HomeMy WebLinkAbout2004 02 09 Public Hearings 402
COMMISSION AGENDA
ITEM 402
Consent
Infolmational
Public Hearing X
Regular
February 9. 2004 _
Meeting
Air it)Y
Mgr. I' Att. / Dcpt.
REQUEST:
The City Attorney requests that the City Commission approve on First Reading Ordinance 2004-03
which shall regulate and prohibit slot machines and devices including casino-type slot machines.
PURPOSE:
The Purpose of Ordinance 2004-03 is to amend the City Code to regulate and prohibit slot machines
or devices that are un lawful under Chapter 849, Florida Statutes or that arc defined in this Ordinance.
The purpose of this Ordinance is also to adopt stricter regulations of casino-type slot machines than
as provided for in Chapter 849, Florida Statutes.
APPUCABLE LAW AN][) PUBLIC POLICY
1. Florida Municipal t[ome Rule Powers Act
2. Chapter 849. Florida Statutes
Page 1 of 2
CONSIDERATIONS:
1. The City of Sanford recenlly adopted an ordinance regulating adult arcades.
2. Several local cities adopted temporary moratoriums on adult arcades until regulatory
ordinances can be adopted.
3. The City Attorney has provided a white paper to the City Commission explaining the issues.
STAFF RECOMMENDATION:
The City Attorney recommmlds that ordinance No. 2004-03 be approved 011 First Reading and that
this Ordinance be advertised for Second and Final Reading.
ATTACHMENT:
1. Ordinance 2004-03
2. City Attorney white paper, dated November 26, 2003
COMMISSION ACTION:
On December 8, 2003, the City Commission directed that an ordinance be prepared to regulate
casino-like commercial activities.
G:\Dl1cs\Cily nrWinler S"l'jn&G,^gelld~\Agcnd31u:m_ 402....."d
Page 2 of 2
ORDINANCE NO. 2004-03
AN ORDINANCE OF THE CITY OF WINTER SPRINGS,
FLORIDA, AMENDING CHAPTER 10 OF THE CI'IT CODE,
ENTITLED "LICENSES AND BUSINESS REGULATIONS";
ESTABLISHING A NEW SECTION 10-115~ ENTlTl..ED "SLOT
MACHINES OR DEVICES"; PROVIDING FOR A DEFINITION
OF AND PROHIBITING TIlE COMMERCIAL USE OF SLOT
MACHINES OR OEVICES IN THE CITY OF WINTER SPRINGS;
PROVIDING FOR THE REPEAL OF PRIOR INCONSISTENT
ORDINANCES AND RESOLUTIONS, INCORPORATION INTO
THE CODE, SEVERABILITY, AND AN EFFECTIVE DATE.
WHEREAS, the City is granted the authority, under~2(b), Art. VIII of the State Con!;titution, to
exercise any power for munidpal purposes, except when expressly prohibited by law; and
WHEREAS Section 849.15, Florida Statutes, prohibits businesses from pennitting the operation
of or using or keeping slot machines or devices; and
WHEREAS, Section 849.16(1), Florida Statutes, defines slot machines as any machine or device
used in such a way that as a result of the insertion of money or other object, the machine is caused to be
operated, and if the user by reason of any element of chance or other outcome unpredictable by the player
may be entitled to a prize or replay; and
WHEREAS, Section 849.161, Florida StIltutes, provides a limited exemption for amusement
games or devices, which are operated within a bona-fide arcade or amusement center, with fifty (50) or
more machines or devices and which strictly through the application of skill a player may become entitled
to receive points or coupons which may be exchanged for merchandise, excluding cash and alcoholic
beverages; and
WHEREAS, bu.c;ine!;ses known as "Adult Arcades" or "Adult Arcade Amusement Centers" have
begun to operate within cities and counties across Florida providing casino styled gaming, which
significantly and adversely affect the public health, safety, and welfare of the citizens, residents and
tourists of those areas; and
WHEREAS, dcspitt~ the fact that these businesses use slot machines, these businesses are
attempting to use the state law exemption, commonly referred to as the "Chuck E' Cheese" exemption,
found in Section 849.161, Florida Statutes, in order to operate their businesses; and
WHEREAS, it has been detennined by the Florida courts that machines or devices that are
determined to have an inherc:nt element of chance are not exempt under Chapter 849, Florida Starutcs.
