DocketNumber: 02AP-586 (REGULAR CALENDAR)
Judges: PETREE, P.J.
Filed Date: 4/17/2003
Status: Non-Precedential
Modified Date: 7/6/2016
{¶ 2} According to information contained in two "Enforcement Investigative Report[s]" filed by agents of the Ohio Department of Public Safety ("ODPS"), an 11-month investigation conducted by ODPS, the Cincinnati Police Department and the Hamilton County Sheriff's Office revealed that an entity known as Child Care Foundation, Inc. ("Child Care") had been operating under the guise of a 501(C)(3) charity in the Cincinnati area and had been distributing tip tickets1 to liquor permit holders through a group named Kelly Distributing. According to the report, Child Care and the permit holders would split the proceeds from the sale of tip tickets without the charity receiving the proper monies. Under the scheme, the permit holder would receive two boxes of tip tickets. The first box would be sold with the profits being returned to Child Care. The second box would be sold to the permit holder for a fee. The tip tickets in the second box would be sold under the guise of the charity, with the permit holder retaining the profits. Investigators compiled a list of permit premises that were distributing tip tickets under Child Care. Vince's Other Place, an establishment owned by appellee, was one of the permit premises under investigation.
{¶ 3} On October 24, 2000, ODPS agents entered appellee's permit premises. The agents observed four plastic containers on the bar that contained tip tickets and a sign posted on the wall behind the bar that read "Child Care Foundation." One of the agents purchased four tip tickets from the barmaid, none of which were winning tickets.
{¶ 4} On November 29, 2000, ODPS agents conducted an administrative search of the permit premises. Under the bar, the agents found a clipboard to which an envelope containing $60 and two football pool sheets were attached. The agents also observed four plastic bins containing tip tickets behind the bar. Behind the plastic bins was a sign advertising the sale of the tip tickets. In addition, the agents found a small black box containing cash in the safe behind the bar. According to the barmaid, the cash in the box was from the sale of tip tickets. The agents also found several "Instant Control" sheets, which are used to record the tip tickets given to the permit holder and the profits due the charity. The "Instant Control" sheets documented that appellee had been selling tip tickets since January 2000 and projected profits of $7,492 due the charity between October 3 and November 9, 2000. During the course of the investigation, Don Varner, one of appellee's sales representatives, was interviewed. Mr. Varner stated that appellee received a second box of tip tickets which was given in return for selling the first box. He further stated that the tip-ticket scheme entailed appellee returning the profits from the first box to the charity and retaining the profits from the second box.
{¶ 5} The agents' investigative report from the October 24, 2000 incident contained the following note: "All of the tip tickets function as a scheme of chance. All of the tip tickets had a one-dollar purchase price, odds of winning, and prize amounts printed on the front of the tickets." A document attached to each of the investigative reports described tip tickets as follows:
{¶ 6} "Tip tickets regardless of type are cashed in through the bartender or barmaid. They are purchased in an assortment with a predetermined payoff. Once all the tickets are purchased a guaranteed profit is made compared to the payoffs combined."
{¶ 7} As a result of the investigations, two violation notices were issued to appellee. The first notice alleged the following violation:
{¶ 8} "Violation #1: On or about October 24, 2000, you and/or employee and/or your agent PEGGY HYNE and/or VINCENT A. VALENTINO, and/or your unidentified agent and/or employee did permit and/or allow in and upon the permit premises, gaming or wagering on a game and/or scheme of skill and/or chance, to wit, tip tickets, in violation of Regulation 4301.1-1-53, Ohio Admin. Code."
{¶ 9} The second notice alleged the following two violations:
{¶ 10} "Violation #1: On or about November 29, 2000, you and/or employee and/or your agent PEGGY HYNE and/or VINCENT A. VALENTINO, and/or your unidentified agent and/or employee did permit and/or allow in and upon the permit premises, gaming or wagering on a game and/or scheme of skill and/or chance, to wit, tip tickets, in violation of Regulation 4301.1-1-53, Ohio Admin. Code.
