What design, sale, approval, and recordkeeping standards did South Carolina set for electronic bingo tickets?

Plain-English summary

South Carolina Revenue Ruling #04-11 set control standards for the two-part tickets used with electronic bingo devices. The tickets served both as authorization for electronic faces and as evidence that bingo tax had been paid.

Each ticket had to be perforated so the player and bingo hall retained matching portions. Both portions needed a sequential serial number, state seal, face value, number of faces, organization license number, nonprofit name, game name, and spaces for the sale date and device number. The ruling also required the words “Electronic Bingo Ticket” and identified which portion belonged to the player or hall.

Tickets had to be sold at face value, in Department-approved denominations, through the licensed manufacturer-distributor-operator chain and the voucher system. The number of electronic faces activated had to match the ticket. Ticket designs and later design changes required Department approval.

What this means for you

Bingo organizations and promoters

The ticket, device receipt, activated faces, amount paid, game name, sale date, and electronic-unit serial number all had to agree. The player kept one portion during play and the hall retained the other for its records.

Ticket manufacturers and distributors

The ruling required unique controlled serial-number lots and restricted transfers to licensed participants with the required voucher. Ticket numbers could not be reused unless the Department directed otherwise.

Compliance professionals

RR 14-3 later covered printed bingo paper separately and still pointed to RR 04-11 for nonprinted electronic-bingo tickets. Current technology and statutory requirements nevertheless require fresh verification.

Common questions

Q: Could an electronic bingo ticket be a single-part receipt?
A: No. The ruling required a perforated two-part ticket, with one part for the player and one for the hall.

Q: Could the system activate a different number of faces than the ticket showed?
A: No. The number activated had to match the number printed or specifically designated on the approved ticket.

Q: Did ticket designs require approval?
A: Yes. The initial design and later changes required Department approval before use.

Q: Could manufacturers sell directly to bingo organizations?
A: No. The ruling described a licensed chain from ticket manufacturer to distributor to licensed promoter or nonprofit organization, supported by a voucher.

Citations and references

• S.C. Code Ann. § 12-21-4007 — electronic bingo and ticket requirements
• S.C. Code Ann. § 12-21-3920(3) — card and ticket definition
• S.C. Code Ann. § 12-21-4220 — Department design authority
• S.C. Code Ann. § 12-21-3935 — video-poker prohibition
• S.C. Code Ann. § 12-21-4275 — licensed transfer chain and vouchers
• SC Revenue Ruling 14-3 — later printed-bingo-paper standards that identify RR 04-11 as the electronic-ticket guidance

Source

• Landing page: SC Advisory Opinion Search
• Original PDF: RR04-11.pdf
• Official later RR 14-3 PDF: RR14-3.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org

SC REVENUE RULING #04-11

SUBJECT:

Bingo Ticket Standards
(Bingo Tax)

EFFECTIVE DATE:

July 18, 2004

SUPERSEDES:

All previous advisory opinions and any oral directives in conflict
herewith.

REFERENCES:

S. C. Code Ann. Section 12-21-4007 (Enacted January, 2004 – House
Bill 3986.)
S. C. Code Ann. Section 12-21-3920(3) (Amended January, 2004 –
House Bill 3986.)
S. C. Code Ann. Section 12-21-4220 (Supp. 2000)
S. C. Code Ann. Section 12-21-3935 (Amended January, 2004 – House
Bill 3986.)
S. C. Code Ann. Section 12-21-4275 (Amended January, 2004 – House
Bill 3986.)

AUTHORITY:

S. C. Code Ann. Section 12-4-320 (Supp. 2000)
S. C. Code Ann. Section 1-23-10(4) (Supp.2002)
SC Revenue Procedure #03-1

SCOPE:

The purpose of a Revenue Ruling is to provide guidance to the public
and to Department personnel. It is a written statement issued to apply
principles of tax law to a specific set of facts or a general category of
taxpayers. A Revenue Ruling is an advisory opinion; it does not have
the force or effect of law and is not binding on the public. It is,
however, the Department’s position and is binding on agency personnel
until superseded or modified by a change in statute, regulation, court
decision, or advisory opinion.

BINGO TICKET STANDARDS
Law:
The Bingo Tax Act of 1996 requires the Department of Revenue to set bingo paper standards and
bingo ticket standards. Bingo paper and bingo tickets are critical to the administration of the
Bingo Tax Act, as both bingo paper and bingo tickets are evidence of the payment of the bingo
tax.

