provides:
The game "bingo" as defined in 22-25-23 or lottery as defined in 22-25-24 may not be construed as gambling or as a lottery within the meaning of 22-25-1, provided that:
(1) The bingo game or lottery is conducted by a bona fide congressionally chartered veterans organization, or a religious, charitable, educational, or fraternal organization, local civic or service club, political party or volunteer fire department or political committee on behalf of a candidate for a political office which exists under the laws of the state of South Dakota;
(2) The proceeds therefrom do not inure to the benefit of any individual;
(3) No separate organization or professional person is employed to conduct the bingo game or lottery or assist therein;
(4) No compensation of any kind in excess of thirty dollars in value is paid to any person for services rendered during any bingo session in connection with the conduct of the bingo game or in consideration of any lottery. However, the provisions of this subdivision do not apply to games or lotteries conducted in connection with any of the following events: a county fair conducted pursuant to 7-27-3, the state fair conducted pursuant to chapter 1-21, or a civic celebration recognized by resolution or other similar official action of the governing body of a county, city, town, or village;
(5) No prize in excess of two thousand dollars is awarded at any one play of bingo and no lottery prize is in excess of eighteen thousand dollars in value. However, a lottery prize of eighteen thousand dollars or less in value may also be given to a person who sells a winning lottery ticket or share as long as the winning lottery ticket or share is selected at random;
(6) The organizations authorized under subdivision (1) of this section, before conducting a bingo game or lottery give thirty days' written notice of the time and place thereof to the governing body of the county or municipality in which it intends to conduct the bingo game or lottery, and the governing body does not pass a resolution objecting thereto. However, any organization that conducts a lottery and tickets or shares for such lottery are sold state-wide shall provide written notice of such lottery pursuant to this subdivision only to the secretary of state and to the governing body where the drawing for such lottery is held. A municipality pursuant to 9-29-5 may by ordinance prohibit within the municipality the sale of lottery tickets or shares for such lottery issued pursuant to 22-25-25; and
(7) No organization authorized to conduct a bingo game or lottery under subdivision (1) of this section may enter into any lease or agreement with any other person or organization to provide equipment or services associated with the conduct of a bingo game or lottery. However, this subdivision does not apply to any lease or agreement with a distributor licensed pursuant to 22-25-28 to 22-25-51, inclusive, to provide bingo or lottery equipment and supplies.
IN RE QUESTION NO. 1:
You first question is whether the Mobridge Country Club is an organization or a club qualified under state law to conduct bingo games. Reference is made to the contentions of others in the Mobridge area that the Country Club may properly be considered under SDCL 22-25-25(1) either an "educational" organization or "local civic or service club."
SDCL 22-25-25(1), as previously cited, requires that the bingo game or lottery be conducted by a "bona fide congressionally chartered veterans organization, or a religious, charitable, educational, or fraternal organization, local civic or service club, political party or volunteer fire department or political committee on behalf of a candidate for political office. . . ."
On careful consideration of the foregoing language, I cannot conclude that the Mobridge Country Club is an organization qualified to conduct bingo games or lotteries pursuant to and in accordance with the other provisions of SDCL 22-25-25. The club may not, in my opinion, fairly be considered an educational organization or a local civic or service club, nor does it fall within any of the other classes of organizations listed in statute.
A similar question was addressed in the New Jersey case of Allendale Field and Stream Association v. Legalized Games of Chance Control Commission, 195 A.2d 620 (N.J. 1963). The New Jersey Constitution provided generally, as does our State Constitution, for the limited operation of particular games of chance by certain charitable type institutions. The entities allowed to sponsor limited gaming were "bona fide veterans, charitable, educational, religious or fraternal organizations, civic and service clubs, volunteer fire companies and first aide or rescue squads." Id. at 621. In Allendale, the Allendale Field and Stream Association made application to the State's Gaming Control Commission for preliminary approval to conduct a raffle under the State's charitable gaming laws. The Control Commission determined that the Association was not an organization qualified under the State's charitable gaming laws to conduct a raffle and denied approval. Through the appeal process the New Jersey Supreme Court was presented specifically with the question of whether the Allendale Field and Stream Association was a "charitable" or "educational" organization or a "civic or service club."
Despite the fact that the Association had engaged in certain activities that in isolation could be considered charitable, the court found that it remained primarily a recreational association which like many other social clubs only incidentally sponsored activities that furthered interest beyond those of the membership alone. Thus, it could not "claim the stamp of a `charitable' organization." Id. at 625.
Nor was the Association recognized by the court as an "educational" organization simply because it offered instruction in the handling of weapons to novices interested in hunting. In the court's words "Apart from the doubtful educational quality of such instruction in the sense intended by the Constitution, it is a fringe activity which cannot obscure the main attraction of the Association--good hunting for its members." Id.
