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In re Support License #A8365-14-SP

Supreme Court of South Dakota

June 20, 2018

CHARLES JOHNSON, Defendant and Appellee. SOUTH DAKOTA COMMISSION ON GAMING, Plaintiff and Appellant,

          ARGUED ON MAY 22, 2018


          MICHAEL F. SHAW KATIE J. HRUSKA of May, Adam, Gerdes & Thompson LLP Pierre, South Dakota Attorneys for appellant.

          ROGER A. TELLINGHUISEN MICHAEL V. WHEELER of DeMersseman, Jensen, Tellinghuisen & Huffman LLP Rapid City, South Dakota Attorneys for appellee.


         [¶1.] After concluding that Charles Johnson mishandled money while working in a casino and that he was dishonest in the subsequent investigation, the South Dakota Commission on Gaming revoked Johnson's gaming support license and banned him from entering any gaming establishment in South Dakota. Johnson appealed the Commission's decision to the circuit court, which reversed the Commission's decision. The Commission now appeals to this Court. We reverse the circuit court's decision and affirm the Commission's decision.

         Facts and Procedural History

         [¶2.] In September 2016, Charles Johnson held a gaming support license and was employed at Tin Lizzie's Casino in Deadwood as a dealer and pit supervisor. At the time, Johnson had held a gaming license in South Dakota for nearly three years. Before coming to South Dakota, Johnson had held a gaming license in the State of Washington, where he worked in the gaming industry for over 13 years.

         [¶3.] On September 19, 2016, Johnson was working as a pit supervisor at Tin Lizzie's when Mark Haddad visited the casino. Johnson and Tin Lizzie's general manager, Austin Burnham, recognized Haddad as a suspected cheater and the subject of an ongoing investigation by the Commission. While Burnham attempted to contact the Commission, Johnson assumed the role of "stickman" at the craps table where Haddad began gambling. Unable to reach the Commission, Burnham returned to the table, where Johnson had already transitioned to the role of dealer.[1] At the time Burnham returned, Haddad had $20 in chips on the table: one $15 bet, one $4 bet, and a $1 tip. Burnham asked Haddad for identification, and when Haddad refused, Burnham asked him to leave.

         [¶4.] As Burnham asked Haddad to leave, Haddad placed his hand on the chips remaining in his tray. Johnson picked up the chips comprising Haddad's $15 bet and placed them in Haddad's chip tray. Still facing Burnham, Haddad walked away with only the chips in his tray that he had already placed his hand on; he left behind the $15 in chips that Johnson had returned to the tray. After Haddad left the table, Johnson picked up the $15 in chips from Haddad's tray as well as the other $5 in chips that Johnson had forgotten were still on the table. Johnson placed the chips next to the table's bank, placing a marker on top of the chips to indicate they were not part of the bank. After the only other player at the table left, Johnson placed the entire $20 in chips in the tip box.[2]

         [¶5.] On September 29, 2016, Brandon Snyder, an enforcement agent working for the Commission, responded to Burnham's September 19 report. While reviewing video recordings of Haddad's activities at Tin Lizzie's, Agent Snyder noticed that Johnson had placed Haddad's chips in the tip box. On September 30, Agent Snyder interviewed Burnham as well as Tin Lizzie's table-games manager, Donica Schumacher. Burnham and Schumacher both advised Agent Snyder that the casino's policy on found or unclaimed chips is to hold the chips if the identity of the owner is known and to place the chips in the cage if the owner is unknown. [¶6.] Agent Snyder also interviewed Johnson on September 30, 2016, regarding the incident. Johnson asserted that when he returned the $15 in chips to Haddad's tray, he also informed Haddad that those chips belonged to Haddad. Johnson further asserted that a second player at the craps table also tried to tell Haddad that he had chips remaining at the table. When Agent Snyder asked Johnson what happened after the second player left, Johnson responded: "[W]ell we weren't going to get any more play, so, we didn't know what the guy wanted, so we just dropped it in the tip box." Agent Snyder asked Johnson to provide a written statement on a form provided by the Commission. When agent Snyder returned to Tin Lizzie's several days later, he saw a blank form like the one he left for Johnson and assumed Johnson had not completed it.

         [¶7.] On November 4, 2016, Agent Snyder filed a complaint against Johnson, alleging that he took the property of another without notifying the box person or pit supervisor. Johnson answered the complaint sometime in November or early December 2016.[3] In his answer, Johnson's account of the September 19, 2016 incident changed. Whereas Johnson indicated in his September 30 interview with Agent Snyder that he did not know what Haddad intended by leaving the $20 in chips, Johnson claimed in his answer to the complaint that he "believed [Haddad] was leaving the chips for the dealers since [Haddad] was trying to tip us anyway." In the answer, Johnson also claimed he made two attempts before Haddad walked away-rather than one-to tell him that he had left money at the table. Johnson further claimed in the answer that "[w]hen [Haddad] was about half way out [of] the room, [Johnson] yelled to him once more 'that he left chips on the table.'"

         [¶8.] When Johnson submitted his answer to the complaint, he also submitted the written statement that Agent Snyder had requested on September 30, 2016. The factual assertions in this written statement, which is dated September 30, vary slightly from both Johnson's interview with Agent Snyder and Johnson's answer to the complaint. In the statement, Johnson claimed making three attempts before Haddad walked away to tell him that he had left money at the table. But the written statement makes no mention of yelling at Haddad after Haddad was halfway out of the room. And while Johnson indicated in his interview that he did not know what Haddad intended to happen to the $20 in chips, and he indicated in his answer that he affirmatively believed Haddad intended the chips to be a tip, Johnson instead indicated in the written statement that he "assumed" the money was intended to be a tip.

         [¶9.] The Commission responded to Johnson's answer on December 6, 2016. Larry Eliason, the Commission's Executive Secretary, informed Johnson that the matter could be resolved through an informal meeting rather than a formal hearing. Johnson and Secretary Eliason met informally on January 5, 2017. Secretary Eliason offered to settle the matter by suspending Johnson's gaming support license for 30 days. Johnson declined, choosing to proceed to a formal hearing. After leaving the meeting, however, Johnson returned to speak with Secretary Eliason. Johnson handed $20 to Secretary Eliason and said: "If you think I was a thief and dishonest there's his $20." Secretary Eliason refused to accept the money.

         [¶10.] The Commission held a formal hearing on March 22, 2017. Agent Snyder, Secretary Eliason, and Johnson each testified at the hearing. In addition to testimony, the Commission viewed a video-only recording of Johnson's alleged misconduct from September 19, 2016. The Commission also viewed video and audio recordings of Johnson's attempt to give $20 to Secretary Eliason after their January 5, 2017 meeting. The Commission concluded that Johnson violated two administrative regulations by placing a patron's chips in the tip box and by being untruthful in the subsequent investigation. Considering these infractions, Johnson's attempt to give $20 to Secretary Eliason, ...

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