South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
SCDOR vs. Tina Alewine, d/b/a Steve's Hot Dogs

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
Tina Alewine, d/b/a Steve's Hot Dogs
 
DOCKET NUMBER:
97-ALJ-17-0156-CC

APPEARANCES:
For the Petitioner: Jeffrey M. Nelson, Esquire

For the Respondents: John G. O'Day, Esquire
 

ORDERS:

FINAL DECISION

STATEMENT OF CASE


This matter comes before me upon request for a Hearing by the Respondents after being cited for violating S.C. Code Ann. § 12-21-2804(A)(Supp. 1996). Specifically, the Department alleges that the Respondents have violated the "one separate employee" requirement of S.C. Code Regs. 117-190 (Supp. 1996) and the penalty sign requirements of Section 12-21-2802 (Supp. 1996). A Hearing was held before the Administrative Law Judge Division on December 2, 1997.

FINDINGS OF FACT


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 Parties, I make the following Findings of Fact by a preponderance of evidence:

1. Legal notice of the time, date, place and subject matter of the Hearing was given to the Petitioner and the Respondents.

2. On October 17, 1996, South Carolina Law Enforcement Division ("SLED") Agent John Tanner conducted an inspection of the video gaming establishments located at Steve's Hot Dogs, located at 1221 Augusta Highway in West Columbia, South Carolina. Agent Tanner was accompanied in his inspection by SLED Agent Konnie Smith. During the course of their inspection, the Agents observed a commons area, which included a lunch counter and two separate rooms containing video poker machines. One of these video poker rooms had a large "A" over the doorway and the second a large "B" in the same location. Game rooms A and B were open and the machines in these rooms were on and operational. Both game rooms contained five (5) Class III video game machines.

3. When the SLED officers entered the location, there were no employees in either of the two video poker rooms. The only employee which the agents observed was located in the commons area behind the lunch counter. Agents Tanner and Smith played machines located in both rooms. While the agents played the machines in room A, an employee, Mrs. Boron, entered the game room and asked if the agents wished to order a drink. After Agent Smith ordered a beer, Mrs. Boron returned with a beer and left again. No other employees entered either game room while the agents were playing the video poker machines.

4. Game rooms A and B had retail sales tax licenses issued to Tina Alewine. Additionally, the Class III Coin Operated Device licenses were all issued to Tina S. Alewine d/b/a Steve's Hot Dogs. The following Class III licenses were located in Game Rooms A and B:

Game Room A Game Room B

045509 045507

045514 045510

045515 045511

045519 045512

045520 045518

5. I find the Respondents were in violation of S.C. Code Regs. § 117-190 (Supp. 1996) for failing to have at least one separate employee in the game room premises during business hours.

6. The machines in Room B did not have any penalty signs attached to the machines or on the wall behind each machine stating penalties as required by S.C. Code Ann. § 12-21-2802 (Supp. 1996), and only three of the five machines located in Room A had any such signs. In all, seven machines were in violation of Section 12-21-2802.

7. The Department seeks total monetary penalties of Seven Thousand One Hundred and no/100 ($7,100.00) Dollars against Tina Alewine. Specifically, the Department seeks a Five Thousand and no/100 ($5,000.00) Dollar fine for violation of Section 12-21-2804(A) and Reg. 117-190 and Two Thousand One Hundred and no/100 ($2,100.00) Dollars for the seven violations of the penalty sign provision contained in Section 12-21-2802. The Department further seeks revocation of ten Class III machine licenses at the two businesses in question; Tina Alewine d/b/a "Steve's Hot Dogs" Game Room A (retail license #032-28360-8) and Tina Alewine d/b/a "Steve's Hot Dogs" Game Room B (retail license #032-28361-7).

8. Tina Alewine has been disciplined for violating the Video Game Machines Act on three previous occasions. She entered into a consent agreement in SC Department of Revenue and Taxation v. Tina Alewine, d/b/a Steve's Hot Dogs and Video, Docket No. 95-ALJ-17-0095-CC, in which she agreed to remove her unlawful advertising and receive a Five Hundred and no/100 ($500.00) fine. In South Carolina Department of Revenue and Taxation v. Great Games, Inc., and Edwin S. Alewine d/b/a Triple Seven and Tina Alewine d/b/a Steve's Hot Dogs and Video, Docket No. 95-ALJ-17-0185-CC, the Respondent received a Four Thousand and no/100 ($4,000.00) Dollar fine and revocation of her machine licenses for having more than eight (8) video poker machines at a "single place or premises." Finally, in South Carolina Department of Revenue v. Edwin S. Alewine, d/b/a Treasure Land Video, and Tina Alewine, and Great Games, Inc., Docket No. 96-ALJ-17-0520-CC, the Respondent's machine licenses were revoked and she received a Five Thousand and no/100 ($5,000.00) fine for failing "to meet the 'one separate employee' requirement set forth in Regulation 117-190."

9. I find that the appropriate penalty in this case is a total fine of Seven Thousand One Hundred ($7,100.00) Dollars (1) against the Respondent, Tina Alewine and revocation of the above Class III licenses.