Deeb v. Stoutamirc, 531 So. 2d 873 (rIa. 19S l); In Re Forfeiture of Forty-Seven Video Games v. Hunter,
799 So. 2d 221 (Fla. 21\11 DCA, 2001) (Based upon th~ tt:stimony ofthe owner/operator ofan adult arcade
amusement centel: the court found that there was an inherent element of chance in the forfeited slot
City of Winter Springs
Ordinance: 2004-03
10[5
machines, as the player could win, without any application of skill, purely in proportion of the natural
odds, i.e., there was a I in 26 chance that the spinning reels would stop on the proper icon, should the
player rdndomly press the stop button.); and
WHERE.l\S, the Stale of Florida has prohibited all forms of gambling, including the operation of
any kind of !;lot machines, and gambling is punishable as a misdemeanor under the Florida Statutes; and
WHEREAS, the City Conunission finds that slot machines or device!; can lead to gambling
addictions, along with the se:condary consequences that such additions impose upon the community,
including increases in crime, debt, suicide and other negative effects on the health, safety and welfare of
the residents and visitors oftUle areas where these devices exist; and
WHEREAS, the City of Winter Springs has the duty and authority, through its police powerli, tn
ensure appropriate regulation, licensing and pennitting of businesses; and
WHEREAS, both the State of Florida and Seminole County have prohibited all forms of
gambling, including the operation ofany kind of slot machines, and gambling is a misdemeanOT under the .
statutes; and
WHEREAS, stricter local regulation ofthese gaming or slot machines is pelmissible provided
such regulations are not in cClnflict with the State laws; and
WHEREAS, (his ordinance is intended to pmvitl~ lihidcr regulations of gaming or slot machines
than those provided by Chapter 849, Florida Statutes and to prohibit all commercial casino type slot
machines as defined herein; clnd
WHEREAS, the City Commission of the City of Winter Springs, Florida, hereby finds this
ordinance to be necessary in the best interests of the public health, safety, and welfare of the citizens of
Winter Springs.
NOW THEREFORE, The City Commission of the City of Winter Springs, Florida hereby
ordains as rollow~:
Section 1. Recitals. The foregoing recitals are hereby Cully incoIporaled herein by reference
as legislative findillgs and tho intent and purpose of the City Commission of the City of Winter Springs.
Section 2. Code: Amendme.\t. That Chapter 10, entitled. "Licenses and Business
Regulations", of the Code of Ordinances, City of Winter Springs, Florida, are hereby amended as tollows:
(underlined type indicates additions and stri:k~out type indicates deletions, while asterisks (* * *) indicate
a deletion from the Ordinance of text existing in Chapter 10. It is intended that the text in Chapter 10
denoted by the asterisks and set forth in this Ordinance shan remain unchanged :from the language
eXl!;ting prior to adoption of this Ordinance).
CHAFTER 10- LICENSES AND DUSIN ESS REGULATIONS
City of Winter Spril1gs
Ordinance: 2004.0~
2of5
.. * 11
ARTICLF. IV. AMUSRMENTS
* * *
Sec. 10- tIS Slot Machines and Devices
!!l Purnose and Intent. The pUlJlose and intent ofthis section is to regulate and prohibit. within the
City of Winter Springs. Florida, slot machines or devices and casino-tvne !;lot machines as
defined in this section or IlS nrohibited by Chapter 849. Florida Statutes.
M Definitions. The followinf! words. tenns. and phrases. when used in this section. shall have the
meanings ascribed to them in this section, except where the context clearly indicates a different
meaning:
ill Slot machine or device shall mean an amusement machine. device, game or instnlment
operated bv means oithe insertion of a coin. bill. currency, credit card, debit card. ticket.
token or slug. for use as a game. contest of skill or amusement of any description. which
~J~vic..Q,.mi!.kl!l'l!lg~~m~.9rj~~tr.u.m.~pJj~_siT1}jl~!Jo, or in the nature of a casino-tyee slot
machine
a.l Casino-tvDe slot machine shall mean a machine. device. game or instrument which is
prohibited by Section 849.16. Florida Statutes. and which. by means of skill or chance. or
both, has as its obiect the lining up of two or more colors, lights, 01." sDinnine: obiects. or
any combination thereof.
W Slot machIne or de\lUce prohibited.
ill It shall be unlawful to have. own. operate. use or allow another to have. own operate or
use a slot machine or device in the City of Winter Springs, and slot machines or devices
are hereby Dlohibited in the City ofWintcr Springs.
ill No occupational licenses shall be issued by the city for any business. enterprise. or
organization that proposes to operate a slot machine or device in the City and no
occuPational llicensc shall be issued by the City for a slot machine or device.
