ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before the South Carolina Administrative Law Judge Division pursuant to
requests for a contested case hearing on citations issued by the South Carolina Department of
Revenue (DOR) for violations of the Video Game Machines Act, specifically S.C. Code Ann. §§ 12-21-2804(A), 12-21-2802, and 27 S.C. Code Ann. Regs. 117-190 (Supp. 1997). After notice to the
parties, a hearing was conducted on June 30, 1998 in Aiken. Any issues raised in the proceedings,
but not addressed in this Order are deemed denied pursuant to ALJD Rule 29(C).
FINDINGS OF FACT
I make the following findings of fact, taking into consideration the burden on the parties to
establish their respective cases by a preponderance of the evidence and taking into account the
credibility of the witnesses:
On December 12, 1996, the South Carolina Law Enforcement Division (SLED)
inspected three video gaming businesses known as "My Place," "Our Place," and "Your Place,"
which were located within the same building at 315 Church Street, Williston, South Carolina. The
rooms in which the businesses were contained were joined by a common area, leading to a cashier's
area and two restrooms. At the time of the inspection, My Place, Our Place, and Your Place each
contained five Class III video game machines.
S.C. Amusement Company, Inc. operates My Place, Our Place, and Your Place.
During the inspection, only one employee, Ms. Ward, was located in the building.
She was located in the cashier's room. Two game rooms, Our Place and My Place, were open with
individuals playing the video game machines in both rooms. No employees were located in either
room.
Upon inspection, SLED agents were unable to locate penalty signs citing the penalties
provided by sections 12-21-2790, 12-21-2792, and 12-21-2794 for fourteen of the fifteen machines
located in the building. Ms. Ward also attempted to located the penalty signs but was not able to find
them.
The machines containing the following license numbers were located within Our
Place at the time of the inspection, with the machine licensee indicated in parenthesis: 025562
(Great Games, Inc.), 025596 (Jimmy L. Martin), 025597 (Jimmy L. Martin), 025599 (Jimmy L.
Martin), and 025600 (Jimmy L. Martin).
As a result of the inspection, DOR cited S.C. Amusement Company, Inc., Great
Games, Inc., and Jimmy L. Martin for having more than five video game machines at a single place
or premises in violation of S.C. Code Ann. § 12-21-2804 (Supp. 1997) and 27 S.C. Code Ann. Regs.
117-190 (Supp. 1997).
The Department also cited S.C. Amusement Company, Inc. for failing to post the
required penalty signs on fourteen video game machines.
Prior to the hearing on this matter, DOR reached an agreement with Respondents
Great Games, Inc. and Jimmy L. Martin. The agreement was stated on the record and encompasses
the following terms:
(a) the Class III video game machine licenses held by Jimmy L. Martin and Great
Games, Inc. as reflected in the Final Agency Determination dated July 28, 1997 are
revoked effective June 30, 1998;
(b) Jimmy L. Martin and Great Games, Inc. shall not operate Class III video game
machines at Our Place located at 315 Church Street in Williston, South Carolina for
a period of six months beginning June 30, 1998; and
(c) Jimmy L. Martin and Great Games, Inc. are fined a total of $2,000, payable to
DOR within thirty days of June 30, 1998.
S.C. Amusement Company, Inc. failed to appear at the scheduled time or place for
the hearing. Notice of the hearing was properly sent to Ken McDonald, President of S.C.
Amusement Company, Inc., at the business address. No one contacted the Administrative Law
Judge Division to request a continuance or to notify the Division that S.C. Amusement Company,
Inc. would not appear at the hearing scheduled in this matter.
On December 12, 1996, S.C. Amusement Company, Inc., operated more than five
Class III video game machines licensed to Great Games, Inc., and Jimmy L. Martin at a single place
or premises in violation of S.C. Code Ann. § 12-21-2804 (Supp. 1997) and 27 S.C. Code Ann. Regs.
117-190 (Supp. 1997).
CONCLUSIONS OF LAW
Based upon the Findings of Fact, I conclude as a matter of law, the following:
Pursuant to S.C. Code Ann. §§ 12-4-30(D) and 1-23-310 et seq. (Rev. 1986 & Supp.
1997), the Administrative Law Judge Division has jurisdiction to hear this matter.