{¶ 11} "Violation #2: On or about November 29, 2000, you and/or employee and/or your agent PEGGY HYNE and/or VINCENT A. VALENTINO, and/or your unidentified agent and/or employee did permit and/or allow in and upon the permit premises, gaming or wagering on a game and/or scheme of skill and/or chance, to wit, sports-block pool (football), in violation of Regulation 4301.1-1-53, Ohio Admin. Code."
{¶ 12} The commission conducted a hearing on the violations on June 20, 2001, at which time appellee denied the violations but stipulated to the investigative reports and the facts contained in them concerning the alleged violations. James Nerswick, an ODPS agent, was the sole witness at the hearing. Agent Nerswick reiterated the information contained in the investigative reports. Appellee offered no evidence to dispute either the investigative reports or Agent Nerswick's testimony.
{¶ 13} In two separate orders dated July 10, 2001, the commission found appellee in violation of Ohio Adm. Code
{¶ 14} "The common pleas court abused its discretion and erred to the prejudice of the Liquor Control Commission when it ruled the order of the Liquor Control Commission finding appellant-appellee Vincent Valentino in violation of gambling on its liquor permit premises was not supported by sufficient evidence."
{¶ 15} In Big Bob's Inc. v. Ohio Liquor Control Comm. (2003),
{¶ 16} "Under R.C.
{¶ 17} "The common pleas court's `review of the administrative record is neither a trial de novo nor an appeal on questions of law only, but a hybrid review in which the court "must appraise all the evidence as to the credibility of the witnesses, the probative character of the evidence, and the weight thereof." ' Lies v. Veterinary Med. Bd. (1981),
{¶ 18} "An appellate court's review of an administrative decision is more limited that that of a common pleas court. Pons v. Ohio State Med. Bd. (1993),
{¶ 19} Ohio Adm. Code
{¶ 20} In paragraphs one and two of the syllabus of VFW Post 8586 v. Ohio Liquor Control Comm. (1998),
{¶ 21} Pursuant to R.C.
{¶ 22} "No person shall do any of the following:
{¶ 23} "* * *
{¶ 24} "(2) Establish, promote, or operate or knowingly engage in conduct that facilitates any scheme or game of chance conducted for profit[.]"
{¶ 25} In reversing the commission's order, the court of common pleas concluded that: (1) there was no evidence in the record that appellee knowingly violated Ohio Adm. Code
{¶ 26} "Because a tip ticket represents a chance in a scheme in which a participant gives valuable consideration for a chance to win a prize, a tip ticket is a `gambling device' pursuant to R.C.
{¶ 27} We first find that the trial court erroneously concluded that the commission was required to establish that appellee knowingly violated Ohio Adm. Code
{¶ 28} "Not all of the gambling offenses listed in R.C.
{¶ 29} "The stipulated evidence demonstrates that appellee promoted or operated a scheme of chance. A sign accompanying the tip-tickets advertised that they were being sold on behalf of Child Care, and the investigative report detailed how the barmaid offered the tip-tickets for sale. Under these circumstances, appellant was not required to establish that appellee knowingly violated the administrative code." Id. at ¶¶ 17 and 18.
{¶ 30} Second, the undisputed evidence presented by stipulation contradicts the trial court's determination that no evidence established that appellee either sold tip tickets or profited from their sale. The record contains direct evidence to support a finding that tip tickets were being sold on the permit premises. The investigative report filed pursuant to the October 24, 2000 incident stated that ODPS agents purchased and opened four tip tickets on the permit premises. Moreover, the record reflects that during the course of their investigation, ODPS agents observed containers of tip tickets, a sign promoting the sale of tip tickets, and "Instant Control" sheets. Such evidence supports the inference that tip tickets were sold on the permit premises. See VFW Post 7262 v. Ohio Liquor Control Comm. (May 15, 1998), Montgomery App. No. 97 CA 1458.
