Stardancer Casino v. Stewart, Chief of the State Law Enforcement Div., 25335

• Decision Date: 30 July 2001
• Docket Number: 25335
• Parties: Stardancer Casino, Inc., Respondent, v. Robert M. Stewart, Sr., in his official capacity as Chief of the State Law Enforcement Division, Charles M. Condon, in his official capacity as Attorney General for the State of South Carolina, David P. Schwacke, in his official capacity as Solicitor for the Ninth Judicial Circuit, J. Al Cannon, Jr., in his official capacity as Sheriff for Charleston County, Gregory Hembree, in his official capacity as Solicitor for the Fifteenth Judicial Circuit, and Paul S. Goward, in his official capacity as Chief of the Horry County Police Department, Defendants, of whom Robert M. Stewart, Sr., in his official capacity as Chief of the State Law Enforcement Division, Charles M. Condon, in his official capacity as Attorney General for the State of South Carolina, Gregory Hembree, in his official capacity as Solicitor for the Fifteenth Judicial Circuit, and Paul S. Goward, in his official capacity as Chief of the Horry County Police Department are Appellants. OpinionSOUTH CAROLINA Supreme Court Heard
• Court: United States State Supreme Court of South Carolina

Stardancer Casino, Inc., Respondent v Robert M. Stewart, Sr., in his official capacity as Chief of the State Law Enforcement Division, Charles M. Condon, in his official capacity as Attorney General for the State of South Carolina, David P. Schwacke, in his official capacity as Solicitor for the Ninth Judicial Circuit, J. Al Cannon, Jr., in his official capacity as Sheriff for Charleston County, Gregory Hembree, in his official capacity as Solicitor for the Fifteenth Judicial Circuit, and Paul S. Goward, in his official capacity as Chief of the Horry County Police Department, Defendants, of whom Robert M. Stewart, Sr., in his official capacity as Chief of the State Law Enforcement Division, Charles M. Condon, in his official capacity as Attorney General for the State of South Carolina, Gregory Hembree, in his official capacity as Solicitor for the Fifteenth Judicial Circuit, and Paul S. Goward, in his official capacity as Chief of the Horry County Police Department are Appellants

Opinion No. 25335

SOUTH CAROLINA Supreme Court

Heard January 23, 2001

Filed July 30, 2001

Appeal From Charleston County, A. Victor Rawl, Circuit Court Judge

Attorney General Charles M. Condon, Assistant Deputy Attorney General Robert D. Cook, Senior Assistant Attorney General Nathan Kaminski, Jr., Assistant Attorney General Christie Newman Barrett, of Columbia, for appellants Robert M. Stewart, Charles M. Condon, and Gregory Hembree; and Sheryl S. Schelin and Janet Carter, of Conway, for appellant Paul S. Goward.

Saunders M. Bridges, Jr., of Florence, for respondent.

JUSTICE PLEICONES:

This is an appeal from a circuit court order declaring that respondent's operation of a gambling "day cruise to nowhere" (day cruise) is not in violation of any of nine existing state criminal statutes. ¹ We affirm.

Facts

Respondent brought this declaratory judgment action to determine whether any of its activities are unlawful, and to obtain a permanent injunction against appellants (the State).² From a circuit court order declaring respondent's actions not unlawful but denying the injunction, the State appeals.

Respondent's day cruises begin and end at an Horry County port, and make no intervening stops. The United States flag vessel is equipped with gambling devices, including slot machines, blackjack tables, a roulette table, craps tables, and poker tables. Once the ship is beyond South Carolina's three mile territorial waters, gambling is permitted. Before the vessel reenters the territorial waters, the equipment is secured and unavailable for use. The equipment remains on the vessel at all times.

At least one other cruise line operates "day cruises" out of Charleston County. No prosecution has been made or threatened against the cruise line(s) operating out of Charleston, while respondent has been threatened with criminal prosecution and seizure of its gambling devices.

The issue in this case is whether respondent's operations violate any existing state criminal statute.

Federal Law

In order to explain our decision, we find it necessary to briefly review federal law in this area. Prior to 1992, federal law prohibited gambling on any United States flag ship. See 18 U.S.C §1081 (2000)³; 15 U.S.C. §1175(a).⁴ The effect of these federal statutes was to put U.S. flag vessels at a competitive disadvantage in the passenger cruise industry, since the statutes did not prevent foreign flag vessels from offering gambling once the ship was beyond state territorial waters. SeeCasino Ventures v. Stewart, 183 F.3d 307 (4th Cir. 1999), cert. denied ,2000 U.S. Lexis 153 (Jan. 10, 2000); United States v. One Big Six Wheel, 987 F.Supp. 169 (E.D.N.Y. 1997).

