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. The Players Club of Georgetown, L.L.C., et al

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
South Carolina Department of Revenue

Respondents:
The Players Club of Georgetown, L.L.C., and Carlisle S. Carter, d/b/a Carter Amusement
 
DOCKET NUMBER:
98-ALJ-17-0245-CC

APPEARANCES:
Carol I. McMahan, Attorney for Petitioner

William R. Hearn, Jr., Attorney for Respondents
 

ORDERS:

FINAL ORDER AND DECISION

This matter comes before me upon Respondents' request for a contested case hearing after being cited by the South Carolina Department of Revenue (DOR) for alleged administrative violations of S.C. Code Ann. § 12-21-2804(A) (Supp. 1997) of the Video Game Machines Act, and 27 S.C. Code Ann. Regs. 117-190 (Supp. 1997) for not having "at least one separate employee on the premises during business hours" in Players Club I and S.C. Code Ann. § 12-21-2703 for not having a retail tax license for Players Club III. A contested case hearing in this matter was held in Georgetown, South Carolina, on June 8, 1998. Based upon the relevant and probative evidence and the applicable law, I find Respondents violated R. 117-190 and S.C. Code § 12-21-2804, but did not violate§ 12-21-2703. Accordingly, the machine licenses in Players Club I are hereby revoked, and no Class III machines shall be operated in that game room for a period of six (6) months. Respondent Players Club, L.L.C. is ordered to pay a penalty of Three Thousand Five Hundred Dollars ($3,500). No fine is imposed against Carlisle S. Carter, d/b/a Carter Amusement.

FINDINGS OF FACT

By a preponderance of the evidence, I find:

  1. On or about August 13, 1997, at 220 Church Street, Georgetown, South Carolina, a video gaming business was operating as The Players Club Video Mall in a structure which included a common area, office and storage areas, and three video game rooms containing Class III video game machines.
  2. Class III video game machines were located at each of the three game rooms at the subject location, known as Players Club I, Players Club II, and Players Club III.
  3. Respondent, The Players Club of Georgetown, L.L.C., is the retail operator of all three game rooms at Players Club, managing all employees and operating each of the subject game rooms and machines.
  4. Carlisle S. Carter, d/b/a Carter Amusement, is the licensee of each of the Class III video game machines located at 220 Church Street, Georgetown, South Carolina.
  5. Carlisle S. Carter, d/b/a Carter Amusements placed the machines at the subject location and provided mechanical maintenance of the machines, but exercised no management control or supervision over the operation of the game rooms or its employees.
  6. SLED Agents Pam Williamson and Benny Webb inspected the video-gaming businesses at 220 Church Street, Georgetown, South Carolina, on August 13, 1997.
  7. Two of the three game rooms containing Class III machines at 220 Church Street, Georgetown, Players Club I and Players Club II, were open for business at the time of the inspection, and the Class III video game machines within those rooms were on and operating.
  8. The doors from the commons area to Players Club I and Players Club II were open, the video poker machines were on and operating, and there were no indications that the two subject rooms were closed.
  9. The SLED agents entered each of the two open game rooms and played the video game machines.
  10. No employee was present in Players Club I while the SLED agents were in that game room playing the machines.
  11. An employee was present in Players Club II during the inspection.
  12. The following video game machine licenses were affixed to machines located in Players Club I: 3802308, 3924086, 3924087, 3924088, and 3924089.
  13. The Players Club of Georgetown, L.L.C. held retail sales licenses #022-102813 and #022-102822, respectively, for game rooms Players Club I and Players Club II.
  14. The SLED agents also inspected Players Club III.
  15. Players Club III did not have a retail sales license.
  16. Players Club III was closed for business and not in operation at the time of the inspection.
  17. Players Club III contained three licensed Class III video game machines.
  18. The three licensed Class III video game machines in Players Club III were not plugged in or in operation.
  19. At no time during or prior to the inspection did any customers ever play video game machines in Players Club III, nor was Players Club III ever open for business.
  20. The SLED agents left a Preliminary Findings Report with the manager of the location at the conclusion of the inspection.
  21. Notice of the time, date, place and subject matter of the hearing was given to the Petitioner and Respondents.
  22. The Court takes judicial notice of the Final Orders and Decisions in the following cases in which Petitioner DOR and Respondent Carter Amusement were previously litigants in video poker cases: DOR v. Michael Kocak and Carter Amusements, ALJD Docket No. 97-ALJ-17-0685-CC, Filed April 13, 1998 (charges against Carter dismissed); and DOR v. C.S. Carter, d/b/a Carter Amusements, and Roger Landingham, ALJD Docket No. 97-ALJ-17-0270-CC, Filed November 20, 1997 (Carter's licenses revoked, but no fines imposed on Carter).