Under the Video Game Machines Act, no person shall apply for, receive, maintain,
or permit to be used, licenses for the operation of more than five Class III machines at a single place
or premises. S.C. Code Ann. § 12-21-2804(A) (Supp. 1997).
Under the Act, DOR has the authority to promulgate regulations pertaining to video
poker machines and persons licensed by DOR. S.C. Code Ann. § 12-21-2798 (Supp. 1997).
Pursuant to this statutory authority, DOR promulgated Regulation 117-190 to clarify
the phrase "single place or premises" contained in Section 12-21-2804(A), and the General
Assembly approved these regulations.
S.C. Code Ann. Regs. 117-190 provides in relevant part:
A "single place" or "premises" means a structure surrounded by exterior walls or fire
walls 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 fire walls 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 fire walls 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 or business have a 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 premise" for purposes of the Video Game Machines Act.
Regulation 117-190 clearly requires at least one separate employee on the premises
during business hours.
S.C. Code Ann. § 12-21-2804(A) (Supp. 1997) expressly authorizes DOR to enforce
the provisions of this section and also provides that the penalty for exceeding the maximum number
of video game machines permitted in a single place or premises requires the revocation of the
licenses of machines located in the establishment.
Failure to meet any of the requirements of the "single place or premises" criteria set
forth in 27 S.C. Code Ann. Regs. 117-190 (Supp. 1997) is grounds for revocation of each machine
license in the establishment pursuant to S.C. Code Ann. § 12-21-2804(A) (Supp. 1997).
Additionally, section 12-21-2804(A) provides that no machine license may be issued for, nor a
machine operated at, an establishment in which a license has been revoked for a period of six months
from the date of revocation.
S.C. Amusement Company, Inc., Great Games, Inc., and Jimmy L. Martin have
violated Section 12-21-2804(A) by allowing the operation of more than five Class III video game
machines at a single place or premises.
A person who violates Section 12-21-2804(A) is subject to a fine of up to $5,000.
S.C. Code Ann. § 12-21-2804(F) (Supp. 1997).
As the finder of fact, it is the administrative law judge's prerogative "to impose the
appropriate penalty based on the facts presented." Walker v. South Carolina ABC Comm'n, 305
S.C. 209, 407 S.E.2d 633, 634 (1991).
S.C. Amusement Company, Inc. violated S.C. Code Ann. § 12-21-2802 (Supp. 1997),
which requires each machine licensed under the Video Game Machines Act to have a "prominently
displayed sign citing the penalties provided by Section 12-21-2790, 12-21-2792, and 12-21-2794 on
the wall above the machine or affixed prominently to the machine."
Violation of S.C. Code Ann. § 12-21-2802 warrants a monetary penalty between $50
and $500 for each infraction. S.C. Code Ann. §§ 12-54-40(b)(3) and 12-54-90 (Supp. 1997). A total
monetary penalty of $4,200 against S.C. Amusement Company, Inc. for the penalty signs violation
is appropriate based on the facts presented.
Pursuant to ALJD Rule 23, Respondent S.C. Amusement Company, Inc. has
defaulted. A default occurs in a contested case when a party fails to respond or otherwise prosecute
or defend, or fails to comply with any interlocutory order of the administrative law judge. An
administrative law judge may dismiss or dispose of a contested case adversely to the defaulting party.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
ORDERED, pursuant to agreement reached by Great Games, Inc., Jimmy L. Martin, and the
Department of Revenue, that Class III video game machine licenses listed in the Final Agency
Determination dated July 28, 1998 are revoked effective June 30, 1998. Great Games, Inc. and
Jimmy L. Martin shall not operate Class III video game machines in Our Place at 315 Church Street,
Williston, for a six-month period, beginning June 30, 1998. Great Games, Inc. and Jimmy L. Martin
are fined a total of $2,000, payable to DOR within thirty days of June 30, 1998.
IT IS FURTHER ORDERED that S.C. Amusement Company, Inc. shall not operate any
Class III video game machines in the location of Our Place located at 315 Church Street, Williston,
South Carolina for a six-month period, beginning on the date of this order. S.C. Amusement
Company, Inc., shall pay a total monetary penalty of $9,200 ($5,000 for single place or premise
violation and $4,200 for the penalty signs violation), payable within thirty days of the date of this
order.
IT IS SO ORDERED.
_________________________________
ALISON RENEE LEE
Administrative Law Judge
July 6, 1998
Columbia, South Carolina |