Ohio Veterans & Fraternal Charitable Coalition, Inc. v. Charitable Mgt. & Capital Group, L.L.C.

2025 Ohio 1191
CourtOhio Court of Appeals
DecidedApril 3, 2025
Docket24AP-353
StatusPublished

This text of 2025 Ohio 1191 (Ohio Veterans & Fraternal Charitable Coalition, Inc. v. Charitable Mgt. & Capital Group, L.L.C.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ohio Veterans & Fraternal Charitable Coalition, Inc. v. Charitable Mgt. & Capital Group, L.L.C., 2025 Ohio 1191 (Ohio Ct. App. 2025).

Opinion

[Cite as Ohio Veterans & Fraternal Charitable Coalition, Inc. v. Charitable Mgt. & Capital Group, L.L.C., 2025- Ohio-1191.] IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Ohio Veterans and Fraternal : Charitable Coalition, Inc., : Plaintiff-Appellant, No. 24AP-353 : (C.P.C. No. 22CV-671) v. : (REGULAR CALENDAR) Charitable Management and Capital Group, LLC, :

Defendant-Appellee. :

D E C I S I O N

Rendered on April 3, 2025

On brief: Kravitz, Brown & Dortch, LLC, Michael D. Dortch, and Richard R. Parsons, for appellant. Argued: Michael D. Dortch.

On brief: Amundsen Davis LLC, Larry H. James, and Christopher R. Green, for appellee. Argued: Larry H. James.

APPEAL from the Franklin County Court of Common Pleas

MENTEL, J. {¶ 1} Plaintiff-appellant, Ohio Veterans and Fraternal Charitable Coalition, Inc. (“OVFCC”), appeals from a judgment of the Franklin County Court of Common Pleas granting summary judgment in favor of defendant-appellee, Charitable Management and Capital Group, LLC (“CMCG”). For the reasons that follow, we affirm in part and reverse in part. I. Facts and Procedural History {¶ 2} OVFCC is a nonprofit corporation representing several veterans’ and fraternal organizations in the state of Ohio. OVFCC’s member organizations include AMVETS Department of Ohio; American Legion Department of Ohio; Fraternal Order of No. 24AP-353 2

Eagles of Ohio; VFW of Ohio Charities, Inc.; Ohio State Moose Association; Ohio Council of Fraternal, Veterans and Service Organizations, Inc.; and Ohio Elks Association. Each OVFCC member organization has a 501(c)(3) charity to carry out the organization’s charitable mission. {¶ 3} The OVFCC member organizations historically raised funds to support their charitable causes through traditional raffles and bingo games. Over time, the OVFCC member organizations sought to modernize their charitable games. CMCG is a company engaged in the distribution and operation of electronic gaming terminals. In 2011, CMCG’s owner, Alfred DeLeon, met with representatives from OVFCC to discuss “opportunities to raise money through a gaming device for their charities.” (DeLeon Dep. at 17.) CMCG believed an electronic raffle game would comply with the applicable charitable gaming statutes in Ohio. {¶ 4} After the parties’ initial meeting, CMCG acquired electronic raffle software and installed the software on electronic raffle machines (“ERMs”). The ERMs consisted of a metal or wooden gaming cabinet, a touch screen computer monitor, a hard drive, a bill acceptor, and a printer. CMCG referred to the software installed on the ERMs as “Raffle 2.0.” (DeLeon Dep. at 22.) The Raffle 2.0 software utilized a finite pool of 1,000,000 raffle tickets and each raffle ticket had an outcome or prize assigned to it before the game began. After a customer purchased a raffle ticket, the customer could choose the “quick reveal” option to immediately reveal the value of their raffle ticket, or the customer could choose to play a game, such as keno or poker, to reveal the prize associated with their ticket. The customer’s choice to play a game did not affect the value of their raffle ticket. The Raffle 2.0 software disbursed tickets sequentially and all tickets had to be sold before the system would generate another pool of raffle tickets. {¶ 5} From 2011 to 2019, OVFCC and CMCG entered into a total of four exclusive agreements with each other. On May 12, 2011, OVFCC and CMCG entered into their first exclusive agreement for a 90-day “Pilot Program.” (Mar. 28, 2023 Mot. for Summ. Jgmt., Ex. 1, § I (A).) On July 28, 2011, the parties entered into their second exclusive agreement. In the second exclusive agreement, OVFCC granted CMCG “the exclusive right for a term of five (5) years to install, maintain, and operate [ERMs] upon the premises of its participating members.” (Mot. for Summ. Jgmt., Ex. 2, § I.) The parties agreed to split the net revenue from the ERMs as follows: months 1-6, 60 percent to CMCG and 40 percent to No. 24AP-353 3

