ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter is before the Administrative Law Judge Division pursuant to S.C. Code Ann. §
12-4-30(D) (Supp. 1997) and S.C. Code Ann. § 1-23-600 (Supp. 1997) upon Respondent's request
for a contested case hearing. South Department of Revenue ("DOR") seeks a $500 penalty against
Respondent Piedmont Tool & Supply Co., Inc. ("Piedmont") for tendering cash payouts in excess
of $125 in a twenty-four hour period in violation of S.C. Code Ann. § 12-21-2791 (Supp. 1997).
After notice to all parties, a hearing was conducted on October 26, 1998. Based upon the evidence
presented and the applicable law, a $500 penalty is imposed. Any motions or 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:
1. All parties were given notice of the date, time and place of the hearing.
2. On March 11, 1998, South Carolina Law Enforcement Division ("SLED") agents
Brunson Ashley Asbill and Melton Robert Jones conducted an undercover investigation of Beach
Video Games, a video gaming business operated by Respondent and located at 1820 Highway 321,
Bowling Green, South Carolina.
3. During the investigation, agent Asbill played "Pot O' Gold," a coin-operated video
poker machine licensed pursuant to S.C. Code Ann. § 12-21-2720(A)(3) (Supp. 1997) ("Class III
machine"). Agent Asbill inserted ninety-five dollars into the machine and built up 3,320 credits,
worth $166, while playing. Agent Jones was seated nearby and offered suggestions to agent Asbill,
but did not play the machine.
4. Agent Asbill pushed the payout button on the machine he was playing and received
Ticket No. 00000777 showing credit for $125. The time stamped on this ticket was "13:25:46."
Agent Asbill immediately pushed the payout button a second time and received Ticket No. 00000778
showing credit for $41. The time stamped on the second ticket was "13:26:00."
5. Agent Asbill took the tickets to the room attendant, who presented the tickets to the
manager, Donna Hayes. The tickets had a signature line for the player below the following printed
words: "I CERTIFY THAT I HAVE NOT WON MORE THAN $125 IN THE LAST 24 HOURS."
Ms. Hayes did not ask agent Asbill to sign the tickets.
6. Ms. Hayes paid Asbill the total cash amount of $166, with no questions asked.
7. On March 11, 1998, after receiving the $166 payout, agent Asbill issued a Preliminary
Findings Report for exceeding the maximum $125 payout in violation of S.C. Code Ann. § 12-21-2791 (Supp. 1997).
8. In its June 23, 1998 Final Administrative Determination, DOR assessed a $500
penalty against Respondent for violation of S.C. Code Ann. § 12-21-2791 (Supp. 1997).
DISCUSSION
Respondent's manager Donna Hayes testified that on the date of the alleged violation, the
room attendant brought the SLED agents to her and asked her to issue a cash payout to "these
gentlemen here." Hayes testified that they assumed that both men were playing the Pot O' Gold
machine since they both were stationed in front of the machine. Respondent argues that its
employees intended payouts to be issued to separate persons for each of the two tickets presented,
and therefore, there was no violation of the $125 per person limit imposed by S.C. Code Ann. § 12-21-2791.
I find Respondent's argument unpersuasive in light of the fact that only one of the SLED
agents presented the tickets to the room attendant. Further, the time stamped on each ticket indicated
that only a few seconds had elapsed between the printing of each, which should have placed
Respondent's employees on notice that both tickets corresponded to credits for the same player.
Additionally, it is fair to assume that even if more than one person is stationed in front of a machine,
the person who is actually operating the controls of the machine is the only person who receives the
credits subject to the limit set forth in section 12-21-2791.
Respondent took no steps to ascertain who actually won the credits or who actually received
the corresponding cash redemption in this case. The cashier in charge of issuing the payouts should
not merely rely on the request of the room attendant to determine who is due a cash payout and the
amount(s) due; when it is unclear who actually received the credits, there is a duty to inquire into
these details. Therefore, Respondent was properly cited for violation of S.C. Code Ann. § 12-21-2791 (Supp. 1997).
CONCLUSIONS OF LAW
Based upon the Findings of Fact, I conclude as a matter of law, the following:
1. Jurisdiction is vested with the Administrative Law Judge Division pursuant to S.C.
Code Ann. § 12-4-30(D) (Supp. 1997) and S.C. Code Ann. § 1-23-600 (Supp. 1997).
2. Any location which operates or allows the operation of coin-operated machines
pursuant to S.C. Code Ann. § 12-21-2720(A)(3) and which provides payouts shall limit the cash
payout for credits earned for free games to two thousand five hundred credits per player per location
during any twenty-four hour period, and the cash value of credits for each free game is limited to five
cents. S.C. Code Ann. § 12-21-2791 (Supp. 1997).
3. On March 11, 1998, Respondent violated S.C. Code Ann. § 12-21-2791 (Supp. 1997)
by tendering cash payouts exceeding $125 per person in a twenty-four hour period.
4. 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).
5. Pursuant to S.C. Code Ann. § 12-21-2703 (Supp. 1997), Respondent was required
to obtain a retail license to operate Class III machines at the location. Therefore, the applicable
provision authorizing a penalty in this case is S.C. Code Ann. § 12-54-40(b)(3) (Supp. 1997), which
states, in pertinent part:
A person who is liable to obtain a license . . . for identification
purposes, who . . . 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. 6. A penalty of $500 is appropriate under the circumstances of this case.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
ORDERED that Respondent Piedmont Tool & Supply Co., Inc. violated S.C. Code Ann. §
12-21-2791 by paying in excess of the limit on credits earned for free games. It is
FURTHER ORDERED that the Respondent shall pay a $500 penalty to the South Carolina
Department of Revenue.
AND IT IS SO ORDERED.
______________________________
ALISON RENEE LEE
Administrative Law Judge
December 9, 1998
Columbia, South Carolina |
