How did South Carolina RR 95-10 count player stations and licenses on multiplayer video-gaming devices?

Plain-English summary

South Carolina Revenue Ruling 95-10 treated each playable station of a multiplayer video-gaming device as a separate machine.

The cited Video Game Machines Act limited a single place or premises to five machines. The Department reasoned that the statutory definition described a machine available to "the player" using "a video display." Counting an entire multiplayer cabinet as one machine would allow many more than five people to gamble at once and defeat the statutory restriction.

As a result, a multiplayer device could not permit more than five simultaneous players at one place or premises. A six-player video-craps device had to be removed or have one station permanently disabled under the ruling's example.

The same player count controlled licensing. The device needed one Class III license for every person capable of playing at the same time. A five-player device therefore required five licenses, not one license for the shared cabinet.

Common questions

Q: Was one physical cabinet always one machine? No. RR 95-10 counted each player station separately.

Q: Could a six-player device operate under the five-machine limit? Not with all six stations active. The ruling required removal or permanent shutdown of a station in its example.

Q: How many Class III licenses did a multiplayer device need? The maximum number of people who could play simultaneously.

Q: Why did the Department use player stations instead of cabinets? It relied on the statutory wording and the Act's policy against concentrated casino-style operations.

Q: Is this current gaming law? No. It is historical guidance under the 1993 Act and should not be used to establish present legality or licensing.

Citations and references

• S.C. Code Ann. § 12-21-2720(A)(3) (Class III licensing)
• S.C. Code Ann. § 12-21-2772(5) (machine definition)
• S.C. Code Ann. § 12-21-2804(A) (five-machine limit)
• Attorney General opinion to Senator Greg Gregory dated March 24, 1994 (quoted in the ruling)

Subject

Multi Player Video Gaming Devices

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR95-10.pdf

Original ruling text

State of South Carolina

Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214

SC REVENUE RULING #95-10 (TAX)

SUBJECT:

Multi Player Video Gaming Devices
(Video Game Machines)

EFFECTIVE DATE:

June 28, 1995

SUPERSEDES:

All previous documents and any oral directives in conflict
herewith.

Questions:

1. For purposes of determining the maximum number of machines that may be
   operated in a single place or premises under Code Section 12-21-2804(A)of the
   Video Game Machines Act, is each player station of a multi player video gaming
   device 1 a machine under Code Section 12-21-2772(5)?
2. How many Class III licenses as authorized by Code Section 12-21-2720(A)(3)
   must be displayed on a multi player video gaming device?
   Conclusions:
3. For purposes of determining the maximum number of machines that may be
   operated in a single place or premises under Code Section 12-21-2804(A), each
   player station of a multi player video gaming device is a machine under Code
   Section 12-21-2772(5).
4. The number of Class III licenses required under Code Section 12-21-2720(A)(3)
   for a multi player video gaming device must equal the maximum number of
   players that can play the device at any one time.

1

For purposes of this document, a "multi player video gaming device" is a video game device
with a free play feature which allows more than one person to play the device at one time.

1

Facts:
Recently, multi-player video gaming devices have been introduced into the South
Carolina market. Such devices allow up to five or six persons to play games, such as
blackjack and craps, at one time. In the future, such devices may allow 10, 15, 20 or more
persons to play the device at one time. Questions have arisen as to whether these devices
are permissible under the Video Game Machines Act of 1993 and as to how many Class
III licenses must be purchased for each of these devices.
Discussion:
Video Game Machines Act
In 1993 the General Assembly enacted the Video Game Machines Act which regulates
video games with free play features. This act regulates the hours of operation; the age of
players to whom payouts may be made; residency of machine licensees; location of the
establishment; the number of machines allowed at a single place or premises; the
maximum amount of any cash payouts; and various other aspects of the video gaming
industry.
Code Section 12-21-2772(5) defines the term "machine" to mean:
... an electronic video games machine that, upon insertion of cash, is
available to play or simulate the play of games as authorized by the
commission utilizing a video display and microprocessors in which the
player may receive free games or credits that can be redeemed for cash.
The definition of "machine" uses words in the singular number, such as "a video display"
and "the player".
Where a statute is clear and unambiguous, there is no room for construction and the terms
of the statute must be given their literal meaning. Duke Power Co. v. South Carolina Tax
Commission, 292 S.C. 64, 354 S.E.2d 902, 903 (1987).
Based on the clear meaning of the definition, a video gaming machine is a device that
allows only one person to play at a time. As such, any device that allows more than one
person to play it at a time must be more than one machine for purposes of the Video
Game Machines Act.
The General Assembly's intent with respect to this matter can be determined by reviewing
an Attorney General's opinion issued March 24, 1994 to the Honorable Greg Gregory of
the South Carolina Senate.