{¶ 31} Further, the record contains evidence demonstrating that appellee profited from the sale of tip tickets. Initially, we note that this court has held that actual profit need not be shown in order to establish a violation of Ohio Adm. Code
{¶ 32} Here, the profit element was established by proof of income from the sale of tip tickets. On their October 24, 2000 visit, the agents purchased four $1 tip tickets; none were winning tickets. From that $4 outlay, appellee received income in the amount of $4. Further, appellee stipulated that the money found behind the bar was income from the sale of tip tickets. See Loom Lodge 2156 Northfield, supra, at ¶ 15. Moreover, the "Instant Control" sheets documented that appellee received income of $7,492 from sale of tip tickets during the months of October and November 2000. See Weller at ¶ 9. In addition, appellee also stipulated to the ODPS investigative reports which stated that tip tickets are produced in such a way as to guarantee profit. In both Temple and Loom Lodge 2156 Northfield, this court concluded that similar language contained in an agent's investigative report was sufficient to establish that tip-ticket gambling was for profit. Finally, the stipulated evidence includes Mr. Varner's statement that appellee retained the profits from the second box of tip tickets. Accordingly, the commission could reasonably conclude that appellee violated Ohio Adm. Code
{¶ 33} We turn next to appellee's contention that the trial court abused its discretion in concluding that the commission impermissibly placed the burden of proof upon appellee. In its decision, the common pleas court stated that "[t]he commission cannot place the burden of production on the permit holder to show that there was no profit or intent, but rather it is the burden of the Department to offer such evidence." (April 18, 2002 Decision, page 7.) The commission argues, and we agree, that the foregoing statement suggests that the common pleas court confused the state's burden of proving the elements of a gambling offense with appellee's burden of proving an affirmative defense. As we have already determined, the state fulfilled its burden of proving that appellee violated Ohio Adm. Code
{¶ 34} "As a general matter, we agree with the [commission] that the burden of proof under the charitable exception lies with the party charged under R.C.
{¶ 35} "* * *
{¶ 36} "Because we find that compliance with R.C.
{¶ 37} Former R.C.
{¶ 38} "(1) Schemes of chance conducted by a charitable organization that is, and has received from the internal revenue service a determination letter that is currently in effect stating that the organization is, exempt from federal income taxation under subsection 501(a) and described in subsection 501(c)(3) of the Internal Revenue Code, provided that all of the money or assets received from the scheme of chance after deduction only of prizes paid out during the conduct of the scheme of chance are used by, or given, donated, or otherwise transferred to, any organization that is described in subsection 509(a)(1), 509(a)(2), or 509(a)(3) of the Internal Revenue Code and is either a governmental unit or an organization that is tax exempt under subsection 501(a) and described in subsection 501(c)(3) of the Internal Revenue Code, and provided that the scheme of chance is not conducted during, or within ten hours of, a bingo game conducted for amusement purposes only pursuant to section
{¶ 39} In the instant case, appellee presented no evidence that his establishment qualified as an organization exempt from gambling prohibitions under R.C.
{¶ 40} Finally, we find that the common pleas court abused it discretion in concluding that there was no evidence in the record that appellee permitted sports-block pool (football) gambling on the permit premises.
{¶ 41} Because a football pool represents a chance in a scheme to which a participant gives valuable consideration for a chance to win a prize, a football pool is a "gambling device" pursuant to R.C.
{¶ 42} For the foregoing reasons, we find that the common pleas court abused its discretion by concluding that the commission's orders were not supported by reliable, probative, and substantial evidence; therefore, the commission's assignment of error is sustained. The judgment of the Franklin County Court of Common Pleas is reversed, and this cause is remanded to that court with instructions to reinstate the orders of the Ohio Liquor Control Commission.
Judgment reversed and cause remanded with instructions. LAZARUS, J., concurs. BROWN, J., concurs in part and dissents in part.