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SC Administrative Law Court Decisions

Theresa K. & Jimmy B. Carter, Margaret S. Keller and Reba A. Morris, d/b/a Cassidy's Cafe & Casino vs. SCDOR

South Carolina Department of Revenue

Theresa K. & Jimmy B. Carter, Margaret S. Keller and Reba A. Morris, d/b/a Cassidy's Café & Casino

South Carolina Department of Revenue

For the Petitioner: Kenneth E. Allen, Esquire

For the Protestants: Pro Se




This matter comes before the Administrative Law Judge Division pursuant to S.C. Code Ann. §§61-2-90 (Supp. 1996) and S. C. Code Ann. §§1-23-310 et seq. (1986 and Supp. 1996) for a contested case hearing. The Petitioner, Theresa K. Carter, seeks an on-premise beer and wine permit for Cassidy's Cafe and Casino. The Respondent made a Motion to be Excused which was granted by my Order dated January 8, 1998. A hearing was held on March 24, 1998, at the Administrative Law Judge Division.


Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion by the Petitioner and Protestant, I make the following Findings of Fact by a preponderance of evidence:

1. Notice of the time, date, place and subject matter of the hearing was given to the Petitioner, Protestants, and South Carolina Department of Revenue.

2. The Petitioner seeks an on-premise beer and wine permit for Cassidy's Cafe and Casino at 2744 Boiling Springs Road, Spartanburg, South Carolina. The Petitioner set forth in her application that she intends to operate the location as a bar with video poker machines. She also stated that her hours of operation would be from 9:00 a.m. to 12:00 p.m., Monday through Saturday.

3. The qualifications set forth in S. C. Code Ann. §61-4-520 (Supp. 1996) concerning the residency and age of the Petitioner are properly established. Furthermore, the Petitioner has not had a permit or license revoked within the last two years and notice of the application was lawfully posted both at the location and in a newspaper of general circulation.

4. The Petitioner has no criminal record and is of sufficient moral character to receive a beer and wine permit.

5. The Protestants contend that the proposed location is unsuitable because there are numerous locations that already sell beer or wine in the area. Specifically, Protestant Jeff Gray testified that there are 18 businesses that sell beer and wine within a five mile radius of the proposed location.

6. The Protestants also contend that the proposed location is unsuitable because the location was historically located in a peaceful rural area and that the proliferation of these businesses in the area is changing the nature of the community. However, the proposed location is in a developing area of Spartanburg County. There are numerous commercial businesses in the area, including several businesses with beer and wine permits. The evidence did not establish that this business would change the integrity of the neighborhood or create an overall adverse impact on the community.

7. The Petitioner maintains Class III video poker machines upon the proposed premises.

8. The proposed location is suitable for the on-premise sale of beer and wine with the stipulation set forth below.


The Petitioner stipulated at the hearing that she would abide by the following restriction if granted a beer and wine permit:

The Petitioner will remove the Class III video poker machines from the proposed premises and not maintain Class III video poker machines at the location unless a Circuit Court reviewing this decision or a South Carolina appellate Court holds that video poker machines may be lawfully at a location that sells beer and/or wine.


Based upon the above Findings of Fact, I conclude as a matter of law the following:

1. S.C. Code Ann. § 1-23-600 (Supp. 1996) grants jurisdiction to the Administrative Law Judge Division to hear contested cases under the Administrative Procedures Act.

2. S.C. Code Ann. § 61-2-260 (Supp. 1996) grants the Administrative Law Judge Division the responsibilities to determine contested matters governing alcoholic beverages, beer and wine.

3. S.C. Code Ann. § 61-4-520 (Supp. 1996) sets forth the requirements for the issuance of a beer and wine permit.

4. Although "proper location" is not statutorily defined, broad discretion is vested in the trier of fact in determining the fitness or suitability of a particular location. Fast Stops, Inc. v. Ingram, 276 S.C. 593, 281 S.E.2d 118 (1981).

5. As the trier of fact, the Administrative Law Judge is authorized to determine the fitness or suitability of the proposed business location of a Petitioner for a permit to sell beer and wine using broad, but not unbridled, discretion. Byers v. South Carolina ABC Commission, 281 S.C. 566, 316 S.E.2d 705 (Ct. App. 1984).

6. The determination of suitability of location is not necessarily a function solely of geography. It involves an infinite variety of considerations related to the nature and operations of the proposed business and its impact upon the community within which it is to be located. Kearney v. Allen, 287 S.C. 324, 338 S.E.2d 335 (1985).