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SC Revenue Ruling #99-13 establishes the standards for bingo paper. This advisory opinion will
establish the standards for bingo tickets. Bingo tickets are used in conjunction with the conduct
of electronic bingo.
Code Section 12-21-4007 sets the standards for the computer system, electronic dabber, and
bingo tickets used in electronic bingo. Code Section 12-21-3920(3) defines the term “card” to
include a bingo ticket, and reads:
'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. (Emphasis added.)
Code Section 12-21-4007(D) states:
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.

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Code Section 12-21-4220 establishes the Department’s authority with respect to design and
requirements of bingo cards, which by statute includes bingo tickets, and reads:
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.
Code Section 12-21-3935 states:
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.
Code Section 12-21-4275 states:
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.
Accordingly, the Department has considered the following in establishing the bingo ticket
standards:

1. Bingo tickets and the use of electronic bingo must meet all requirements established
   by law and regulation;
2. Bingo tickets must meet the design and requirements of the Department of Revenue;
3. Bingo tickets must be used in conjunction with the play of electronic bingo devices
   and must be purchased by the player from the house;
4. Nothing in the bingo law may be construed to allow video poker play. The
   prohibitions regarding video poker in Sections 12-21-2710, 16-19-40, and 16-19-50
   apply to bingo; and
5. The transfer of a bingo ticket by a bingo ticket manufacturer to a person other than a
   licensed distributor is prohibited. The transfer of a bingo 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 ticket by a distributor to a promoter
   or bingo nonprofit organization that does not have a voucher covering the bingo ticket
   is prohibited.

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Bingo Ticket Standards:
(A) The Department has established the following standards, in addition to the requirements
established by the bingo law, for the manufacture and use of bingo tickets in South Carolina:

1. Bingo tickets must be perforated with the player receiving the portion of the ticket designated
   as the player’s portion and the house retaining the portion designated as the bingo hall
   portion.
2. Bingo tickets must have pre-printed on both the house and the player portions of the tickets
   the following information: a sequential ticket serial number, the South Carolina state seal,
   the face value of the paper purchased by the player, the number of faces purchased by the
   player, the Department of Revenue issued organization license number, the name of the
   nonprofit organization conducting the bingo games, the name of the bingo game, a blank line
   designated for the date sold and a blank line designated for the electronic unit number
   supplied to the player. Additionally, if the bingo is operating under a class “AA”, “B” or “C”
   bingo license, the tickets must also have pre-printed on them the letter designating the class
   of bingo game operated by the non-profit organization.
   (i)
   The Department will allow a range of faces to be printed on the bingo tickets only
   if the ticket provides a method for designating the exact number of faces that are
   authorized to be downloaded and received by the player. Any ticket using a range of
   faces with a method for designating the exact number of faces must be specifically
   approved by the Department. If such a method is approved by the Department and the
   house fails to designate the exact number of faces using this method, the Department will
   issue a regulatory violation for failure to comply with the specific requirement of the
   statutes that the bingo ticket must bear the number of faces authorized for play.
   (ii)
   The “unit number” to be entered on the bingo ticket is the manufacturer’s serial
   number. On the portable devices, this serial number is found on the hand held electronic
   device issued to the player. This is referenced in Section 12-21-4007(A)(1)(b) which
   states that “a site system must issue a player a receipt for each transaction containing the
   following:…..(v) serial number of device issued to a player.”
   (iii) To satisfy the statutory requirements that the tickets reflect the date and the
   electronic unit number supplied to the player, the Department will allow the receipt to be
   attached to the player portion of the ticket if the following procedure is adhered to. The
   bingo ticket must be torn at the perforation and the receipt must be stapled to the bingo
   ticket in the player’s presence at the time of purchase. Likewise, the house may attach a
   duplicate of the player’s receipt (house receipt) to the house portion of the bingo ticket in
   lieu of filling in the blanks for the date sold and unit number supplied. The house receipt
   must also be attached at the time of purchase. The receipts (player and house) must
   accurately reflect the date of the purchase and the serial number of the hand held device
   given to such player. This procedure also applies to bingo tickets for bingo play using
   hardwire technology as allowed by S.C. Code Ann. Section 12-21-4011.

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3. Bingo tickets shall be sold in denominations approved by the Department.

