AmVets Post No. 2 v. Delaware Board of Charitable Gaming

CourtSuperior Court of Delaware
DecidedJanuary 12, 2023
DocketS22A-03-001 MHC
StatusPublished

This text of AmVets Post No. 2 v. Delaware Board of Charitable Gaming (AmVets Post No. 2 v. Delaware Board of Charitable Gaming) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AmVets Post No. 2 v. Delaware Board of Charitable Gaming, (Del. Ct. App. 2023).

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

AMVETS POST NO. 2, ) ) Appellant, ) ) v. ) C.A. No. S22A-03-001 MHC ) THE DELAWARE BOARD OF ) CHARITABLE GAMING, ) ) ) ) Appellee. )

OPINION AND ORDER Submitted: December 22, 2022 Decided: January 12, 2023

On Appeal from The Delaware Board of Charitable Gaming, AFFIRMED IN PART, REMANDED IN PART.

Richard E. Berl Jr., Esquire, Hudson, Jones, Jaywork & Fisher, LLC, Lewes, Delaware. Attorney for Appellant AmVets Post No. 2.

Kemba S. Lydia-Moore, Esquire, Deputy Attorney General, Department of Justice, Wilmington, Delaware. Attorney for Appellee the Delaware Board of Charitable Gaming.

CONNER, J. INTRODUCTION Appellant AmVets Post No. 2 (“AmVets”) appeals from a decision of the

Delaware Board of Charitable Gaming (“the Board”). The Court has reviewed the

parties’ submissions, the record below, and the relevant law. For the reasons set forth

below, the Board’s decision is AFFIRMED IN PART AND REMANDED IN

PART.

PROCEDURAL BACKGROUND

On November 12, 2020 and April 5, 2021 the State of Delaware filed

complaints with the Board against AmVets alleging that AmVets failed to disclose

the games it wished to conduct and corresponding rules to the Board, conducted a

series of games that were not approved, utilized a progressive jackpot and failed to

provide proper documentation in its After Occasion Reports (“AORs”). The

complaints allege AmVets violated the statutes and regulations that are applicable

to the aforementioned games as well as Article II § 17B of the State Constitution. A

hearing officer from the Delaware Division of Professional Regulation (“DPR” or

“Division”) held hearings on the matters on May 18 and November 29, 2021. The

hearing officer found multiple violations were committed by AmVets. The Board

adopted the hearing officer’s findings and imposed discipline on AmVets.

1 SUMMARY OF EVIDENCE PRESENTED BELOW

On May 28, 2018 AmVets, a 501(c)(19) organization located in Millsboro,

Delaware, filed an application with the Board to play “Hotshots1” at an event in

September 2018 (the “first application”). No game rules were included with the

application so the Board considered a copy of rules from 2016 that were already on

file. The Board granted the first application.

On August 21, 2019 AmVets filed an application to host six games of

Hotshots in February 2020 (the “second application”). The Board granted the second

application.

The State filed two complaints on November 12, 2020 and April 5, 2021. After

multiple days of proceedings before a hearing officer in 2021, the hearing officer

issued an extensive Board recommendation on December 31, 2021.

To summarize, the State alleged that AmVets did not follow the approved

rules of Hotshots in 2018 and that AmVets committed multiple violations with

respect to the February 2020 games, including playing an unapproved game called

Mad Dog, impermissibly utilizing progressive jackpots and not properly completing

required Board filings.

1 “Hotshots is also known as Flip 5 and is generally played with multiple decks of cards shuffled through machines. The players are dealt five cards face down from the multiple decks, and the dealer flips cards over (one-by-one) from his deck and calls out each card. If the player has the called card it can be then be [sic] turned over. The players race to flip all five cards over, and the winner is the first to flip all five cards over in one hand.” Recommendations of Hr’g Officer at 44, Tab D. 2 On February 23, 2022 the Board issued its decision which adopted the hearing

officer’s recommendations. Thus, the Board determined as a matter of law that

AmVets committed 37 violations of Board Regulations and statutes.2

The Board interpreted 28 Del. C. § 1521(a) determining that the statute, and

in turn the Delaware Constitution, do not allow for progressive jackpots. It is clear

that AmVets used progressive jackpots at the February 2020 games 3 and the Board

found them in violation of 28 Del. C. §1521(a)(1) and (4). The Board also found that

AmVets violated 28 Del. C. § 1521(b) and Board Regulation 9.1 by not filing proper

documentation with the Board relating to the February 2020 games.

Next, the Board concluded that AmVets violated Board Regulation 11.1. The

Board agreed with the hearing officer that AmVets was in violation of 11.1 because

AmVets’ 2019 application did not mention “a 12th game or a Mad Dog or other

‘bonus’ type game or a progressive jackpot of any kind;” which AmVets in fact

played by its own admission.4 Lastly, the Board found that AmVets violated Board

Regulation 11.4.3 in relation to how AmVets disposed of funds from the February

2020 games.

2 Order of the Board of Charitable Gaming dated Feb. 23, 2022, Tab A. 3 A financial filing from AmVets relating to the February 4, 2020, game of Hotshots contained the words “progressive jackpot.” See Notice of Appeal Ex. B at 11. 4 Order of the Board of Charitable Gaming dated Feb. 23, 2022, Tab A. 3 In total, the Board imposed $37,000 in fines for the aforementioned violations,

which is the statutory maximum.5 The Board cited AmVets’ disciplinary history as

an aggravating factor.6 AmVets or any affiliate of AmVets is also currently barred

from obtaining any license, permit or other approval issued by the Board.

On March 2, 2022 AmVets appealed to this Court. On March 17, 2022

pursuant to Superior Court Civil Rule 62(c), AmVets filed a motion to stay the

penalties below pending appeal to this Court. The motion to stay pending appeal was

granted on May 4, 2022.

STANDARD OF REVIEW

This Court has jurisdiction to hear appeals from the Board pursuant to the

Delaware Administrative Procedures Act.7 The Court’s review is “limited to a

determination of whether the [Board’s] decision was supported by substantial

evidence on the record before the [Board].”8 When factual determinations are at

issue the Court must “take due account of the experience and specialized competence

of the [Board] and of the purposes of the basic law under which the [Board] has

acted.9 But, if the Court determines that the record is insufficient to support the

5 “The Board may impose a fine upon a licensee for violations of the law or regulations of not more than $1,000 per violation.” Here, the Board found 37 violations and imposed $37,000 in fines. See Del. C. § 1523. 6 See AmVets Post No. 2 v. Delaware Bd. of Charitable Gaming, 2017 WL 4403333 (Del. Super. Sept. 29, 2017). 7 29 Del. C. §§ 10102, 10142, 10161. 8 United Water Del., Inc. v. Public Serv. Comm’n, 723 A.2d 1172, 1173-74 (Del. 1999). 9 29 Del. C. § 10142(d). 4 Board’s conclusions, the Court shall remand the case to the Board for further

proceedings on the record.10

DISCUSSION

A. Applicable Law

The Delaware Constitution prohibits gambling unless it is under certain

circumstances. More specifically, Article II, § 17B speaks to lotteries and other

gambling events. These types of gambling events are permitted when there is a

veterans organization, like AmVets, conducting the games, “provided that the net

receipts or profits arising from the conducting or operating of such [gaming events]

. . . are used solely for the promotion or achievement of the purposes of such . . .

organizations.”11

The Board is established under Title 28 of the Delaware Code.

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Related

United Water Delaware, Inc. v. Public Service Commission
723 A.2d 1172 (Supreme Court of Delaware, 1999)

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