Opinion ID: 1270103
Heading Depth: 2
Heading Rank: 1

Heading: Was possession of the machines unlawful?

Text: The seized Cherry Master and 8-Liner machines are illegal gambling devices under § 12-21-2710. The statute provides: It is unlawful for any person to keep on his premises or operate or permit to be kept on his premises or operated within this State any vending or slot machine, punch board, pull board, or other device pertaining to games of chance of whatever name or kind, including those machines, boards, or other devices that display different pictures, words, or symbols, at different plays or different numbers, whether in words or figures or, which deposit tokens or coins at regular intervals or in varying numbers to the player or in the machine, but the provisions of this section do not extend to coin-operated nonpayout pin tables, in-line pin games, and video games with free play feature which meet the technical requirements provided for in Section 12-21-2782 and Section 12-21-2783, or to automatic weighing, measuring, musical, and vending machines which are constructed as to give a certain uniform and fair return in value for each coin deposited and in which there is no element of chance. South Carolina Code Ann. § 12-21-2710 (Supp.1998). This Court's recent decisions in State v. One Coin-Operated Video Game Machine, 321 S.C. 176, 467 S.E.2d 443 (1996)(Cherry Master is an illegal slot machine) and State v. Four Video Slot Machines, 317 S.C. 397, 453 S.E.2d 896 (1995) (Lucky 8 Line is an illegal slot machine) make clear the machines in question are prohibited by the statute. Moreover, appellant admitted in an affidavit that it knew the machines were illegal. Appellant asserts, however, that the statute should not be applied for numerous reasons addressed below.
Appellant contends possession of the machines was not unlawful because federal legislation preempts state law. We disagree. Appellant relies on the Gambling Devices Transportation Act, 15 U.S.C. § 1172(a) (1997), which provides: It shall be unlawful knowingly to transport any gambling device to any place in a State or a possession of the United States from any place outside of such State or possession: Provided, that this section shall not apply to transportation of any gambling device to a place in any State which has enacted a law providing for the exemption of such State from the provisions of this section, or to a place in any subdivision of a State if the State in which such subdivision is located has enacted a law providing for the exemption of such subdivision from the provisions of this section, nor shall this section apply to any gambling device used or designed for use at and transported to licensed gambling establishments where betting is legal under applicable State laws: Provided, further, that it shall not be unlawful to transport in interstate or foreign commerce any gambling device into any State in which the transported gambling device is specifically enumerated as lawful in a statute of that State. 15 U.S.C. § 1172 (1962) (emphasis added). Appellant argues that in enacting this statute, Congress preempted the power of South Carolina to act when the gambling machines have already been placed into the stream of interstate or foreign commerce with a destination `into any State in which the transported gambling device is specifically enumerated as lawful in a statute of that State.' This argument is without merit. First, the federal statute does not pre-empt state law. Federal law may pre-empt a state law as follows: (1) Congress may explicitly define the extent to which it intends to pre-empt state law, (2) Congress may indicate an intent to occupy an entire field of regulation, or (3) federal law may pre-empt state law to the extent the state law actually conflicts with the federal law, such that compliance with both is impossible or the state law hinders the accomplishment of the federal law's purpose. Michigan Canners & Freezers Ass'n v. Agricultural Marketing & Bargaining, 467 U.S. 461, 469, 104 S.Ct. 2518, 81 L.Ed.2d 399 (1984). None of the above scenarios exist here. There is no indication in the statute, explicit or implicit, of Congress's intent to occupy the field of gambling regulation. On the contrary, the language of the federal statute makes it clear that it is designed to act in concert with state laws prohibiting gambling. See Smith v. McGrath, 103 F.Supp. 286 (D.C.Md.1952) (the main purpose of the act is to aid states in the local enforcement of antigambling laws by prohibiting the interstate transportation of gambling devices). The statute prohibits the transportation of gambling devices into any state unless the state has enacted a law exempting itself from the statute or legalizing the specific gambling machine being transported into