ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This is a case brought by the Respondent for a contested case hearing, pursuant to S.C. Code Ann. §§ 1-23-310, et seq., and 12-4-30 (Supp. 1998). Respondent has appealed an administrative citation issued by the South Carolina Department of Revenue (Department) against it for a violation of the South Carolina Video Game Machines Act (the Act). The Department issued an administrative citation and Final Agency Determination finding that the Respondent had violated the provisions of S. C. Code Ann. § 12-21-2748 (Supp. 1998) by failing to have identification of itself as the owner of a Class III video game machine. A hearing on this matter was held before me on March 12, 1999 at the Administrative Law Judge Division (ALJD or Division).
ISSUES
1. Did the Respondent violate the owner identification requirement of S.C. Code Ann. § 12-21-2748 (Supp. 1998) by failing to have identification properly posted on a Class III video game machine owned by and licensed to the Respondent?
2. If the Respondent did violate the statute, is the penalty of $2,500.00 imposed by the Department under S.C. Code Ann. § 12-21-2738 (Supp. 1998) appropriate?
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. Notice of the time, date, place and subject matter of the hearing was timely given to the Petitioner and the Respondent.
2. Collins Entertainment (Collins) holds South Carolina Class III Coin Operated Device license numbers 635507, 635508 and 635509. Those licenses were attached to a three-station "black jack" machine operated in Phase II at 108-C, Highway 52 South, Monks Corner, South Carolina.
3. On June 20, 1998, South Carolina Law Enforcement Division ("SLED") Special Agent Ramey of the SLED Alcohol Enforcement Unit conducted an inspection of Phase II. After checking the front, rear, and both sides of the Class III three-station "black jack" machine at this location, Agent Ramey noted that the "black jack" machine, bearing license numbers 635507, 635508 and 635509, in Phase II did not have any owner identification attached to the machine. Agent Ramey then asked the manager of the location, Barbara Pendarvis, to recheck the machine to see if she could find any owner identification. Agent Ramey and the manager checked the front, rear, and both sides of the machines. Neither Agent Ramey nor the manager could locate any owner identification on the machine.
4. Phase II is a video poker location with five game rooms that is constructed in a mall-type arrangement. All the other machines in the location were in compliance with the Video Game Machines Act except the "black jack" machine. Respondent’s employee, Mel Marcy, testified that he checked the "black jack" machine the Monday before the inspection and the owner identification was attached to the machine both as an adhesive-backed sticker and under plexiglass before the inspection. Furthermore, Mr. Marcy testified that after the Department cited Collins, he went to Phase II to inspect the machine in question. At that time, though the adhesive backed owner identification sticker had been removed, an owner identification was still affixed to the machine under plexiglass. However, if Mr. Marcy’s testimony is true, the owner identification was not "placed on
an area of the machine which [was] visible for inspection purposes." S. C. Code Ann. § 12-21-2748.
5. Agent Ramey prepared a Preliminary Findings Report citing the Respondent for violating Section 12-21-2748. On the basis of Agent Ramey’s Preliminary Findings Report, the Department assessed a penalty against the Respondent in the amount of $2,500.00 under Section 12-21-2738.
6. I find that the following previous Decisions of the ALJ Division are relevant for consideration in this decision: 97-ALJ-17-0710-CC; 97-ALJ-17-0290-CC, 97-ALJ-17-0310-CC, 97-ALJ-17-0443-CC, 97-ALJ-17-0607-CC, and 97-ALJ-17-0611-CC. See Freeman v. McBee, 280 S.C. 490, 313 S.E.2d 325 (Ct. App. 1984) ("A court can take judicial notice of its own records, files, and proceedings for all proper purposes including facts established in its records"). The above decisions show previous violations of Section 12-21-2748 by the Respondent as found by this Court or admitted by the Respondent in those cases.
7. I find that a penalty of $2,000.00 is appropriate in this case.
CONCLUSIONS OF LAW
Based on the above Findings of Fact, I conclude the following as a matter of law:
1. The Administrative Law Judge Division has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 12-4-30(D) (Supp. 1998) and S.C. Code Ann. § 1-23-320 (Supp. 1998).
2. The Department contends that the Respondent violated S.C. Code Ann. § 12-21-2748 which provides:
Any person who owns or operates devices described in §§ 12-21-2720 and 12-21-2730 must have attached to the machine information identifying the owner or operator of the machine. The identification must be placed on an area of the machine which is visible for inspection purposes. This identification is a condition precedent before the machines may be operated on location. Failure to comply with this requirement subjects the violator to the penalty and enforcement provisions of this chapter and of Chapter 54 as applicable.
3. The Video Game Machines Act which regulates video game machine activity in South Carolina, was enacted in 1993 and became effective on July 1, 1993. The Act is codified at S.C. Code Ann. §§ 12-21-2770, et seq. (Supp. 1998). The express purpose of the Act is to regulate
the video game machine industry in the State of South Carolina.
4. The Respondent in this case violated S.C. Code Ann. § 12-21-2748 on June 20, 1998 by not having proper owner identification affixed to a Class III video game machine it owned at Phase II.
5. The penalty to be imposed for a violation of § 12-21-2748 is provided for in S. C. Code Ann. § 12-21-2738 (Supp. 1998) which provides:
If the violation under this section relates to a machine licensed pursuant to Section 12-21-2720(A)(3), the applicable penalty amount is two thousand five hundred dollars.
Under this statute, both the Department and the ALJD may reduce the amount of the fine to be imposed under Section 12-21-2738 for a violation of Section 12-21-2748 provided that the party found in violation of Section 12-21-2748 can show some extenuating circumstance or "reason" for the violation. However, the Respondent failed to produce sufficient evidence to warrant the reduction of this amount.
6. On June 20, 1998, the Respondent violated S.C. Code Ann. § 12-21-2748. The Respondent had knowledge that its owner identification was either not visible or subject to being lost or removed by patrons. In fact, the Respondent has begun placing the owner identification under plexiglass to insure that the identification stickers are not removed. However, in this case, the adhesive-backed owner identification sticker was removed and the owner identification was either not placed under plexiglass or was not visible. Thus, Respondent negligently failed to take sufficient action in this case to display the owner identification of its machines.
Respondent has been sanctioned for numerous violations of this provision in the past. On the other hand, Respondent has since attempted to reduce the tampering by placing the owner identification under plexiglass. Nevertheless, in this case the Respondent negligently failed to take sufficient action to display the owner identification on the "black jack" machine. I therefore conclude as a matter of law that the Respondent violated the "owner identification" requirement of Section 12-21-2748 and that the appropriate penalty for such violation is $2,000.00 under Section 12-21-2738.
ORDER
Based upon the above Findings of Fact and Conclusions of Law, it is hereby:
ORDERED that the Respondent pay a fine in the amount of $2,000.00 to the Department of Revenue within thirty days from the date of this Order.
AND IT IS SO ORDERED.
_______________________________
Ralph K. Anderson, III
Administrative Law Judge
April 28, 1999
Columbia, South Carolina | 