CONCLUSIONS OF LAW

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

  1. The Administrative Law Judge Division has jurisdiction to hear and decide this matter pursuant to the Administrative Procedures Act (APA), S.C. Code Ann. §§ 1-23-310 et seq. (1986 & Supp. 1996), S.C. Code § 12-4-30(D), and §§ 12-60-1310 through 12-60-1350 of the South Carolina Revenue Procedures Act (RPA).
  2. The Video Game Machines Act, S.C. Code Ann. §§ 12-21-2770, et seq. (Supp. 1996) became effective on July 1, 1993, to regulate the video game machines industry and to prevent large-scale casino-type gambling operations in the State of South Carolina. See Reyelt v. South Carolina Tax Comm'n, 6:93-1491-3 and 6:93-1493-3 (U.S. Dist. Ct., Greenville, S.C., Nov. 15, 1993); see also 1994 Op. S.C. Att'y Gen. 21.


  1. Video Game Machines Act § 12-21-2804(A) prohibits a person from applying for, receiving, maintaining, or permitting to be used permits for the operation of more than five Class III machines at a single place or premises.
  2. DOR regulations clarify the meaning of "single place or premises" (for purposes of the Video Games Machines Act):

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.

27 S.C. Code Ann. Regs. 117-190 (Supp. 1996) (emphasis added).

  1. Respondent Players Club, L.L.C. failed to have "one separate employee" within Players Club I, at the time of inspection, in violation of R. 117-190.
  2. Respondent Players Club, L.L.C. violated S.C. Code Ann. § 12-21-2804 by operating video machines in a location failing to meet all requirements of the "single place or premises" criteria set forth in R. 117-190 by virtue of its failure to have a employee on the premises of Players Club I while it was open and in operation.
  3. Respondent Players Club, L.L.C. did not violate S.C. Code Ann. § 12-21-2804 by operating video machines in a location failing to meet all requirements of the "single place or premises" criteria set forth in R. 117-190 by virtue of not having a separate sales tax license for Players Club III, because Players Club III was never open for business nor operated as a game room.
  4. S.C. Code Ann. § 12-21-2703 (Supp. 1996) provides that no licensed Class III machine may be operated at a location unless the location has a retail license issued by DOR.
  5. Respondent Players Club, L.L.C. did not violate S.C. Code Ann. § 12-21-2703 in Players Club III by operating video machines in a location failing to have a retail sales license for the game room because, although licensed Class III machines were present at Players Club III, the machines were not in operation and the game room was never open for business.
  6. Under § 12-21-2804(A), a license on a video poker machine must be revoked by virtue of its misuse under the Act, regardless if the actual violator is the retail licensee, machine owner, or lessee. A monetary fine under § 12-21-2804(F), however, must be imposed only upon those persons directly involved in the management or operation of the location, in violation of § 12-21-2804(A).
  7. The statute clearly states that a "person violating subsections . . . of this section is subject to a fine . . . ." S.C. Code Ann. § 12-21-2804(F) (Supp. 1996). Each individual person or entity found in violation of the statute is subject to the monetary penalty for each individual violation.
  1. Section 12-21-2804(F) (Supp. 1996) provides that a person who violates § 12-21-2804(A)

is subject to a fine of up to $5,000.

  1. Within statutory limits, the amount of a fine is a matter of trial-court discretion. State v. Sheppard, 54 S.C. 178, 32 S.E. 146 (1899). An administrative law judge, as fact finder, has the prerogative "to impose an appropriate penalty based on the facts presented." Walker v. South Carolina ABC Comm'n, 305 S.C. 209, 211, 407 S.E.2d 633, 634 (1991).
  2. Under the circumstances of this case, a fine of $3,500 imposed upon Respondent, The Players Club of Georgetown, L.L.C., is reasonable and appropriate.
  3. Because Carlisle S. Carter d/b/a Carter Amusements was merely the owner/licensee of the machines in question and exercised no control or management of the subject game room or its employees being operated by the retailers, Carter should not be assessed a monetary penalty for the failure to maintain a separate employee for each game room under the provisions of S.C. Code Ann. §§ 12-21-2804(A) and 12-21-2804(F).
  4. Section 12-21-2804(A) provides that "[n]o license may be issued for a machine in an establishment in which a license has been revoked for a period of six months from the date of revocation."




