Florida is Now the Center of Attention

“Here’s the Ticket”

There are currently 21 states that have enacted prize value per play limits (ranging in each of the states from 75 cents to $35) and the list keeps growing with 3 more states considering prize limiting legislation.  The target in almost every case has been sweepstakes and Internet café gaming places, but traditional redemption and merchandise dispensing games have gotten entangled in the wide sweeping net of these new laws. In April Florida passed a law banning the gaming machines but redefined a slot machine in a very broad manner. In the past three months more than 1000 internet cafes and 200+ senior arcades have been closed across the state.

Breaking News — Everyone in the amusement game industry should be extremely concerned about the damage that the new Florida Gaming Law (Statute 551.102) with its ban on sweepstakes games, senior arcades (video gaming machines) and internet café gaming is causing. The intent of the law was to limit the value of a prize to 75 cents per game play and insure that games that issue prizes, tickets, receipts, or gift cards would ‘be held to a skill predominance standard.’ The new law also redefined a slot machine (gambling machine) in such a broad sense that could include several types of traditional redemption and merchandising dispensing games.   Note that the lawful games are still only permitted in arcades with 50 or more games or truck stops’ and can only be operated by coins, according to previously existing Florida state law. A strict interpretation could mean that debit card systems may be illegal.

What happened next was logical–two of the senior arcade business through their attorney filed for a preliminary injunction in federal court to stop the enforcement of the new law and have the two facilities re-opened. The injunction was denied by a federal judge and law enforcement continues to force the closure of the many senior arcades and sweepstakes parlors throughout Florida.

What happened next is disturbing–The same attorney, now representing the Florida Arcade & Bingo Association and at least two Florida senior arcade businesses has filed a law suit against two Palace Entertainment owned Boomer’s FEC’s alleging that they are operating games that ‘were banned by the state’s recently enacted anti-sweepstakes law,’ according to the West Palm Beach Post.

The quotes that were reported by RePlay should be taken very seriously by the amusement industry:

“Listen, if senior arcades are subject to the new law, so is everyone else.”…”There’s no carve-out in the law for Boomers or Dave & Buster’s or Chuck E. Cheese or even Disney.” – Attorney Michael Wolf as quoted by West Palm Beach Post.

“Selective enforcement is illegal.”…”So grandma can’t win anything worth more than 75 cents, but her grandson can win an Xbox?” – Gale Fontaine, President, Florida Arcade & Bingo Association.

And now comes the ‘reason’ for the law suits — According to the Post, “The lawsuit was filed in hopes of forcing entertainment firms like Palace Entertainment, which owns Boomers, as well as other large FEC operators, to join the fight against the law.”…”We think when they come to the realization that the law does apply to them, they’ll be screaming bloody murder,” Wolf told the paper. He also stated that he will be filing more law suits against Florida FEC’s.

What this could mean:

This is the first time that TRR is aware of that the sweepstakes and senior arcade owners have filed lawsuits against owners/operators of traditional amusement redemption and merchandise dispensing games. The coin-op trade press refers to the sweepstakes and senior arcade games as ‘gray area games’ (sometimes as video slot machines) because in some states a model(s) were alleged to be legal while in other states that same game would be considered an illegal gaming machine. The traditional amusement game industry has taken a ‘hands off’ attitude towards the video slot games, as the manufacturers of these games continue to design their games to allegedly comply with the laws of individual states and challenge the laws where they felt they could win acceptance.  TRR research shows at least one state is considering taxing a category of video slot games and explicitly making them legal. There are also legalized video lottery games in several states where game operators participate with the state and the locations where the games are placed. So it is not always clear to the public that traditional redemption and merchandise dispensing skill based games are entirely separate from video slot machines.

Look where this ‘hands off’ policy has brought us. Isn’t it logical that if video slot gaming is shut down in half the states, that these games will soon start showing up in other states? Doesn’t it follow that these new states will also impose prize limits as the ‘easy fix’ to ridding their state of these video slot games?

It is pretty late in the game but now that a line has been drawn in the sand between the video slot games and the traditional redemption and merchandise dispensing games, it is time for our industry to take a stand and fight for our ‘skill’ based games and make sure that our amusement industry is distinctly separated from the games of ‘chance’ games.

For more than two hundred years our state laws have used the term ‘predominantly’ to distinguish between games of skill and games of chance. Predominantly has always meant more than 50% but judges and jurists each have their own interpretation of the word. Some might feel that 90% skill and 10% chance is the definition of a skill game. In any case, it is much easier today to demonstrate if the outcome of a game is based on skill or chance by showing that a very skilled player can consistently win over an unskilled player. And we know who these very skilled players are because they have the most points or prizes won among our customers. We know that the huge majority of redemption and merchandise dispensing machines are skill based. Those few that may contain a small but noticeable element of chance can be modified to have a very low element of chance.