2

The opinion concerns the statutory restriction on the number of machines allowed in a
"single place or premises", and states in part:
The Video Game Machines Act [Act] was enacted by the General Assembly in
1993 to regulate video gambling activities in South Carolina. The cardinal rule
of statutory interpretation is to ascertain and give effect to the legislative intent.
Horn v. Davis Electric Contractors, Inc., 307 S.C. 559, 416 S.E. 2d 634 (1992);
State v. Martin, 293 S.C. 46, 358 S.E. 2d 697 (1987); State v. Salmon, 279 S.C.
344, 306 S.E. 2d 620 (1983). Most often, legislative intent is determined by
applying the words used by the General Assembly in their usual and ordinary
significance. Martin v. Nationwide Insurance Company, 256 S.C. 577, 183
S.E. 2d 451 (1971). However, a statute should be construed in a reasonable
manner consistent with the statutory goals, purpose, design, and policy of the
Legislature. State v. Baker, S.C. , 427 S.E. 2d 670 (1993); State v. Squires,
S.C. , 426 S.E. 2d 738 (1992). Our Court has instructed that a gambling
scheme that seeks to evade the law's intent is an unlawful one. Cf. Darlington
Theaters, Inc. V. Coker, 190 S.C. 282, 2 S.E. 2d 782 (1937).
One of the broad areas that the Act regulates is that of the location or
placement of video gambling machines. In this regard, two related legislative
themes are apparent. First, the General Assembly was concerned that largescale casino-type operations are inimical to public welfare and, thus,
concentrations of video gambling machines should be prohibited. In order to
accomplish this goal, the General Assembly prescribed three types of
regulations. The General Assembly directed that only a limited number of
gambling machines could be situated at a single place or premises. Supra,
Section 12-21-2804(A). The General Assembly also prohibited advertising of
these gambling machines. Supra, Section 12-21-2804(B). In addition, the
General Assembly required that a business's gambling operations not provide
its principal revenue source. Supra, Section 12-21-2804(A). 2
Second, the General Assembly was concerned that gambling activities should
not occur with prescribed distances of schools, churches and playgrounds.
Supra, Section 12-21-2793. The language of the various provisions of the Act
should be construed in a manner consistent with these basic themes.
Based on the above, it would be in conflict with public policy to consider a multi-player
video gaming device to be a single machine. This would be inconsistent with the General
Assembly's theme that large-scale casino-type operations are inimical to public welfare.
2

The State Attorney General noted the following in a footnote concerning this requirement: "I
advise that the United States District Court has enjoined the enforcement of this particular
provision; nonetheless, the regulation demonstrates the General Assembly's regulatory theme."
3

Such a device, if treated as a single machine, would:
1.

allow up to 30 players to gamble at one time if a location had 5 craps
devices 3 ;

2.

allow up to 25 players to gamble at one time if a location had 5 blackjack
devices 4 ; or,

3.

allow up to 100 players to gamble at one time if a location had 5 devices that
each allow 20 players to play at one time.

The courts will not favor an interpretation that would render the statute meaningless or futile.
Fulghum v. Bleakley, 177 S.C. 286, 181 S.E. 30 (1935). See Statutes Key No. 212.4, 212.5.
An interpretation that considers a multi player video gaming device as one machine
would defeat the purpose of limiting a single place or premises to five video game
machines - making its enactment meaningless and futile.
Therefore, each player station of a multi player video gaming device is a machine for
purposes of determining the maximum number of machines that may be operated in a
single place or premises under Code Section 12-21-2804(A). In addition, multi player
video gaming devices may not allow more than five persons to play at any time;
otherwise, the single place or premises where video gaming occurs would violate the
statutory provisions that limit the number of machines in a single place or premises to
five.
COIN-OPERATED DEVICE LICENSING
Before we determine how many licenses are required of the devices in question, the
provisions of Code Section 12-21-2724 should be reviewed.
Code Section 12-21-2720(A)(3) sets forth the licensing requirements with respect to
video poker and other similar coin operated machines, and reads in part:
3

The most popular version of a video craps device on the market in this State allows up to six
persons to play at one time. Effective July 2, 1995, this device would cause a single place or
premises to exceed the statutory provisions that limit a single place or premises to five machines.
As such, this device must either be removed from the single place or premises or one of the
player stations in the device must be permanently shut down (coin box removed, computer board
removed, etc.).
4
The most popular version of a video blackjack device on the market in this State allows up to
five persons to play at one time.

4

(A) Every person who maintains for use or permits the use of, on a place or
premises occupied by him, one or more of the following machines or
devices shall apply for and procure from the South Carolina Department of
Revenue and Taxation a license effective for two years for the privilege of
making use of the machine in South Carolina and shall pay for the license a
tax of fifty dollars for each machine in item (1), two hundred dollars for
each machine in item (2), and three thousand dollars for each machine in
item (3):

(3) a machine of the nonpayout type, in-line pin game, or video game with
free play feature operated by a slot in which is deposited a coin of thing of
value ...
In considering this issue we cannot be governed by the apparent meaning of words in one
clause, sentence, or part of the statute, but rather by the statute as a whole. City of
Spartanburg v. Leonard, 180 S.C. 491, 186 S.E. 395(1936).
In reviewing the statute as a whole, a multi player video gaming device must be licensed
based on the number of persons capable of playing the device at one time.
SOUTH CAROLINA DEPARTMENT OF REVENUE

s/Burnet R. Maybank III
Burnet R. Maybank, III, Director
Columbia, South Carolina
June 28
, 1995
For questions concerning this matter, please contact your local Taxpayer Service Center
as follows:
Aiken
Beaufort
Charleston
Columbia
Florence

(803) 641-7685
(803) 524-2852
(803) 571-3000
(803) 737-4602
(803) 661-4850

Greenville
Myrtle Beach
Rock Hill
Spartanburg

5

(803) 241-1200
(803) 293-6550
(803) 324-7641
(803) 594-4900