00 Exemption. This section is not intended to and specifically does not re[!ulat~
ill merchandise vending machines:
ill coin-operated mechanical or electrical musical instruments or devicef~ .
ill coin.-operated amusement devices that are not in the nature of. or similar to. casino- tvoe
City ofWintt..'T Springs
Ordinance: 2004-03
30f5
slot machinesi...QI
~ coin-ooerated amusement devices that may be in the nature of or similar tOJ;~ino-tVDe
slot machines or devices. which are not used for commercial or betting purposes but kent
only for outpQses of display. '
Section 3 Repeal of Prior Tnconsident Ordinances Ilnd Resolutions. All prior
inconsistent ordinances and n:solutions adopted by the City Commission. or parts of prior ordinances and
resolutions in conflict herewith. are hereby repealed to the extent of the conflict.
Section 4. Incorporation Into Code. This ordinance shall be incorporated into the Winter
Springs City Code and any Sl~ction or paragraph number or letter and any heading may be changed or
modified as necessary to effectuate the foregoing.
Section 5. Sever'ability. If any section, subseclion, sentence, clause, phrase, word or
provision of this ordinance is for any reason held invalid ,or unconstitutional by any court of competent
jurisdiction, whether for substantive, procedural, or any other reason, such portion shall be doemcd a
separate, distinct and indepe:ndent provision, and such holding shall not affect the validity of the
remaining portions of this ordinance.
Section 6. EffecUve Date. This Ordinance shall become effective inuncdiatcly upon
adoption by the City Conunission of the City of Winter Springs, Florida, and as provided by City Charter.
ADOPTED by the City Commission of the City of Winter Springs, Florida, this _ day of
-' 2004.
JOHN F. BUSH
Mayor
ATTEST:
ANDREA LORENZO-LUACES
City Clerk
City of Winter Springs
Ordinance: 2004-03
40f5
Appruved as to legal form and sufficiency for
the City of Winter Springs only
Anthony A. Garganese, Ciity Attorney
Firsl Reading:
Second Reading:
Effective Date:
City of Winter Springs
Ordinance No. 2004-03
50f5
BR()\X7N, SALZMAN, WEISS & GARGANESF, P.A.
/lttOrtt~YJ at Law
Usher L. BrCl'wlll1'
Suzanne O'Agreslac
Anthony A. Garg<lnesec
Gary S. Salzman'
John H. Ward"
Jeffrey S. Weiss
(HEice$ in Ocbndo, Ki.s~immc:c:.
Cocoa & Vir.r~
Debra S. Babb-Nulcher
JeUrMY P. Bual(o
John U. Biedenharn, Jr.
Josoph e, Blitch
OouQlas Lambert
Katherine Latorre
MIchelle A. Reddin
'Board CerUfted Civil Trial Lawyer
'Board Certinsd BlJslness Litigation Lawyer
oBoard Certilied City, County & Local Government Law
. Erin J. O'Leary
Of COunsel
November 26, 2003
The Honorable Mayor J,:>hn F. Bush and
Members of the City Commission
1126 East State Road 434
Winter Springs, Florida 32708-6912
Re: Adult Arcade Amusement Centers - Slot Machines
City of Winter Springs I General File No. 1193
Dear Mayor Bush and Members of the City Commission:
This correspond(:nce follows a recent fluny of news reports regarding casino style gaming
rooms which are opening around the state. It is the intent of this letter to bring the City up to date
on the issues surrounding these establishments and to provide several possible alternatives for
dealing with such an application.
Typical Scenario
These gaming rooms or arcades often look like tradilional casinos inside, except they are in
neighborhood strip ccntE~rs. The owner/operators typically lower the lights, the staIr is dressed in
traditional casino attire, the owners/operators often serve complimentarywincanu [ouu, and usually
require all patrons l<) be: over the age of twenty-one (21) years. The arcades typically have slot
machine style games. Some are the traditional reel stylect machines, while others are video images
that appear to spin. The insertion oEmone]' into the machine provides credits for play. Typically
each game costs One Dollar ($1.00), but players can place as much as One-Hundred Dollars
($100.00) into the machine and receive one-hundred (100) credits. The machine is then activated
by placing a bet or using a credit. Each ofthe three reels is then stopped individually by pushing a
stop button, sometimes labeled by the word "skill". Should a player end up with the necessary
images or icons in the proper location, the phi.yer wins and i~ awarded a coupon. The coupons may
then be added together and traded for gift cards, restaurant coupons, disoounls for services. as well
as other merchandi~c.
