South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Winners Circle of Hilton Head

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Winners Circle of Hilton Head
 
DOCKET NUMBER:
95-ALJ-17-0545-CC

APPEARANCES:
For the Petitioner: Nicholas P. Sipe, Esquire

For the Respondent: Steven A. Miller, Pro Se (Co-owner)
 

ORDERS:

ORDER and DECISION

STATEMENT OF THE CASE

This matter comes before me pursuant to S.C. Code Ann. § 1-23-320 (Supp. 1994) on a written violation issued by the South Carolina Department of Revenue and Taxation (Petitioner) against Winners Circle of Hilton Head (Respondent). The Petitioner alleges that the Respondent, through its agents, violated S.C. Code Ann. § 12-21-2804(B)(Supp. 1994), by advertising the playing of video game machines at its location on Hilton Head Island. The Petitioner seeks a $2500 fine and an Order requiring that the term "Video Cashino" or "Cashino" be removed from display at the location.

The Respondent denies the alleged violation and contests the citation. It argues that the term "CASHINO" has no definition and thus cannot constitute an advertisement for the playing of video game machines.

After timely notice to the parties, a contested case hearing was held at the Beaufort County Courthouse on November 1, 1995. The owners of the Respondent who appeared at the hearing were advised of their rights to have legal representation; however, they wished to proceed with the hearing.

Based upon a thorough review of the record, I conclude that the Respondent violated the provisions of S.C. Code Ann. Section 12-21-2804(A)(Supp. 1994) and a fine of $1500.00 should be assessed.

EVIDENCE

Without objection, the Petitioner placed into evidence the following exhibits:

Exhibit 1: A picture of the interior of Respondent's location on March 17, 1995.
Exhibit 2: Two photographs of the exterior of Respondent's location taken on March 20, 1995.
Exhibit 3: One photograph of the exterior of Respondent's location taken on March 20, 1995.

Also, without objection Respondent placed into evidence as its sole exhibit the violation report dated June 1, 1995.

FINDINGS OF FACT

Having carefully considered all testimony and arguments presented at the hearing and taking into account the credibility of the witnesses and accuracy of the evidence, I make the following findings by a preponderance of the evidence:

1. This Division has personal and subject matter jurisdiction.

2. Notice of the date, time, place and nature of the hearing was timely given to both parties.

3. The Respondent, Winners Circle of Hilton Head, is a corporation organized and operating under the laws of the State of South Carolina. Steven A. Miller and James J. Abdo are the sole shareholders and owners of the corporation.

4. Winners Circle of Hilton Head obtained its business license and operates on Hilton Head Island under the name "CASHINO".

5. On March 17, 1995, Rodney G. Muckenfuss, State Law Enforcement Division ("SLED") agent assigned to the Petitioner, went to Respondent's business location for an inspection.

6. On that date, there were eight licensed video poker machines, one ATM machine, one VCR and a television together with some baseball cards for sale inside the location. The Respondent owns the video poker machines and purchased the state licenses.

7. Also inside the location was a green neon sign entitled "CASHINO" with the phrase "OPEN 24 HOURS" in red color underneath as shown on Petitioner's exhibit #1. They could then and presently can be seen from the road outside the location.

8. On the exterior at Respondent's location was then and presently is displayed a sign entitled "CASHINO" and in the windows are displayed the words "VIDEO" and "CASHINO."

9. The Respondent furnished and still furnishes to its patrons as a convenience the usage of an ATM machine free of any transaction fee.

10. Upon observing the signage on the exterior and interior location entitled "CASHINO," Agent Muckenfuss spoke with an employee of the Respondent, advising that the

signage was in violation of South Carolina statutes since it equated to advertising, and had to be removed within twenty-four hours.

11. Subsequently, on March 20, 1995, Agent Muckenfuss again inspected the location and found the signs still there. He contacted his supervisor and was authorized and did issue an administrative violation or citation to Respondent for advertising the playing of video machines at its location in violation of the laws of the State of South Carolina.

CONCLUSIONS OF LAW

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

1. This matter is properly before the Administrative Law Judge Division pursuant to the provisions of Chapter 23, Title 1 and S.C. Code Ann. § 12-4-30(D) (Supp. 1994).

2. The Video Game Machines Act, which regulates video poker machine activity in South Carolina, was enacted in 1993 and became effective on July 1, 1993. This Act is codified at S.C. Code Ann. § 12-21-2770 et seq. (Supp. 1994).

3. S.C. Code Ann. § 12-21-2804(B) (Supp. 1994) provides:

No person who maintains a place or premises for the operation of machines licensed under Section 12-21-2720(A)(3) may advertise in any manner for the playing of the machines nor may a person offer or allow to be offered any special inducement to a person for the playing of machines permitted under Section 12-21-2720(A)(3).

4. Machines licensed under Section 12-21-2720(A)(3) include video game 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).

5. A person who violates the advertising prohibition is subject to a fine of up to five thousand dollars. S.C. Code Ann. § 12-21-2804(F) (Supp. 1994).

6. The Video Game Machines Act does not define the term "advertise." The meaning of the term may be derived from the common meaning as found in the dictionary. "Advertise" means (1) "to make something known;" (2) "to announce publicly especially by a printed notice or a broadcast;" (3) "to call public attention to especially by emphasizing so as to arouse a desire to buy or patronize." Merriam Webster's Collegiate Dictionary 18 (10th ed. 1993).

7. The signs "VIDEO" and "CASHINO" were signs displayed at Respondent's location to call public attention to the location and to arouse a desire to patronize the location to play video machines. The term CASHINO could further be interpreted as indicating a place where gambling is available. Further, the availability of obtaining cash from an ATM machine without paying a fee was and is an inducement for individuals to play the video machines and validates the argument that Respondent was advertising the availability of cash and the playing of video machines.

8. The signs were visible from the street as depicted in photographs taken on March 20, 1995.

9. Owners and operators of video gaming machines were notified by the Department of the requirements of the Video Game Machines Act, S.C. Code Ann. §§ 12-21-2770 et seq. (Supp. 1994). The Department held meetings to discuss compliance with the act.

10. Information was available from the Department in the form of a circular entitled "A Guide to Conducting Video Gaming Establishments in South Carolina". This guide states on the front that it "has been designed to aid taxpayers in the implementation of Video Game Machines Act, effective July 1, 1993." With respect to advertising it states, "Advertising will not be allowed in any manner whatsoever. Advertising will include both that displayed outside and inside of the licensed establishment." Guide, p. 4. (emphasis in original).

11. Clearly the placing of the words VIDEO and CASHINO both outside and within the location has the purpose of advertising the business of providing video games licensed pursuant to the Act for play by the public. Mr. Miller testified that the purpose of the business was to make money through the operation of video poker machines by patrons. The advertising therefore violated the provisions of the Act.

ORDER

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

ORDERED that Winners Circle of Hilton Head, a South Carolina corporation doing business as Cashino, has violated the advertising provisions of the Video Game Machines Act and is fined fifteen hundred dollars ($1500.00), payable to the South Carolina Department of Revenue and Taxation not later than ten (10) days from the date of this Order and, it is further

ORDERED that Winners Circle of Hilton Head shall remove all CASHINO signs from the exterior and interior at its business location not later than ten (10) days from the date of this Order.

AND IT IS SO ORDERED.

_______________________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

November 8, 1995


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