the member locations; months 7-9, 50 percent to CMCG and 50 percent to the member locations; and months 10-60, 40 percent to CMCG and 60 percent to the member locations. CMCG and OVFCC also entered into individual contracts with each OVFCC member location based on the terms contained in the parties’ exclusive agreement. {¶ 6} In late 2013, the Ohio Attorney General (“AG”) instructed the OVFCC member locations to stop using the ERMs. The AG believed the raffle conducted on the ERMs was unlawful under the charitable gaming statutes in R.C. Ch. 2915. On December 19, 2013, OVFCC filed a complaint in Franklin C.P. case No. 13CV-13610, seeking declaratory and injunctive relief against the AG and the Ohio Liquor Control Commission (“LCC”). Contemporaneously with the complaint, OVFCC moved for a temporary restraining order (“TRO”) and the trial court granted the TRO that same day. The TRO “immediately RESTRAINED” the AG and the LCC “from taking any enforcement action with respect to the Electronic Raffle Machines referenced in Plaintiffs’ Verified Complaint and utilized by veteran’s organizations and fraternal organizations for charitable purposes in compliance with R.C. § 2915.092.” (Mot. for Summ. Jgmt., Ex. 3 at 1.) On December 23, 2013, the trial court amended the TRO to clarify the TRO would remain in effect pending further orders from the trial court. {¶ 7} On August 13, 2014, while case No. 13CV-13610 remained pending, the parties executed their third exclusive agreement. OVFCC again granted CMCG the exclusive right to install, maintain, and operate ERMs on the premises of OVFCC’s member locations for a term of five years. The parties agreed to split the net revenue from the ERMs as follows: 60 percent to the member locations and 40 percent to CMCG. {¶ 8} On February 23, 2018, the trial court issued its final decision in case No. 13CV-13610. The trial court analyzed former versions of R.C. 2915.092(A) and 2915.01(CC), which provided, in relevant part, as follows: R.C. 2915.092(A): (1) . . . [A] charitable organization, . . . a veteran’s organization, [or a] fraternal organization . . . may conduct a raffle to raise money for the organization . . . and does not need a license to conduct bingo in order to conduct a raffle drawing that is not for profit. ... R.C. 2915.01(CC): No. 24AP-353 4

“Raffle” means a form of bingo in which the one or more prizes are won by one or more persons who have purchased a raffle ticket. The one or more winners of the raffle are determined by drawing a ticket stub or other detachable section from a receptacle containing ticket stubs or detachable sections corresponding to all tickets sold for the raffle. (Feb. 23, 2018 Decision on Cross Mots. for Summ. Jgmt. & Final Jgmt. Entry at 10-11.) {¶ 9} Based on the plain language of the statutes, the trial court concluded the ERMs did not conduct a “raffle” as defined in R.C. 2915.01(CC). The court noted the ERMs relied on “predetermine[d] winning and losing ticket numbers thereby removing the randomness of the traditional raffle game win” and did not rely on a “specific drawing of winners.” (Mot. for Summ. Jgmt., Ex. 6 at 15-16.) Because the ERMs did not conduct a raffle as defined by R.C. 2915.01(CC), the court found the members’ use of the ERMs unlawful under R.C. 2915.092(A). {¶ 10} On March 9, 2018, the trial court in case No. 13CV-13610 granted OVFCC’s motion to stay the February 23, 2018 judgment. The court indicated the stay of judgment would “remain in effect until all appeals of the February 23, 2018 Decision have been exhausted.” (Mot. for Summ. Jgmt., Ex. 7 at 1.) {¶ 11} OVFCC appealed the trial court’s decision to this court. On November 20, 2018, in Ohio Veterans & Fraternal Charitable Coalition v. DeWine, 2018-Ohio-4679 (10th Dist.), we issued a decision affirming the trial court.

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Bluebook (online)
2025 Ohio 1191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohio-veterans-fraternal-charitable-coalition-inc-v-charitable-mgt-ohioctapp-2025.