225 East RobinsOI'I Street Suite 660 . P.O. BOle 2873 . Orlando. Florida 32802.2873
Orlando (407)425-9500 Fax (407) 425-9596' Kissimmee (321) 402.0144' Cocoa & Viera (866) 425-9566
Websile: www.orlandolaw.net . Email: nrm@orlandolaw.neL
The Honorable Mayor John F. Bush and
Members of the City Commission
November 26, 2003
. Page 2
Issue
The quest.ion posed for state and local officials is whether these establishmellls violate
Chapter 849,Florida Statutes, by lhe use or operation ora slot machine or if these establishments are
exempt from the regulation as the slot machines are games of skill, as opposed to ones of chance.
Short Answer
We believe the e;xcmption provided in Section 849.161, Florida Statutes, for aml1S~mel11
games or machines located within an arcade amusement center is limited. Notwithstanding the
foregoing, it appears possible that a easino styled arcade amusement center may exist lawfully l1nder
. this exemption.
Leeal Analvsis
Pursuant to Section 849.15(1), Florida Statutes, it is unlawful to possess or permillhe
operation of any slot maGhine or device. Secl;on 84~.16, Florida Statutes defines those machines
which qualify as a slot machine ordcvice as:
[O)ne that is adapted for use in such a way tbat, as a result of lhe
insertion of any piece of money, coin, or other ohjecf, such machine
or device is caused to operate or may be operated and if the user, by
reason of any element of chance or of any other outcome or i;uch
operation unpredictable by him or her, may:
(a) Rcceive or become entitled to receive any piece of money,
Crt~djt. allowance, or thing of value, or any check, 51 Ltg, tokeo,
or memorandum, whether of value or otherwise, which may
be exchanged ror any money, credit, allowance, or thing of
value or which may be given in trade; or
(b) Secure additional chances 01' righlS to use such machine,
appamtus, or device, even though it may, in addition to any
element of chance or unpredictable outcome of such
op'~ralion, also sell, deliver, or present some merchandise,
indication of weight, entertainment, or other thing of value.
Thus, if the receipt of a prize is dependent on any elCIIll.:nl of chance, the machine would fall within
the above definition of a slot machine proscribed by Section 849.15, Florida Statutes.
The Honorable Mayor J.Jhn F. Bush and
Members of the City Commission
November 26,2003
Page 3
There is an exemption, however, for amusement games or machines, operated within a
bonafide an:aue or amusement center, which in accordance with Section 849.161, Florida Statutes
are:
(C]oin operaled and which by application of skill may entitle the
person pluying or operating the game or machine to receive points or
coupons which may be exchanged for merchandise only, excluding
eash and alcoholic beverages, provided tne cost value of the
merchandise or prize awarded in exchange for such points or coupons
docs not e:xcecd 75 cents on any game played.
"Arcade amusement ccntl:;r" is defined in Section 849.161, Florida Statutes as "...a place ofb\lsiness
having at least 50 coin-operated amusement games ormachincs 011 premises which are operated for
the entertainment of the gt..'11eral public aud tourisLs as a bona fide amuscment facility."
Therefore, Section 849.161 J Florida Statutes, creates an exemption for a machinc or device
that would otherwise be prohibited by Chapter 849, Florida SLatutes, if the machine is locaLed in an
arcade amusemcntcenlerand if, by application of skill, the player may receive a pril,e worth no mMe
than seventy-five cents ($0.75). This exemption has been referred to as the "Chuck E Cheese
EX4:!mption".
Thc owner's and operators of the casino style arcades claim this exemption applies to their
establisrunents. They cl::rim the fnct that a player must push a but1on. sometimes labeled with the
woru "skill", to stop the !.l.',inning reels or images is a function of skill and not chance. It is claimed
that if a player plays enough, concentrates enough, and ha.~ fast enough reflexes, thc player will be
able to slop the reels, through the application of skill, and win a coupon redeemable for priz~s.