  1. The trier of fact must weigh and pass upon the credibility of evidence presented. See S.C. Cable Television Ass'n v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992).
  2. The trial judge is in the best position to weigh witnesses' demeanor and veracity and to evaluate their testimony. See McAlister v. Patterson, 278 S.C. 481, 299 S.E.2d 322 (1982); Peay v. Peay, 260 S.C. 108, 194 S.E.2d 392 (1973); Mann v. Walker, 285 S.C. 194, 328 S.E.2d (Ct. App. 1985); Marshall v. Marshall, 282 S.C. 534, 320 S.E.2d 44 (Ct. App. 1984).
  3. Words used in a statute should be given their ordinary and popular meaning, unless there is something in the statute which requires a different interpretation. Hughes v. Edwards, 265 S.C. 529, 220 S.E.2d 231 (1975). A court cannot construe a statute without regard to its plain and ordinary meaning, and may not resort to subtle or forced construction in an attempt to limit or expand a statute's scope. Paschal v. State Election Comm'n, 454 S.E.2d 890, 317 S.C. 434 (1995); see Berkebile v. Outen, 311 S.C. 50, 426 S.E.2d 760 (1993).
  4. If a statute's language is plain and unambiguous, and conveys a clear and definite meaning, there is no occasion for employing rules of statutory interpretation and the court has no right to look for or impose another meaning. Paschal v. State Election Comm'n, 454 S.E.2d 890, 317 S.C. 434 (1995); see Miller v. Doe, 312 S.C. 444, 441 S.E.2d 319 (1994).
  5. Section 12-21-2804(A) also provides that "[n]o license may be issued for a machine in an establishment in which a license has been revoked for a period of six months from the date of revocation."
  6. Revocation of the licenses is proper because the statute clearly states that the license "shall" be revoked. S.C. Code Ann. § 12-21-2804(A) (Supp. 1996).
  7. Subsequent expiration of video machine licenses does not render the revocation a moot point because the licenses were valid at the time the violation occurred.
  8. A statute that provides sanctions to further the goals of the government and public policy in promoting compliance with existing laws and regulations is remedial in nature. Cf. State v. Thrift, 312 S.C. 282, 440 S.E.2d 341 (1994); State v. Blick, 481 S.E.2d 452 (S.C. Ct. App. 1997) (administrative disciplinary action encouraging good behavior and rules compliance remedial in nature).


  1. "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). Accordingly, judicial notice is taken of the prior proceedings and orders issued in previous cases in which Respondent Carlisle S. Carter d/b/a Carter Amusement was a party: DOR v. Michael Kocak and Carter Amusements, ALJD Docket No. 97-ALJ-17-0685-CC, Filed April 13, 1998; and DOR v. C.S. Carter, d/b/a Carter Amusements, and Roger Landingham, ALJD Docket No. 97-ALJ-17-0270-CC, Filed November 20, 1997.
  2. Pursuant to ALJD Rule 29(B), any issues or motions raised at the hearing but not addressed in this Order are deemed denied.


ORDER

IT IS THEREFORE ORDERED that the following video game machine licenses owned by Respondent Carlisle S. Carter, d/b/a Carter Amusement, are revoked: 3802308, 3924086, 3924087, 3924088, and 3924089.

IT IS FURTHER ORDERED Respondent, The Players Club of Georgetown, L.L.C., shall pay a monetary fine to DOR in the amount of Three Thousand Five Hundred Dollars ($3,500) within fifteen (15) days of the date of this Order.

IT IS FURTHER ORDERED that no Class III machines shall be operated in Players Club I, at 220 Church Street, Georgetown, South Carolina, for a period of six (6) months from the date of revocation of the licenses.

IT IS FURTHER ORDERED that the charge for failure to have a retail sales license in Players Club III is dismissed with prejudice.

AND IT IS SO ORDERED.



_____________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

June 25, 1998

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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