ORDERS:
ORDER AND DECISION
This matter comes before me on the citation issued by the Department of Revenue and Taxation
against Tina Alewine and Edwin S. Alewine for violating S.C. Code Ann. § 12-21-2804(A)
(Supp. 1994) by allowing the use of more than eight video poker machines in a single place or
premise. Great Games, Inc., is the owner of the machines located in the businesses at the time of
the citation. After notice to the parties, a hearing was conducted on June 12, 1995.
FINDINGS OF FACT
I make the following findings of fact, taking into consideration the burden on the parties to
establish their cases by a preponderance of their evidence and taking into account the credibility of
the witnesses:
1. A site inspection was made by a revenue officer in October 1994. He gathered information,
took pictures, obtained documents and reported the information to the Department. The facts
regarding the location at that time are:
a. The business known as Steve's Hot Dogs operates in a building located at 1221 Augusta
Road in West Columbia, South Carolina. The building was leased to respondent Edwin S.
Alewine on a month to month basis.
b. There is one entrance from the outside into Steve's Hot Dogs. Inside the location there is
a kitchen, a counter for the sale of food, and an automatic teller bank machine. There are
also two rest rooms and a storage room.
c. To the left of the front door into Steve's Hot Dogs is another door which has the name
"Tina's Wings" on it. To the left of this door is five video poker machines. Access to these
five machines can be accomplished by using either door. Both doors open into the same
space.
d. Just past the five machines is an area enclosed with wood railing and slats from the floor
to about four feet in height and then lattice on top of the railing up to the ceiling. There is
an opening about four feet wide into this enclosed area. There is no door separating the
areas. In the enclosed area are eight video poker machines. No other equipment is located
in this area. There is an office located inside of the enclosed area.
e. Each business had separate state sales tax licenses. The businesses shared the utility bills
for the location. Tina's Wings has a separate address of 1221-A Augusta Road. There was
a sign for Steve's Hot Dogs on one door and a sign for Tina's Wings on the other front
door. Outside of the building, the signs advertised Steve's Hot Dogs.
f. The location was open twenty-four hours a day with three employees other than the
respondents. Each employee worked an eight hour shift. All employees were paid from the
same account.
g. There was a verbal agreement with Great Games, Inc. for splitting the proceeds of the
video poker machines on a fifty-fifty basis.
2. The location was inspected again by an auditor of the Department responsible for the
enforcement of the video game law. This inspection occurred after the October inspection, but
before the citation was issued in November 1994. At the time of his inspection, the location and
businesses were substantially the same.
3. Information obtained during the site inspection was referred to the Policy Division of the
Department for review. This division was responsible for reviewing all information relating to site
inspections to determine compliance with the regulatory scheme established in the Video Game
Machines Act.
4. Based upon the information gathered, the Department issued a citation against the
Respondents, Tina and Edwin S. Alewine, for permitting the use of more than eight machines in a
single location in violation of S.C. Code Ann. § 12-21-2804(A).
5. In May 1994, Great Games, Inc. and Edwin Alewine were cited for violating the same
provisions of the act. A meeting was held in which the violation was discussed. During that
meeting the respondents were informed that more than eight machines could not be added to the
location without risk of future violation.
6. Subsequent to the issuance of the citation, Great Games, Inc., severed its business relationship
with Edwin Alewine. The machines located in the building at the time of the inspection and
citation have been removed.
7. Alewine indicated that additional machines were placed in the location after a hearing in circuit
court involving other video poker operators. At that hearing, an injunction was issued preventing
the Department from enforcing certain provisions of the Video Game Machines Act against the
parties involved in the action. Alewine was not a party to that legal action.
CONCLUSIONS OF LAW
1. Pursuant to S.C. Code Ann. § 12-4-30(D) all contested cases previously heard by the three
commissioners of the South Carolina Tax Commission shall be heard by an administrative law
judge under the provision of Chapter 23, Title 1. S.C. Code Ann. § 12-4-30(D) (Supp. 1994).
2. S. C. Code Ann. § 12-21-2804(A) (Supp. 1994) states that no person shall maintain or permit
to be used permits or licenses for the operation of more than eight machines authorized under
Section 12-21-2720(A)(3) at a single place or premises. For licenses or permits issued after July
1, 1994, the limit is five machines.
3. Machines licensed under Section 12-21-2720(A)(3) include video games with free play feature
operated by a slot in which a coin or thing of value is deposited. S.C. Code Ann. § 12-21-2720
(Supp. 1994).
4. Although the Video Game Machines Act ("Act") does not define the terms "single place or
premise", the words are sufficiently definite and susceptible of a common ordinary meaning so as
to provide a person of ordinary intelligence reasonable notice of what conduct is proscribed.
5. The evidence clearly leads a person of ordinary intelligence to conclude that the two businesses
are in reality one entity operating in a single location. Respondent Alewine leases a single
building. Although there are two addresses for the business, the physical layout of the location
reveals that doors to both businesses open into the same space. The enclosed area can be
accessed through either front door and there is no delineation of which space is for which
business. The location is not subdivided so as to delineate one business from the other. The
evidence reveals that the employees worked in both businesses. There is only one office for both
businesses. Thirteen video games licensed pursuant to Section 12-21-2720 were operated in one
location. It is therefore in violation of the provisions of the act restricting the number of machines
in a single place or premise.
6. S.C. Code Ann. § 12-21-2804(A) (Supp.1994) states that the penalty for failing to comply with
the maximum number of machines in a single place or premise requires the revocation of the
licenses of machines located in the establishment.
7. S.C. Code Ann. § 12-21-2804(F) (Supp. 1994) states that a person who violates Section
12-21-2804(A) may be fined up to five thousand dollars.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, the Department of Revenue
and Taxation properly issued a citation against the Respondents. The licenses on the video poker
machines located at Steve's Hot Dogs and Triple Sevens on November 10, 1994 are revoked and
a fine of $4000 is imposed upon the Respondents.
AND IT IS SO ORDERED.
______________________________
ALISON RENEE LEE
Administrative Law Judge
June ______, 1995
Columbia, South Carolina |
