ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before the South Carolina Administrative Law Judge Division ("Division") pursuant to a citation issued
by the South Carolina Department of Revenue ("Department") against the Respondents for violating S.C. Code Ann. §12-21-2804(A) (Supp. 1998) and 27 S.C. Code. Ann. Regs. 117-190 (Supp. 1998). In particular, the Department alleges the
Respondents operated more than 5 Class III Machines at a single place or premises by failing to have an employee on the
premises at all times. After notice to all parties, a contested case hearing was held at the Division on November 16, 1999.
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. Charles S. Miller owns and operates a video gaming establishment located at 3670 Highway 51, Fort Mill, South Carolina
29715.
2. This video gaming establishment is composed of eight (8) video poker rooms separated by a common area.
3. On November 5, 1998, an agent from the South Carolina Law Enforcement Division ("SLED") conducted an inspection
of the video gaming establishment. Three (3) of the eight (8) video poker rooms were closed. The agent noted with regards
to the remaining rooms the following:
LOCATION MACHINE LICENSE NUMBER
Queen of Hearts 3012161
" 3012162
" 3012163
" 3012164
" 3012165
Steve's Place 3012086
" 3932434
" 3932435
" 3011976
" 3012080
Mr. Bill's Place 3011984
" 3011978
" 3011980
" 3011982
" 3011983
Ready Cashes Place 3012171
" 3012172
" 3012173
" 3012174
" 3012175
Miller's Produce 3932431
" 3932432
" 3932433
" 3011981
" 3011985
4. The agents entered two rooms (Steve's Place and Queen of Hearts), which were open and available for play. The agents
were allowed to play Class III machines with no employee on the premises in these two rooms.
5. Upon further inspection, all five rooms that were open were found to be in operation and no employee on the premises.
The machines in all the rooms were on and available for play.
6. Based upon this investigation, the agents issued a Preliminary Findings Report for operating in violation of S.C. Code
Ann. §12-21-2804(A) (Supp. 1998).
7. The South Carolina Department of Revenue issued its Final Agency Determination revoking twenty-five (25) Class III
machine licenses, imposing a penalty of $5,000.00 against Miller for each establishment ($25,000.00), imposing a penalty of
$25,000 against Miller as the machine owner, as well as prohibiting issuance of licenses to the location for a period of six (6)
months.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:
8. Pursuant to S.C. Code Ann. § 12-4-30(D) (Supp. 1998) and 1-23-310 et seq. (Supp. 1998), the South Carolina
Administrative Law Judge Division has jurisdiction in this matter.
9. As the proponent of an Order seeking sanctions against a private party in this contested case, the Department held the
burden of establishing that Respondents violated S.C. Code Ann. §12-21-2804(A) (Supp. 1998). See Am. Jur.2d
Administrative Law §360 (1994).
10. The standard of proof in administrative proceedings is a preponderance of the evidence, absent an allegation of fraud, or
a statute or a court rule requiring a higher standard. E.g. Anonymous v. State Bd. Of Medical Examiners, 329 S.C. 371, 496
S.E.2d 17 (1998).
11. S.C. Code Ann. §12-21-2804(A) (Supp. 1998) prohibits the operation of more than five video game machines at a single
place or premises.
12. Pursuant to the Video Game Machines Act, S.C. Code Ann. § 12-21-2770 et seq. (Supp. 1998), the South Carolina
Department of Revenue has the authority to promulgate regulations pertaining to video poker machines and persons licensed
by the Department. S.C. Code Ann. § 12-21-2798 (Supp. 1998).
13. The Department promulgated 27 S.C. Code Ann. Reg. 117-190 (Supp. 1998) to clarify the phrase "single place or
premises."
14. 27 S.C. Code Ann. Reg. 117-190 (Supp. 1998) requires that each business have at least one separate employee on the
premises during business hours in order to be considered a "single place or premises" for purposes of the Act.
15. 27 S.C. Code Ann. Reg. 117-190 (Supp. 1998) provides in relevant part:
. . .
In determining whether each entity is in fact a single place or premises, the Department of Revenue will consider the
following factors:
(1) Does the 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 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 Games Machines Act.
16. Regulation 117-190 clearly requires that each business entity have a least one separate employee on the premises during
business hours in order to be considered a "single place or premises."
17. In the setting such as 3670 Highway 51, Fort Mill, South Carolina, an employee working anywhere else outside the game
rooms is not "on the premises" of the game room. See South Carolina Dep't of Revenue v. Busters, Inc., and Great Games,
98-ALJ-17-0547-CC (Lee, J., January 29, 1999).
18. S.C. Code Ann. § 12-21-2804(A) (Supp. 1998) expressly authorizes the Department 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.
19. 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. 1998) is grounds for revocation of each machine license in the establishment pursuant to S.C. Code Ann. §
12-21-2804(A) (Supp. 1998). 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.
20. Respondents 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.
21. 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. S.C. Code Ann. § 12-21-2804(A) (Supp. 1998).
22. A person who violates Section 12-21-2804(A) is subject to a fine of up to $5,000 for each violation. S.C. Code Ann. §
12-21-2804(F) (Supp. 1998).
23. 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).
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby
ORDERED, that the twenty-five Class III video game machine licenses, previously identified in this Order as being located
within the same building at 3670 Highway 51, Fort Mill, South Carolina, and licensed for operation by five video gaming
businesses known as "Queen of Hearts," "Steve's Place," "Mr. Bill's Place," "Ready Cashes Place," and "Miller's Produce"
are hereby revoked. This Order does not affect the three gaming businesses known as "Barbara's Place," "Pot of Gold," and
"Lucky Lady."
IT IS FURTHER ORDERED that no Class III video game machine licenses be issued for, nor any Class III machines be
operated at the above-mentioned locations for a period of six months from the date of this Order pursuant to S.C. Code Ann.
§ 12-21-2804 (Supp. 1998).
IT IS FURTHER ORDERED that the Respondent, Charles S. Miller, pay a fine of $10,000.00 within fifteen (15) days
from the date of this Order.
AND IT IS SO ORDERED.
_______________________________
CAROLYN C. MATTHEWS
Administrative Law Judge
December 3, 1999.
Columbia, South Carolina. |