7. Without sufficient evidence of an adverse impact on the community, the application must not be denied if the statutory criteria are satisfied. The fact that a Protestant objects to the issuance of a permit is not a sufficient reason by itself to deny the application. See 45 Am. Jur. 2d Intoxicating Liquors § 162 (Supp. 1995); 48 C.J.S. Intoxicating Liquors § 119 (1981).

8. In considering the suitability of a location, it is relevant to consider the previous history of the location. Smith v. Pratt, 258 S.C. 504, 189 S.E.2d 301, (1972); Taylor v. Lewis, et al. , 261 S.C. 168, 198 S.E.2d 801 (1973).

9. In Reyelt v. S.C. Tax Comm'n, C/A No. 6:93-1491-3 and C/A No. 6:93-1493-3 (D.S.C. 1993), the Court held that video poker is a regulated form of gambling in South Carolina. Black's Law Dictionary defines gambling as "[m]aking a bet. Such occurs when there is a chance for profit if a player is skillful and lucky. A play for value against an uncertain event in hope of gaining something of value. It involves, not only chance, but a hope of gaining beyond the amount played." Black's Law Dictionary 679 (6th ed. 1990) (citations omitted). I find that the play of video poker machines for the opportunity of payouts pursuant to S.C. Code Ann. § 12-21-2791 (Supp. 1996) is gambling.

10. "A court can take judicial notice of its own records, files, and proceedings for all proper purposes including facts established in its records." Freeman v. McBee, 280 S.C. 490, 313 S.E.2d 325 (Ct. App. 1984). I therefore find that the previous findings of fact and conclusions of law made in Vaughn v. South Carolina Department of Revenue, Docket No. 97-ALJ-17-0333-CC are relevant for consideration in this case. In Vaughn I issued an Order that the Department provide the following information:

a. The Department must state its position whether the Petitioner's location is still qualified and proper to receive an on-premise beer and wine permit in light of the new facts set forth above -- that the Petitioner is operating and intends to continue to operate Class III video poker machines upon his premises.

b. The Department shall state whether the Department issues beer and wine permits to individuals that are currently operating with Class III video poker machine licenses pursuant to the provisions of S.C. Code Ann. §12-21-2720(A)(3) (Supp. 1995) upon the premises and who plan to continue to do so after obtaining the permit. See Weaver, supra.

Rather than provide that information, the Department simply sent a copy of its pleadings filed in Circuit Court in the case of South Carolina Department of Revenue, et al. v. South Carolina Coin Operators Association, et al., Docket No. 97-CP-40-3611. In those pleadings the Department asserted that S.C. Code Ann. § 61-4-580 (Supp. 1996) "prohibits the Department from issuing licenses or permits for the sale of beer and wine at locations which operate Class III video game machines. . . ."

11. S.C. Code Ann. § 61-4-580 (Supp. 1996) provides in pertinent part that:

No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly commit any of the following acts upon the licensed premises covered by the holder's permit:

* * *

(3) permit gambling or games of chance;

* * *

(5) permit any act, the commission of which tends to create a public nuisance or which constitutes a crime under the laws of this State. . . .

(emphasis added). In construing a statute, its words must be given their plain and ordinary meaning without resorting to subtle or forced construction to limit or expand the statute's operation. Rowe v. Hyatt, ___ S.C. ___, 468 S.E.2d 649 (1996). Courts must apply clear and unambiguous terms of a statute according to their literal meaning. State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991). Moreover, a court must presume that the legislature intended to accomplish something with each statute and not to engage in futile action. Purvis v. State Farm Mut. Auto. Ins. Co., 304 S.C. 283, 403 S.E.2d 662 (Ct. App. 1991). Each part of a statute should be given effect, and each word given its plain meaning, if this can be accomplished by any reasonable construction. Sea Island Scenic Parkway Coalition v. Beaufort County Bd. of Adjustments and Appeals, 316 S.C. 231, 449 S.E.2d 254 (Ct. App. 1994), rev'd on other grounds, 471 S.E.2d 142 (1996).