The Florida Attorney General was asked in 1995 whether the pushing of a blltton marked
"skill" equals the application of skill required by Section 849.161, Florida Statutes. The Attorney
General found that while the outcome ofthc game does not have to be wholly dependent upon skill,
skill must be a factor in the outcome. But, the mere pushing of a button marked "skill" would not,
in and of itself, appear to constitute the application of skill [or purposes of 'lualifying for the
exemption under Section 849.161, Florida Statules. The Attorney General went on to note that the
information provided indicated that the objects painted on the reels were impossihle to identify due
to the ~peecl at which the reels turned, and that when the button was depressed the rcds did not
immediately slop spinning, tlu~refore under those facts, it appeared that the knowledge, attention, or
practice of the player would not affect the element of chance that dominates the result ofthe play,
ann therefore the machine would not qualify for the exemption in Section 849.1 C)], Florida Statutes.
The Honord.bleMayor John F. Bush and
M~mbers of the City Commission
November 26, 2003
Page 4
The Florida COllrts have also looked at this issue. 111 Deeb v. SlOutamire, 53 So.2d 873, (Fla.
1951) the florida Suprema Court considered the meaning of the phrase "any element of chance or
of other outcome of such operation unpredictahle by him", and detennined the element of chance
or unpredict~bilily is not supplied by the player, but must be inherent in the machine. In othcr
words, when considering whether a machine or device is exempt from the requirements of Sections
849.15 and 849.16, Florida Statutes, it must be determined that there is no chance or unpredictabiJity
in the machine.
Later, in State et (II. v. Rroward Vending. Inc., 696 So.2d 851 (Fl.t 4'h DCA 1997) the Fourth
District Court of appeal ct:ppJied this standard when considering whether slot machines were properly
seized under the Florida Contraband Act. The Court found Lhat if a player does nOl manipulate the
levers to improve the score, the machine was preset for the player to win fitly-five (55) percent of
the time. therefore while skill will improve the winning percentage, tlll': game has an inherent
element of chance. As such, it is noL exempt rrom Chapter 849, Florida Statutes.
Most recently, In reforfeilure of Porty-Savan Video Redemption Games v. Don Hunter, 799
So.2d 22 t (Fla. 2nd DCA 2001), the Second District Court of Appeals found machines seized to be
slot machines as defined by Section 849.16) Florida Stat.utes, and not subject Lo the exemption of
Section 849.161, Florida Statutes. At tl;al the owner of the mtlchines testified that there was a
chance a player could win, without skill,jus( in proportion to the natural odd'). He testified that each
red contained twenty~six (26) icons and that without any use of skill, there was a t in 26 chance that
the recl would stop on the: proper icon.
It is important LO note thaL Chapter 849, Florida Statutes, contains no express preemption
from further regulation by local governments.
CooclusiolJ.
While the exemption provided in Section 849.161, Florida Statutes, has been found to be
limited in ~cope, there remain fact based determinations regarding whether a machine or device is
exempt as an amusement game of skill.
1) If the machine or <.1~vice has an element of chance inherent to it, the machine or
device is not exempt from the prohibitions of Section 849.15, Florida Statutes, and
cannot be operated or possessed.
2) 1fthe machine or device does not have an inherent element of chance, but is instead
a skill based machine, the same is exempt and may be permitted, provided the arcade
amUsement: center has at leasL fifty (50) machines, is open to the general public and
tourists, and any award has a value of less than $0.75 per game.
The Honorable Mayor John F. Bush and
Members oC the City Commission
November 26, 2003
Page 5
Recommendations
1. Tile City could do nothing and handle any application on acase by case basis. Any applicant
which demonstrates to the satisfaction of sLaffthat the machines are skill oriented, that there
will be more than fifty (50) machines within the amusement center, that the arcade
amusement center will be open to the general pubic (which could or should include children),
and that will only provide coupons with a value oflcss than $0.75, may be approved. .
2. The City could amend the City Code to provide that any such use would be permitted by
special exception only in an appropriate zoning district. This would provide.a quasi-judicial
fomm whereby lhc applicant would have to demonstrate compliance with the Florida
Statutes and City Code. This would allow the presentation of witnesses regarJing fact
detennination of skill versus chance. Where compliance with the Florida Statutes is
demonstrated, the City could impose additional reasonahle conditions to protect the
surrounding property owners and ensure the lawful existence of the business.
3. Thc City eould amend the City Codc to provide additional regulations relating to gaming and
arcades to effectively close the "loophole" claimed to exist in Chapter 849, Florida Statutes.
I look forward 10 discussing this issue at the Oecemher 8, 2003 City Commission meeting,
Anthony A. Garganese
City Attorney
AAG:jf