4. Bingo tickets must have the words “Electronic Bingo Ticket” pre-printed on both the house
   and the player portions of the tickets.
5. Bingo tickets will be approved through the voucher system and sold in lots of 100 or any
   other lot as determined by the Department with the number of lots available for purchase
   unlimited per voucher. Bingo tickets must have a unique 8 digit serial number pre-printed on
   each portion of the ticket. Ticket serial numbers must fall within a range of numbers
   provided by the Department to each bingo ticket manufacturer. Ticket serial numbers cannot
   be reused or recycled unless otherwise directed by the Department. Each ticket in the lot
   shall bear sequential serial numbers without duplicates or voids. The range of serial numbers
   within a single lot shall begin with a number ending in ‘00’ and shall end with a number
   ending in ‘99’. The serial numbers within each lot shall be selected in such a way that the
   first 6 digits of each number, considered the “lot number” are identical. Bingo tickets must
   have the correct ticket serial number pre-printed on both the house and player portions of the
   tickets. The pre-designated lot number will be reflected on the voucher submitted by the
   non-profit organization or its representative.
   The definitions of the terms used in the preceding paragraph are as follows:
   Ticket serial number – a unique 8 digit number printed on each portion of a bingo ticket.
   Lot number – the first 6 digits of the ticket serial number that serves as a unique method of
   identifying a specific lot of bingo tickets.
   Ticket lot – a group of 100 tickets bearing sequential ticket serial numbers with identical lot
   numbers.
   The following is an example range of ticket serial numbers for a lot:
   Lot #

[123456]00

Lot #

[123456]99

Ticket serial #

Ticket serial #

6. The bottom of the player portion of the bingo ticket must bear the following language in a
   readable type or font: “South Carolina law requires this ticket to be issued with each
   electronic bingo device. This ticket is valid only for use on the date indicated above or on
   the attached receipt. The information on this ticket and the bingo receipt must match the
   actual package price paid, number of faces received, and the name of the bingo game. Please
   report any inconsistencies to the Department of Revenue Bingo Enforcement Unit at (803)
   898-5393.”
7. The house portion of the ticket must state “Bingo Hall Portion” and the player portion of the
   ticket must state “Player must retain this portion during play.”

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8. The design of a nonprofit organization’s bingo ticket must be approved by the Department
prior to its use. Any subsequent changes in the design must also be approved by the
Department prior to the use of the new design. As part of the approval process, the nonprofit
organization, or the bingo ticket manufacturer, must demonstrate to the Department that the
design and manufacture of the bingo ticket meets all requirements of the statute, regulations
and this advisory opinion. The original approval of any bingo ticket will be for a provisional
period to be determined by the Department. If, during the provisional period, the ticket does
not adequately allow the Department to monitor and audit the bingo tax or the use of the
ticket, the approval of the bingo ticket will be withdrawn or alterations to the ticket required.
(B) The Department, at its discretion, may require one or more of the following standards in the
future. The requirement to follow any of these additional standards will be determined by the
Department’s Regulatory Division upon consultation with the Department Director. These
additional standards may only be implemented on a prospective basis after notification by letter
is provided by the Regulatory Division to bingo ticket manufacturers, bingo ticket distributors,
and the promoters and nonprofit organizations conducting electronic bingo.

1. The Department may require that bingo tickets be printed on tamper resistant paper and/or
   pursuant to tamper resistant printing processes. The type of paper and printing processes can
   be determined at the discretion of the Department. An example of this process may be the
   use of paper that, if copied, will display that the copy is an “unauthorized copy.”
2. The Department may designate a series of letters, numbers and/or symbols to be pre-printed
   on the bingo tickets and changed periodically at the discretion of the Department.
3. The Department may designate an account number assigned by the Department to each
   charity and/or promoter to be pre-printed on the bingo tickets. These numbers may be in
   addition to the license number assigned by the Department.
4. The Department may designate the size of the tickets and the type of paper used in the
   printing of the bingo tickets.
5. Bingo tickets may be required to bear a watermark seal, a fluorescent design, and/or
   embossing as designated by the Department and subject to change at the discretion of the
   Department.
6. The Department may require at its discretion any other information not listed above, such as
   a bar code or voucher number, to be pre-printed on the bingo ticket if the information will
   assist the Department in auditing the sale, payment of tax, and subsequent use of such tickets.
   SOUTH CAROLINA DEPARTMENT OF REVENUE
   s/Burnet R. Maybank III
   Burnet R. Maybank III, Director
   May 24
   , 2004
   Columbia, South Carolina

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