In 1992, Congress amended §1175 of the Johnson Act and created several exceptions to its general prohibition on the use or possession of any gambling device on a U.S. flag vessel. 15 U.S.C. §1175(b). Pursuant to the amendment, the possession or transport of a gambling device within state territorial waters is not a violation of §1175(a) if the device remains on board the vessel and is used only outside those territorial waters. §1175(b)(1). Although the effect of this subsection was to permit the operation of "day cruises," another section provided states with a method for having "day cruises" remain a federal offense. §1175(b)(2)(A). Thus, "day cruises" such as that operated by respondent may be subject to federal criminal prosecution under §1175(a) if they begin and end in a state that "has enacted a statute the terms of which prohibit that use . . . ." Id.

As noted above, the issue in this case is whether respondent's operations violate any existing state criminal statute. The amendments to the Johnson Act do not preempt state laws prohibiting gambling and gambling devices, Casino Ventures,supra, and thus the Act has no direct bearing on the issues before the Court. However, while federal litigation pertaining to the meaning of the 1992 amendments was pending, the General Assembly amended several of the relevant state statutes. As explained below, the legislature's expression of intent in amending these statutes is relevant to the issue we decide today.

State Statutes

This declaratory judgment action determined the applicability to respondent's activities of nine criminal statutes. The circuit court held four of the statutes were inapplicable to respondent's operations, and the State concedes that the three lottery statutes⁵ and the bookmaking statute⁶ are not implicated here. Two of the challenged statutes⁷ provide for the seizure and destruction of unlawful gambling and gaming devices. Since we agree with the circuit court that respondent's possession and use of the devices on board its vessel are not unlawful under our substantive state statutes, we need not discuss these two seizure statutes.

We will explain below why respondent's operations do not violate the remaining statutes, S.C. Code Ann. §§16-19-40; 16-19-50; and §12-21-2710.

§16-19-40

Section 16-19-40 provides:

[From and after July 1, 2000,⁸ this section reads as follows:]

If any person shall play at any tavern, inn, store for the retailing of spirituous liquors or in any house used as a place of gaming, barn, kitchen, stable or other outhouse, street, highway, open wood, race field or open place at (a) any game with cards or dice, (b) any gaming table, commonly called A, B, C, or E, O, or any gaming table known or distinguished by any other letters or by any figures, (c) any roley-poley table, (d) rouge et noir, (e) any faro bank (f) any other table or bank of the same or the like kind under any denomination whatsoever or (g) any machine or device licensed pursuant to Section 12-21-2720 and used for gambling purposes, except the games of billiards, bowls, backgammon, chess, draughts, or whist when there is no betting on any such game of billiards, bowls, backgammon, chess, draughts, or whist or shall bet on the sides or hands of such as do game, upon being convicted thereof, before any magistrate, shall be imprisoned for a period of not over thirty days or fined not over one hundred dollars, and every person so keeping such tavern, inn, retail store, public place, or house used as a place for gaming or such other house shall, upon being convicted thereof, upon indictment, be imprisoned for a period not exceeding twelve months and forfeit a sum not exceeding two thousand dollars, for each and every offense.

(emphasis added).

Section 16-19-40 has two clauses; the first prohibits the playing of games in certain locations and the second provides for punishment of the person "keeping" that location. Since it is a criminal statute, it must be construed strictly against the State and in favor of the defendant. State v. Blackmon, 304 S.C. 270, 403 S.E.2d 660 (1991) (strict construction of §§16-19-40 and -60). Ironically, the current statute does not cover respondent's video poker machines. The 1999 amendment added clause (g), which prohibits gambling on a machine licensed pursuant to §12-21-2720. Video poker machines can no longer be licensed, and consequently are not covered by this statute.⁹ State v. Blackmon, supra. At most, then, §16-19-40 may apply to respondent's gaming tables. For the reasons given below, however, we conclude that it does not.

We first consider the portion of the statute that criminalizes the playing of certain games. The statute lists numerous specific locations at which the playing of games are prohibited. Since the list of prohibited locations does not include any term such as 'vessel,' ' ship,' or 'boat,' we hold that the "playing" clause does not apply to respondent's operations. See Brown v. State, ___ S.C. ___, 540 S.E.2d 846 (2001) (where criminal statute very specifically lists locations covered, those not mentioned are excluded, applying maxim expressio unius est exclusio alterius).

Further, because a 'vessel or float' is not a prohibited location under the "playing" clause of §16-19-40, but is a named location under the bookmaking statute, §16-19-130, and because both statutes are part of the anti-gambling criminal statutes, we hold that the circuit court properly concluded this portion of the statute was inapplicable to respondent's operations. See, e.g., Great Games, Inc. v. South Carolina Dep't of Revenue, 339 S.C.79, 529 S.E.2d 6 (2000) (statutes which are part of the same legislative scheme should be construed together).

The portion of §16-19-40 criminalizing the "keeping" of a gaming location uses slightly different language and arguably could be read to cover respondent's gaming table activities. While the "playing clause" lists specific locations, the "keeping clause" punishes "every person so keeping such tavern, inn, retail store, public place, or house used as a place for gaming . . . . " (emphasis added) Respondent's vessel is a public place, and therefore seemingly covered under the literal language of this clause. Reading the statute as a whole, however, we conclude...