the state. Thus, the federal statute anticipates state legislation in this area and seeks to provide additional federal protection for those states which do not legalize gambling machines. To hold the federal law nullifies state antigambling laws would be to construe the statute in a way that utterly defeats its purpose. Moreover, compliance with both the state and federal statutes is not impossible, as the federal statute prohibits interstate transportation of gambling machines, whereas the state statute prohibits their possession or operation within the state. See generally Casino Ventures v. Stewart, 183 F.3d 307, 311 (4th Cir.1999) (Congress has explicitly recognized the preeminent state interests in controlling gambling and has sought to extend, not curb, state police power in this field.). Second, the machines in question were not in the stream of interstate commerce. The machines were warehoused in appellant's facility in various states of disrepair, and by all indications had been in storage since the beginning of 1995, when this Court decided State v. Four Video Slot Machines, 317 S.C. 397, 453 S.E.2d 896 (1995). Appellant's bare assertion that it intended to send the machines to Georgia does not place the machines into the stream of interstate commerce. Third, even if the machines were in interstate commerce, they did not comply with the provisions of the Gambling Devices Transportation Act necessary to earn exemption from state law. Section 1174 requires all gambling devices and packages containing such devices to be clearly labeled so that the name and address of the shipper and consignee and the nature of the contents are readily ascertainable from the outside of the package. 15 U.S.C. § 1174 (1962). The circuit court correctly ruled these requirements were designed to put others on notice that the machines are in interstate commerce and to prevent persons from merely asserting that the machines are in interstate commerce to avoid state antigambling laws.

Appellant asserts that due to the sophisticated nature of modern video machines, a machine cannot be illegal unless it is fully operational. In Squires v. South Carolina Law Enforcement Division, 249 S.C. 609, 155 S.E.2d 859 (1967), we held based on the predecessor statute to § 12-21-2710 that gambling devices need not be operational or in complete repair before they are subject to seizure and destruction. Moreover, component parts, subassemblies, and dies and molds used to make such parts are also subject to seizure and destruction. Id. at 613, 155 S.E.2d 859. Appellant argues Squires is outdated and should be overruled. We disagree. The substance of appellant's argument is that in the 1960s, when the predecessor statute to § 12-21-2710 was enacted, slot machines were readily identifiable. Today, with the advent of the computer, a video game machine is simply a box containing a computer which can be configured to play a variety of games, from poker to pac-man; therefore, the machine itself should not be considered illegal. Although slot machines have changed since the 1960s, the substance of the statute has not. The relevant portions of the current version outlaw the same conduct as its predecessor. See id. at 611, 153 S.E.2d at 860 (Section 5-621 of the Code makes it unlawful for any person to keep on his premises any slot machine or other device pertaining to games of chance of whatever name and kind.). The legislature is presumed to be aware of this Court's interpretation of its statutes: Whitner v. State, 328 S.C. 1, 492 S.E.2d 777 (1997), cert. denied, 523 U.S. 1145, 118 S.Ct. 1857, 140 L.Ed.2d 1104 (1998) (there is a basic presumption the legislature has knowledge of judicial decisions construing legislation when later statutes are enacted concerning related subjects). If the General Assembly considered Squires outdated, it could have changed the statute to outlaw only the operation, not the mere possession, of gambling machines when it last amended the statute in 1997. See One Coin-Operated Video Game Machine, 321 S.C. at 181, 467 S.E.2d at 446 (Because we are adhering to our earlier interpretation of a statute, the General Assembly is free to correct any misinterpretation on our part.) (emphasis in original). The plain language of the statute makes clear the legislature's intent to outlaw mere possession of such machines. The statute makes it unlawful for any person to keep on his premises or operate certain gambling machines. S.C.Code Ann. § 12-21-2710 (Supp.1998) (emphasis added); see also State v. Appley, 207 S.C. 284, 288, 35 S.E.2d 835, 836 (1945) (possession of a machine is a violation in itself, separate from the crime of operation). The circuit court correctly ruled possession of these machines is illegal, regardless of their intended use or operation.
