Blaine is one of the eight gym leaders at the Indigo League. He did have a gym, but when hot springs were discovered on the island, the island soon had a lot of tourists. Blaine wears a wig, and built his gym at a different location on the island. He also runs a hotel called The Riddle Inn.
When Ash, Misty, and Brock go to Cinnabar Island, they find out about Blaine's gym. He gives them his business card for The Riddle Inn, and the card was another riddle. The first riddle was what's hot and cool at the same time? Misty got the first riddle right by saying, "The hot springs are hot, and tourists thinks its cool." The riddle on the business card revealed the location of The Riddle Inn, and The Riddle Inn had a clock outside.
He later tells Ash that Blaine built another gym. He says, "It's where a firefighter can never win." Do you know where it is? When they find the gym, Ash battled Blaine. He tells Ash that he made a wise decision on quitting when his Magmar injured Pikachu.
Team Rocket does ruin the gym by freezing it to capture Magmar. Ash's pokemon and Magmar blocked the lava flow, and Blaine gives Ash a second chance to earn the volcano badge. The battle was on top of the volcano. Ash's charizard defeated Blaine's Magmar.