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National Law
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Liquor and Gambling
There is a vast array of local, state and federal laws covering gambling and the dispensing of alcohol. USPS squadrons and districts must comply with applicable laws whenever they engage in these activities.
Serving Alcohol
Squadrons and Districts often ask questions like these:
- Are our squadron or district functions covered under our insurance policies if we serve alcohol?
- Are we covered if we invite members of the general public as guests?
- Are we covered if we "sell" or "dispense" liquor or beer to recoup our cost or to make a small profit?
Three very important factors may determine the answer:
- How often are you serving liquor?
- Are you dispensing the liquor, or is it being served by a licensed establishment?
- If the squadron or district is dispensing the alcohol, are you charging money for it?
Example #1: The activity is a "one time event" sanctioned by the squadron/district, such as your annual Change of Watch. Bottles of wine are placed on each table and there is an open bar. There is no separate charge for the alcohol that is served.
In this first example, the activity may be covered as "usual and normal activity" of a squadron or district, but the final answer will depend on the law of the state where the event is being held.
Two cautions:
- Even if there is no charge for the alcohol, your state law may regard the activity as "dispensing" because the host is an an organization rather than an individual. If a license is required, and your unit has not been licensed, the activity may not be covered under the USPS liability insurance policy. Questions about the insurance coverage afforded under any policy written for National USPS should be directed to the National Treasurer.
- If a third party is injured by a person who was drinking at the event, some states will place liability on a social host who served alcoholic beverages, as well as on the one who consumed the alcohol.
Example #2: Your district or squadron has such events on a weekly or monthly basis, or your unit has an open bar which is operated on a continuing basis.
This second example begins to run into problems. Most states will rule that the frequency of the activity indicates that your group is "IN THE BUSINESS" of selling or serving alcohol, unless you are using a licensed facility (public restaurant or bar) to do the dispensing. Many states have dramshop laws which place liability for third party injury on the business that served the alcoholic beverages. If dramshop liability were imposed on your organization, the USPS liability insurance carrier could deny coverage because the activity was conducted in violation of local law.
Example #3: Your squadron or district maintains its own "no host" bar and collects a fee (either directly or indirectly). Your squadron has not been licensed to sell alcoholic beverages.
The third example represents illegal conduct, and thus not covered by insurance.
There is a common myth circulating among squadrons that if liquor is served after "making a donation," it is "not really a sale."
WRONG!
If money changes hands, all 50 states will regard the transaction as a sale for consumption, and therefore subject to licensing.
Most states have elaborate sets of laws covering:
- licensing of the establishment
- premises inspection
- transportation for sale
- hours of operation
- taxation
- local zoning
- sale
- prices
- serving
You may be required to buy tax stamps, conduct your operation as a private club, require your members to buy the alcohol off-premises, etc. These activities are controlled by state law, and every state has its own unique set of regulations. You should seek the advice of a local attorney who is knowledgeable in this area of the law. Your squadron or district law officer can usually give such advice or will help you find an attorney who can answer your questions. Another advisable approach would be to have your squadron and district social events at places that have licenses to sell and/or serve alcoholic beverages.
USPS and any of its affiliate squadrons and districts should not be in the business of selling and/or serving alcoholic beverages of any kind. Before your squadron or district has that next "HAPPY HOUR" and you believe you are not selling alcoholic beverages merely because you have a donation box at the bar, you should think twice.
Gambling
All 50 states regulate gambling with different provisions and definitions and make it illegal to participate in unregulated activities. Each state has its own laws as to what constitutes legal gambling. Sometimes participation is allowed with proper authorization or under very limited situations. The state may prohibit gambling generally, but permit bingo or raffles by licensed charitable groups. In addition, there are federal laws that prohibit gambling, if the activity is illegal under the law of the state where the activity is to be undertaken. Federal law also prohibits the use of the U. S. Postal Service for solicitation of unauthorized gambling or distributing material about such an event or activity. Thus, any form of gambling may be unlicensed, and all unlicensed gambling is illegal gambling.
An often asked question is: If we hold a "CASINO NIGHT" and sell tickets to the general public, will we be covered? For insurance purposes, these situations will most likely be covered but it is best to submit your plans to the National Treasurer so that a definite response can be obtained from the underwriter in advance. One issue in determining if there is insurance coverage is whether the activity that resulting in the injury was legal under state law. Again, reference must be made to the law of the state where the event is to be held.
In summary, most states have outlawed gambling in its various forms, except where the government has specifically authorized it. Your squadron or district may be at risk with any gambling event (including bingo and raffles) unless the activity has approval and a license from the governmental authority regulating that activity. Alert readers of this advice have pointed out that some recent USPS Governing Board Meetings have included "Casino Nights." All of these activities were held at licensed, regulated and taxed establishments that the local governmental authority had sanctioned. Your squadron or district MAY sponsor comparable activities at licensed establishments. Like alcohol, gambling should be left to those establishments that the government has licensed and thus sanctioned. To do otherwise, would open up the squadron or district to potential liability, not to mention expensive forfeitures and even criminal sanctions.
No one wants to be fined, sued or arrested, so check with your law officer for advice before you hold a "Casino Night" or fund raising activity that involves any form of gambling.
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