HomeMy WebLinkAbout11-26-2003 Adult Arcade Amusement Center - Slot MachinesBROWN, SALZMAN, WEISS & GARGANESE, P.A.
Attorneys at Law
Usher L. Brown'
Offices in Orlando, Kissimmee, Debra S. Babb-Nutcher
Suzanne D'Agresta°
Cocoa & Viera Jeffrey P. Buak°
Anthony A. Garganese°
John U. Biedenharn, Jr.
Gary S. Salzman*
Joseph E. Blitch
John H. Ward'
Douglas Lambert
Jeffrey S. Weiss
Katherine Latorre
—
Michelle A. Reddin
'Board Certified Civil Trial Lawyer
*Board Certified Business Litigation Lawyer
°Board Certified City, County & Local Government Law
November 26, 2003
The Honorable Mayor John 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 / General File No. 1193
Dear Mayor Bush and Members of the City Commission:
Erin J. O'Leary
Of Counsel
This correspondence follows a recent flurry 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 traditional casinos inside, except they are in
neighborhood strip centers. The owner/operators typically lower the lights, the staff is dressed in
traditional casino attire, the owners/operators often serve complimentary wine and food, and usually
require all patrons to be over the age of twenty-one (21) years. The arcades typically have slot
machine style games. Some are the traditional reel styled machines, while others are video images
that appear to spin. The insertion of money 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 of the 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 player wins and is awarded a coupon. The coupons may
then be added together and traded for gift cards, restaurant coupons, discounts for services, as well
as other merchandise.
225 East Robinson Street, Suite 660 • P.O. Box 2873 •Orlando, Florida 32802-2873
Orlando (407) 425-9566 Fax (407) 425-9596 • Kissimmee (321) 402-0144 • Cocoa & Viera (866) 425-9566
Website: www.oriandolaw.net • Email: firm@orlandolaw.net
The Honorable Mayor John F. Bush and
Members of the City Commission
November 26, 2003
Page 2
Issue
The question posed for state and local officials is whether these establishments violate
Chapter 849,Florida Statutes, by the use or operation of a 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 exemption provided in Section 849.161, Florida Statutes, for amusement
games or machines located within an arcade amusement center is limited. Notwithstanding the
foregoing, it appears possible that a casino styled arcade amusement center may exist lawfully under
this exemption.
Legal Analysis
Pursuant to Section 849.15(1), Florida Statutes, it is unlawful to possess or permit the
operation of any slot machine or device. Section 849.16, Florida Statutes defines those machines
which qualify as a slot machine or device as:
[O]ne that is adapted for use in such a way that, as a result of the
insertion of any piece of money, coin, or other object, 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 of such
operation unpredictable by him or her, may:
(a) Receive or become entitled to receive any piece of money,
credit, allowance, or thing of value, or any check, slug, token,
or memorandum, whether of value or otherwise, which may
be exchanged for any money, credit, allowance, or thing of
value or which may be given in trade; or
(b) Secure additional chances or rights to use such machine,
apparatus, or device, even though it may, in addition to any
element of chance or unpredictable outcome of such
operation, 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 element of chance, the machine would fall within
the above definition of a slot machine proscribed by Section 849.15, Florida Statutes.
The Honorable Mayor John 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 arcade or amusement center, which in accordance with Section 849.161, Florida Statutes
are:
[C]oin operated and which by application of skill may entitle the
person playing or operating the game or machine to receive points or
coupons which may be exchanged for merchandise only, excluding
cash and alcoholic beverages, provided the cost value of the
merchandise or prize awarded in exchange for such points or coupons
does not exceed 75 cents on any game played.
"Arcade amusement center" is defined in Section 849.161, Florida Statutes as "...a place of business
having at least 50 coin -operated amusement games or machines on premises which are operated for
the entertainment of the general public and tourists as a bona fide amusement facility."
Therefore, Section 849.161, Florida Statutes, creates an exemption for a machine or device
that would otherwise be prohibited by Chapter 849, Florida Statutes, if the machine is located in an
arcade amusement center and if, by application of skill, the player may receive a prize worth no more
than seventy-five cents ($0.75). This exemption has been referred to as the "Chuck E Cheese
Exemption".
The owner's and operators of the casino style arcades claim this exemption applies to their
establishments. They claim the fact that a player must push a button, sometimes labeled with the
word "skill", to stop the spinning reels or images is a function of skill and not chance. It is claimed
that if a player plays enough, concentrates enough, and has fast enough reflexes, the player will be
able to stop the reels, through the application of skill, and win a coupon redeemable for prizes.
The Florida Attorney General was asked in 1995 whether the pushing of a button marked
"skill" equals the application of skill required by Section 849.161, Florida Statutes. The Attorney
General found that while the outcome of the 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 for purposes of qualifying for the
exemption under Section 849.161, Florida Statutes. The Attorney General went onto note that the
information provided indicated that the objects painted on the reels were impossible to identify due
to the speed at which the reels turned, and that when the button was depressed the reels did not
immediately stop spinning, therefore 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 of the play,
and therefore the machine would not qualify for the exemption in Section 849.161, Florida Statutes.
The Honorable Mayor John F. Bush and
Members of the City Commission
November 26, 2003
Page 4
The Florida courts have also looked at this issue. In Deeb v. Stoutamire, 53 So.2d 873, (Fla.
1951) the Florida Supreme Court considered the meaning of the phrase "any element of chance or
of other outcome of such operation unpredictable by him", and determined the element of chance
or unpredictability is not supplied by the player, but must be inherent in the machine. In other
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 unpredictability
in the machine.
Later, in State et al. v. Broward Vending, Inc., 696 So.2d 851 (Fla. 4" DCA 1997) the Fourth
District Court of appeal applied this standard when considering whether slot machines were properly
seized under the Florida Contraband Act. The Court found that if a player does not manipulate the
levers to improve the score, the machine was preset for the player to win fifty-five (55) percent of
the time, therefore while skill will improve the winning percentage, the game has an inherent
element of chance. As such, it is not exempt from Chapter 849, Florida Statutes.
Most recently, In re forfeiture of Forty -Seven Video Redemption Games v. Don Hunter, 799
So.2d 221 (Fla. 2"d DCA 2001), the Second District Court of Appeals found machines seized to be
slot machines as defined by Section 849.16, Florida Statutes, and not subject to the exemption of
Section 849.161, Florida Statutes. At trial the owner of the machines testified that there was a
chance a player could win, without skill, just in proportion to the natural odds. He testified that each
reel contained twenty-six (26) icons and that without any use of skill, there was a 1 in 26 chance that
the reel would stop on the proper icon.
It is important to note that Chapter 849, Florida Statutes, contains no express preemption
from further regulation by local governments.
Conclusion
While the exemption provided in Section 849.161, Florida Statutes, has been found to be
limited in scope, there remain fact based determinations regarding whether a machine or device is
exempt as an amusement game of skill.
1) If the machine or device 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) If the 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 least 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 of the City Commission
November 26, 2003
Page 5
Recommendations
1. The City could do nothing and handle any application on a case by case basis. Any applicant
which demonstrates to the satisfaction of staff that 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 of less 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
forum whereby the applicant would have to demonstrate compliance with the Florida
Statutes and City Code. This would allow the presentation of witnesses regarding fact
determination of skill versus chance. Where compliance with the Florida Statutes is
demonstrated, the City could impose additional reasonable conditions to protect the
surrounding property owners and ensure the lawful existence of the business.
3. The City could amend the City Code 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 to discussing this issue at the December 8, 2003 City Commission meeting.
V t y yours,
Anthony A. Garganese
City Attorney
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