Further, the Association could not, in the court's view, claim the status of a "civic or service club." The court agreed with the Control Commission that those terms comprehended organizations such as Rotary or Kiwanis. Without arriving at a precise definition, the court stated, "We think it enough to say that service to the civic welfare must be central to the reason for the organization's being, and thus measured, Allendale falls quite short." Id. at 625.
The court concluded, generally, that the Association did not fall within any of the named groups but that it rather "was a private hunting club operated primarily for the pleasure of its membership." Id. at 625.
Based upon the information provided and my knowledge of the purposes for which country clubs are established, I cannot conclude that the Mobridge Country Club is an "educational" organization or a "civic or service club" under our charitable gaming laws. The Country Club may offer instruction in certain recreational activities, but that alone does not, in my opinion, make it an "educational" organization under SDCL 22-25-25. Moreover, although the Club through its recreational facilities and sponsored activities may indirectly provide some benefit to the Mobridge community as a whole, it may not, solely on that basis, claim that it is a "local civic or service club."
A "civic enterprise" is defined in Black's Law Dictionary 222 (5th Ed. 1979) as "a project or undertaking in which citizens of a city cooperate to promote the common good and general welfare of the people of the city." Without a doubt, the Mobridge Country Club's primary concern and focus is the club membership. It simply cannot be said that it was formed to further a community based civic or service purpose. Its purpose as expressly stated in its Articles of Incorporation is to "encourage, foster and promote outdoor activities in forms of recreation, to operate and maintain a Country Club and golf course as the center of recreation for its members and for such other activities as tennis, shooting, boating and such other activities and kinds of amusement and entertainment as will contribute to the social, physical, mental and moral welfare and well-being of the members of the club and guests of the members. . . ."
Based on the foregoing, my answer to your first question is No. The Mobridge Country Club is not an organization or club qualified under SDCL 22-25-25 to conduct bingo games.
IN RE QUESTION NO. 2:
In answering your second question I first refer you to Attorney General's Opinion 88-01. In that Opinion I concluded that under the language of SDCL 22-25-25, as it then existed, a qualified organization could lease or rent facilities and equipment from a nonqualified person or organization to conduct a bingo game which would otherwise comply with SDCL 22-25-25. I also determined that the cost incurred by any qualifying organization for any such facilities or equipment had to be reasonable. The Opinion holds that "to find that an organization cannot rent facilities and equipment would limit bingo operations to organizations which currently have buildings large enough to house bingo games or ones which financially have the ability to purchase a building. Neither the South Dakota Constitution nor statutes imply such an intention."
Since issuance of Opinion 88-01, SDCL 22-25-25(7) has been enacted. That subsection provides:
No organization authorized to conduct a bingo game or lottery under subdivision (1) of this section may enter into any lease or agreement with any other person or organization to provide equipment or services associated with the conduct of a bingo game or lottery. However, this subdivision does not apply to any lease or agreement with a distributor licensed pursuant to 22-25-28 to 22-25-51, inclusive, to provide bingo or lottery equipment and supplies.
Under the amended language, it is clear that a qualified organization cannot now enter into a lease with any other person or organization for the provision of equipment or facilities normally associated with a bingo game operation. A qualifying organization is now expressly prohibited from leasing or renting any equipment that is "associated with the conduct of a bingo game."
The new subsection does not, however, in my opinion, extend to prohibit the leasing of buildings or rooms for space to conduct bingo games or the leasing of other necessities such as tables and chairs, etc. Facilities not normally viewed as "bingo equipment" may, it appears, still be leased by qualified organizations from nonqualified persons or organizations.
Accordingly, my answer to your second question is Yes. The Mobridge Country Club may lease at least some of its facilities to a qualified organization intending to set up a bingo operation. It may not however lease any equipment associated with the conduct of a bingo game.
IN RE QUESTION NO. 3:
In response to your third question I would simply refer you to the other remaining provisions of SDCL 22-25-25, specifically subsections 2, 3, and 4, and the references made thereto in Official Opinion 88-01. Subsection (2) prohibits "proceeds inuring" to any "individual." Subsection (3) prohibits the hiring of a separate organization or person to "conduct" the game or to "assist therein." Finally, subsection (4) limits the compensation of any person for "services rendered" in connection with a bingo session or lottery to $30.
The Mobridge Country Club in leasing any of its facilities must obviously steer clear of violating any of the above provisions.
Respectfully submitted,
ROGER A. TELLINGHUISEN
ATTORNEY GENERAL
RAT:do
