Opinion ID: 1281532
Heading Depth: 1
Heading Rank: 4

Heading: Predicate Acts [9]

Text: The circuit court also held that appellants did not plead the existence of two predicate acts that could constitute a pattern of racketeering. The circuit court held that the alleged violations of two sections of the South Carolina Video Game Machines Act cannot serve as predicate offenses under RICO. [10] We disagree. In their complaint, appellants allege respondents have violated §§ 12-21-2791 and 12-21-2804(A) and (B). Section 12-21-2791 provides for a $125 cap on the amount that may be paid out as winnings on a video game machine. This section does not provide any penalty. Violations of this specific section are punishable under § 12-54-40(H) which provides for a civil penalty and not any criminal penalty. [11] Thus, a violation of § 12-21-2791 cannot be a predicate offense for a RICO violation. The circuit court correctly ruled that § 12-21-2791 cannot be a predicate act and, in fact, appellants concede this in their reply brief. Section 12-21-2804(B) provides: No person who maintains a place or premises for the operation of machines licensed under Section 12-21-2720(A)(3) [12] may advertise in any manner for the playing of the machines nor may a person offer or allow to be offered any special inducement to a person for the playing of machines permitted under Section 12-21-2720(A)(3). (emphasis added). Section 12-21-2804(F) provides in pertinent part: A person violating subsections (A), (B), (D), or (E) of this section is subject to a fine of up to five thousand dollars to be imposed by the commission. The commission, upon a determination that the violation is wilful, may refer the violation to the Attorney General or to the appropriate circuit solicitor for criminal prosecution, and, upon conviction, the person must be fined not more than ten thousand dollars or imprisoned not more than two years, or both... Appellants contend respondents violated this section by advertising that jackpots could be won which were in excess of the $125 limit. The circuit court held that § 12-21-2804(B) does not apply to the logos and other identifying information which physically comprise the video game machine. We disagree. Advertising that jackpots greater than $125 may be won is more than a logo. [13] At this stage of these proceedings, we think that the advertising or offering of jackpots could be construed as a special inducement and thus could support a RICO claim. [14] Accordingly, the circuit court erred in dismissing appellants' RICO cause of action alleging violations of §§ 12-21-2804(A) and (B) as predicate acts. [15]