CONCLUSIONS OF LAW


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

1. The Administrative Law Judge Division has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 12-4-30 (D) (Supp. 1996) and S.C. Code Ann. § 1-23-320 (Supp. 1996).

2. The Department contends that the Respondents violated S.C. Code Ann. § 12-21-2804(A)(Supp. 1996). That section provides:

After July 1, 1994, the commission [Department] may not issue nor authorize to be maintained any licenses or permits for more than five machines authorized under Section 12-21-2720(A)(3) at a single place or premises.

3. Machines licensed under Section 12-21-2720(A)(3) include video games with a 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. 1996).

4. S.C. Code Ann. § 12-21-2804(A) (Supp.1996) states that the penalty for failing to comply with the maximum number of machines in a "single place or premises" is the revocation of the licenses of machines located in the establishment.

5. S.C. Code Ann. § 12-21-2804(F) (Supp. 1996) states that a person who violates Section 12-21-2804(A) may be fined up to Five Thousand ($5,000.00) Dollars.

6. The Video Game Machines Act ("Act") does not define the term "single place or premises."

7. The Honorable G. Ross Anderson held that the term "single place or premises" is "sufficiently defined and susceptible of a common and ordinary meaning to provide a person of ordinary intelligence a reasonable notice of the prescribed conduct." Reyelt, et al. v. South Carolina Tax Commission, CA No. 6: 93-1491-3 (D.S.C. July 5, 1994). On June 23, 1995, S.C. Code Regs. 117-190 (Supp. 1996) became effective. It provides as follows:

The Video Game Machines Act, found in Article 20, Chapter 21 of Title 12, limits the number of machines that may be located in a "single place" or "premises."

A single place or premises must be a fixed location. It does not include moving property such as a boat or a train, unless such property is permanently affixed to a specific location.

A "single place" or "premises" means a structure surrounded by exterior walls or firewalls consistent with the requirements of the applicable building code (or where no building code is applicable, a one hour rated firewall), provided such exterior walls and firewalls may not have any windows, doors or other openings leading to another area where video game machines are located.

If a structure surrounded by exterior walls has two or more areas where video game machines are located, each surrounded by exterior walls or firewalls as defined and required above, the Department must review all the facts and circumstances to determine if each area in reality constitutes a single place or premise for video game machines. In determining whether each entity is in fact a single place or premises, the Department of Revenue will consider the following factors: (1) Does each entity have at least one separate electric utility meter? (2) Does each entity or business have at least one separate employee on the premises during business hours? (3) Does each entity or business have a separate local business license where required? (4) Does each entity or business have a separate state sales tax license? A positive answer to these four questions is required for each area to be considered a "single place or premises" for purposes of The Video Game Machines Act.

8. Regulation 117-190 requires that each business must have a separate employee on the premises while the business is open. The cardinal rule of statutory interpretation is to ascertain and effectuate the legislative intent wherever possible. Bankers Trust of South Carolina v. Bruce, 275 S.C. 35, 267 S.E.2d 424 (1980). "Full effect must be given to each section of a statute, giving words their plain meaning, and, in the absence of ambiguity, words must not be added or taken away." Hartford Accident and Indem. Co. v. Lindsay, 273 S.C. 79, 254 S.E.2d 301, 304 (S.C. 1979). Thus, the phrase "on the premise" presumptively must have meaning. The employees of a video poker business must be sufficiently connected to an open video game room as to indicate that each game room that is open for business has a specific employee assigned to work solely in that room. I find that the Respondent's video poker businesses did not have an employee specifically assigned to either Game Room A or B.

9. S.C. Code Ann. § 12-21-2802 (Supp. 1996) states: "Each machine licensed under this article (Video Game Machines Act) or Article 19 must have a prominently displayed sign citing the penalties provided by Sections 12-21-2790, 12-21-2792, and 12-21-2794 on the wall above the machine or affixed prominently to the machine."

10. Section 12-21-2802 does not specifically provide a penalty. However, S.C. Code Ann. § 12-54-40(b)(3) provides that: "[a] person who is liable to obtain a license or purchase stamps for identification purposes, who fails to obtain or display the license properly, or who fails to affix the stamps properly, or fails to comply with statutory provisions, is subject to a penalty of not less than fifty dollars nor more than five hundred dollars for each failure." S.C. Code Ann. § 12-54-40(b)(3) (Supp. 1996). Respondent obtained her licenses for her video poker machines pursuant to § 12-21-2720 (A)(3) and therefore her failure to comply with the provisions of § 12-21-2802 subjects her to the above potential fine.

ORDER


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

ORDERED that the licenses listed in Findings of Fact paragraph four are revoked, and a fine of Seven Thousand One Hundred ($7,100.00) Dollars is imposed upon Tina Alewine.

IT IS FURTHER ORDERED that no permits shall be issued for any Class III machine to be operated in any of the above game rooms for a period of six (6) months from the date of this Final Decision.





___________________________

Ralph King Anderson, III

Administrative Law Judge




Columbia, South Carolina

February 5, 1998

1. Five Thousand Dollars of which is for violation of Section 12-21-2804(A) and Reg. 117-190 and $2,100 of which is for the seven violations of the penalty sign provision contained in Section 12-21-2802.


Brown Bldg.

 

 

 

 

 

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