Video poker monitoring system repealed; refunds for early removal

The video poker monitoring system will not be implemented, the South Carolina Department of Revenue announced today.

After careful review, the Department of Revenue has determined that the state Supreme Court decision in Joytime Amusements v. State of South Carolina triggers repeal of all of Part III of Act 125, which included the provisions for the $500 maximum payout, the new casino license, and the computer monitoring system. Some of Part III went into effect this summer contingent upon the referendum.

The Supreme Court ruled in October that the public referendum on the future of video poker was unconstitutional. In that decision, the court stated that any other provisions of Act 125 which were dependent on the referendum were also struck down, including Part III of the legislation.

The statute=s language indicates that the legislators who crafted the final video poker bill never expected to implement the monitoring system if video poker was banned. No hook-up would have been required if the referendum had resulted in a Ano@ vote.

AIn my opinion, the ban on video poker is the same as a >no= vote,@ said Department of Revenue Director Elizabeth Carpentier. AAnd as a practical matter, it doesn=t make sense to expend state resources on hooking up since there will be no video poker tax. Machine income can be monitored through the existing quarterly reports.@

Carpentier advised Governor Jim Hodges of the conclusion that the monitoring system provisions were effectively repealed. Governor Hodges agreed with the Department of Revenue=s decision.

AIt is clear from reading the Joytime decision and discussing the matter with legislators, that the monitoring system would not be required if video poker was banned,@ said Governor Hodges. AThis decision today is based on the law and common sense.@

In an effort to speed the removal of machines from the state, the Department of Revenue also announced that some machine owners could apply to receive partial refunds of license fees in exchange for surrendering licenses and removing the machines. Under Act 125, those whose machine licenses extend beyond July 1, 2000, to May 31, 2001, may apply for refunds of $1,833, prorated for that period. Most other licenses, which are not refundable, will expire May 31, 2000.

Video poker payouts will be banned in South Carolina after June 30, 2000. In the meantime, operators must comply with the Video Game Machines Act in effect since 1993. The Department of Revenue has determined that the machines will be illegal after June 30 even if they do not make payouts.