The State asserts the machines are contraband per se, such that their possession, without more, constitutes a violation. Appellant asserts that coin-operated video games are not inherently illegal, so the machines are therefore only derivative contraband. We conclude the machines are contraband per se. We have never explicitly used the terms contraband per se or derivative contraband. However, we recognized the theoretical distinction in Medlock v. 1985 Ford F-150 Pick Up VIN 1FTDF15YGFNA22049, 308 S.C. 68, 417 S.E.2d 85 (1992), where we differentiated between controlled substances or other items which are the subject matter of the crime itself and property normally used for lawful purposes. Other states have found gambling machines to be contraband per se under their statutes and have allowed their forfeiture regardless of their use or operability. See, e.g., People ex rel. Waller v. Seeburg Slot Machines, 267 Ill.App.3d 119, 204 Ill.Dec. 567, 641 N.E.2d 997 (1994) (contraband per se ), State v. One Hundred Fifty-Eight Gaming Devices, 304 Md. 404, 499 A.2d 940 (1985) (contraband per se); see also State v. Madere, 352 So.2d 666 (La.1977) (contraband, same result), Bell v. State, 212 Ark. 337, 205 S.W.2d 714 (1947) (contraband, same result), State v. Four Bell Fruit Gum Slot Machines, 196 Okla. 44, 162 P.2d 539 (1945) (contraband, same result). These illegal gambling machines cannot be considered derivative contraband because they are themselves the subject of the statute's prohibition. In light of the statute's clear proscription of mere possession of the machines, see supra part I.B.1, the machines are clearly contraband per se.
Appellant next argues the legislature has indicated its intent that owners of illegal machines may legally store them. Appellant bases its argument on the proceedings surrounding the 1993 county-by-county referendum on video poker, later invalidated by this Court. See Martin v. Condon, 324 S.C. 183, 478 S.E.2d 272 (1996). A second round of referenda was authorized to comport with our Martin decision. In the context of these referenda, the General Assembly enacted § 12-21-2809, which provided: In a county in which a majority of the qualified electors vote or have voted to terminate cash payoffs for credits earned on coin-operated devices in a referendum authorized by Section 12-21-2808, the department shall not issue any license for coin-operated devices as defined in Section 12-21-2720(A)(3) and a person may not own or possess these machines in the county other than for purposes of storage, maintenance, or transportation. S.C.Code Ann. § 12-21-2809 (Supp.1998). Appellant argues this statute demonstrates the legislature's intent to provide a safe harbor for storage of gambling machines declared unlawful. We disagree. The class protected by the statute consists of owners of machines which become illegal as a result of a particular referendum. The machines at issue in this case did not become illegal as a result of that referendum, therefore possession of these illegal machines is not protected. Furthermore, as discussed above, § 12-21-2710 clearly makes mere possession of described machines unlawful. If the statute is clear on its face, we will not look beyond it for the legislature's intent. See Abell v. Bell, 229 S.C. 1, 91 S.E.2d 548 (1956) (if legislative intent is clearly apparent on the face of a statute, the court may not embark upon a search for it).
Appellant argues its reliance on expert advice regarding storage of the machines makes its possession of them lawful. We disagree. After this Court's decisions in State v. One Coin-Operated Video Game Machine, 321 S.C. 176, 467 S.E.2d 443 (1996) and State v. Four Video Slot Machines, 317 S.C. 397, 453 S.E.2d 896 (1995), appellant contacted the Solicitor of the Thirteenth Judicial Circuit requesting guidance regarding storage of illegal machines. In a memorandum to counsel for appellant and respondents, Solicitor Joseph Watson stated he informed appellant and others he would allow them to conditionally possess the machines as follows: 1. The machines would be warehoused, and not stored in any established business. 2. The computer chips would be removed so that even in storage the machines would not be operable. 3. I placed no time limit on such storage, although it was my understanding that these machines would be retooled to become legal video poker machines in the future. Appellant argues its reliance on the Solicitor's advice makes its possession of the machines lawful. The reliance defense is designed to refute the government's proof that the defendant intended to commit the offense. United States v. Miller, 658 F.2d 235, 237 (4th Cir.1981). Its essential elements are: (a) full disclosure of all pertinent facts to an expert, and (b) good faith reliance on the expert's advice. Id. The reliance defense is inapplicable here. Appellant is not being prosecuted under § 12-21-2710, so its intent is not at issue. Even if appellant were subject to criminal charges for possession of the illegal machines, intent is not an element of the statute. The Solicitor's advice does not make possession of these illegal machines lawful.