In Berkebile v. Outen, 426 S.E.2d 760, 311 S.C. 50 (1993), the Supreme Court addressed the issue of whether "S.C. Code Ann. § 32-1-10 (1991), requires the playing of an illegal game as a prerequisite to the recovery of a [video poker] gambling loss." The Court noted that when the General Assembly enacted the Video Game Machines Act, it did not modify § 32-1-10 to require that a gambling loss recovery be limited to only illegal gambling losses. The Court held "[a] basic presumption exists that the legislature has knowledge of previous legislation when later statutes are passed on a related subject. Bell v. South Carolina State Highway Dept., 204 S.C. 462, 30 S.E.2d 65 (1944). This leads, at least, to an inference that the legislature does not require a showing of illegal gambling as an element for recovery under § 32-1-10." The Court further reasoned that because illegal contracts have historically been unenforceable, this statute would be unnecessary if it applied solely to illegal gambling. The Court therefore concluded since there is no requirement that the game be illegal, an individual could recover video poker gambling losses.

Applying the above principles to Section 61-4-580, it is clear that, in order to give both subsections (3) and (5) full force and effect, subsection (3) must be construed to encompass all forms of gambling, not merely those forms of gambling which are prohibited by law. To give subsection (3) any other interpretation would be to render it a nullity, since subsection (5), which prohibits a permit or license holder from permitting any act which constitutes a crime on the licensed premises, would necessarily include a prohibition against illegal gambling.

Furthermore, in Berkebile, id., the Court upheld the application of S.C. Code Ann. § 32-1-10 to video poker losses for reasons substantially similar to those in this case. The Court held in Berkebile that § 32-1-10 was enacted "to protect a citizen and his family from the gambler's uncontrollable impulses." 426 S.E.2d at 763. Likewise, S.C. Code Ann. § 61-4-580 contemplates the protection of the public by preventing individuals under the influence of beer or wine from gambling excessively.

12. The Court held in Byers v. South Carolina Alcoholic Beverage Control Commission, 281 S.C. 566, 316 S.E.2d 705 (S.C. App. 1984) that "[an applicant's] plans for the establishment have little bearing on the determination of suitability of [a] location. Such factors are proper for consideration on a petition to revoke or suspend a permit pursuant to Code Section 61-9-410." Byers, 316 S.E.2d at 707 (emphasis added). In Byers the evidence did not establish that the applicant was currently carrying on an activity that was in violation of the Alcoholic Beverage Control Act. The Court was left to speculate that the applicant would violate the Act in the future. However, in this case the Respondent not only "plans" to permit gambling at his establishment in the future, but is currently conducting and intends to continue that activity at his location. Therefore, the issue before this Court is not whether the location is suitable because an applicant may engage in a future action that is prohibited by the Act. Rather, the issue is whether this permit should be approved at a location where the applicant is currently engaged in activity that is unlawful under the Alcoholic Beverage Control Act. Approval of a permit under these circumstances is simply not proper.

13. Permits and licenses issued by the state for sale of liquor, beer and wine are not rights or property but are privileges granted in the exercise of the state's police power to be used and enjoyed only while the restrictions and conditions governing them are complied with. The Administrative Law Judge, as the tribunal authorized to grant the issuance of a permit, may likewise place restrictions or conditions on the permit or license. See Feldman v. S.C. Tax Comm'm, 203 S.C. 49, 26 S.E.2d 22 (1943). Furthermore, 23 S.C. Code Ann. Regs. 7-88 (1976) authorizing the imposition of restrictions to permits, provides:

Any stipulation and/or agreement which is voluntarily entered into by an applicant in writing for a beer and wine permit between the applicant and the South Carolina Alcoholic Beverage Control Commission, if accepted by the Commission, will be incorporated into the basic requirements for the enjoyment and privilege of obtaining and retaining the beer and wine permit and which shall have the same effect as any and all laws and any and all other regulations pertaining to the effective administration of beer and wine permittees.

In the event that evidence is presented to this Commission that any part of the stipulation or agreement is or has been knowingly broken by the permittee will be a violation against the permit and shall constitute sufficient grounds to suspend or revoke said beer and wine permit.

14. The Petitioner meets the statutory requirements for holding an on-premise beer and wine permit at the proposed location with the following restriction.


Based upon the Findings of Fact and Conclusions of Law, it is hereby:

ORDERED that the on-premise beer and wine permit application of Theresa K. Carter for Cassidy's Cafe and Casino be granted upon the Petitioner signing a written Agreement with the South Carolina Department of Revenue and adhering to the above stipulation.

IT IS FURTHER ORDERED that a violation of the above restriction be considered a violation against the permit and may result in a fine, suspension or revocation.

IT IS FURTHER ORDERED that the Department of Revenue issue an on-premise beer and wine permit upon the payment of the required fee and cost by the Petitioner.



Ralph King Anderson, III

Administrative Law Judge

April 6, 1998

Columbia, South Carolina

Brown Bldg.






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