To fully grasp the above paragraph, we must understand that there is really no game to date that is 100% skill. Even an unskilled player can throw a basketball through the hoop once in a thousand attempts even if he/she is blindfolded. That one time event can be considered ‘chance’ or by another term, ‘luck.’

Yes, I believe the family entertainment industry in Florida will be screaming bloody murder when each FEC learns about the new law and about the lawsuits filed against the Boomers FEC’s. What I hope will not happen is that the skill game industry will join forces with the video slot industry to lobby together to get the law changed, as the video slot industry hopes will be the case.  What I see happening once the FEC industry, Disney, and even the bowling industry realize that the new law was put in place as a simple means to shut down the non-legalized video slot industry in Florida, is that all of the skill based industry will come together and fight for ‘itself’ and its survival.

More Breaking News

On July 4th the Miami Herald reported that the same plaintiffs filed an identical lawsuit against Dave & Buster’s stating that the family entertainment center represents illegal gambling operations. The suit also contends that Dave & Buster’s and Boomers are ‘gambling houses’ and ‘public nuisances’ and challenges the constitutionality of the new law.

Attorney Michael Wolf told the Herald:  The law is a lawyer’s haven, a lawyer’s orgasm. You’re going to see a lot more litigation before this is finished.”

Miami Herald: “Wolf’s strategy, he said, is to force the well-heeled chains, which so far haven’t been targeted by police and prosecutors seeking to enforce the law, to join forces with the senior arcades, which have been closed by the hundreds. He also thinks closing some of the broadly popular upscale video parlors will gin up public resistance to the law.”…“Abraham Lincoln said it best — the best way to repeal a bad law is to strictly enforce it,” he said.

What this could mean:

As the lawsuits continue against the traditional family entertainment centers and other sectors such as bowling centers, waterparks, mall game rooms, amusement parks, hotels, etc., it may be tempting to join forces with the Florida Arcade & Bingo Association to get the law repealed, but this may not be in the long term best interests of our skill based amusement industry. There is little doubt that the Florida lawmakers will amend the current law as the vast majority in the state of Florida desire to ban games of chance that include sweepstakes, internet gaming cafes, and video slot/poker machines. What we can work towards is that our industry has a seat at the table to make sure that predominantly skill based redemption and merchandise dispensing games are exempted, there is a reasonable minimum prize limit per play that increases over time, the 50 game minimum goes away, and that the games can be operated by coins, currency, debit card, credit card, or any other form of legal payment.

And More Breaking News

A Philadelphia newspaper reports, ARCADE GAMES MAY AMOUNT TO GAMBLING – “A woman in California has sued [a] Denny’s restaurant which has an arcade section with games including the Claw. She says that by offering the Claw game, Denny’s is violating the gambling laws. The claim is that a game like the Claw isn’t a game of skill, it’s primarily a game of chance.”

“Unlike many other arcade games (e.g. Pac-Man, Skeeball, pinball, etc.) which require hand-eye coordination, concentration, and physical skill, the outcome of claw machines is based entirely or at least predominantly on chance. In other words, the player has no ability to control the outcome so under California law, where this lawsuit was filed – and under most other state laws – that meets the definition of gambling which is illegal. And it’s not just the Claw that could potentially be affected – games that require the player to insert money or tokens into the machine and offer the player a chance to win stuffed dolls, toys, or tickets to redeem for other prizes by luck and not by skill would fall into the same category.”

What this could mean:

It is obvious that the traditional amusement industry is going to be attacked in multiple states and in the press by state and even nationally as more lawsuits are filed.  It took decades for amusement games to rebound from the period following prohibition when even pinball free play wins were outlawed in several states. Our industry then worked hard to educate the public that amusement games are completely separate from gambling machines. All that hard work may go down the drain. A pretty savvy politician, who knows the amusement industry, gives this advice:  “This isn’t the first time your industry has been under attack and it won’t be the last.  As long as you are commingled with the gaming and sweepstakes industry in the public eye, you will have these issues. You need to promote your Industry again to illustrate a clear delineation from these other industries.  It will have to start by committing to skill based games.” This advice should be taken seriously. The FEC sector came alive when that sector evolved from the ‘arcade’ sector. The word arcade (as in arcade games) still has a negative connotation as it reminds the public of the time when they were dark places where teens hung out. Now the word is associated with senior arcade and the Florida Arcade & Bingo Association. The word arcade should no longer apply to our industry. Perhaps that is a starting point.

Almost all of the merchandise dispensing game manufacturers are on board and realize that they must submit their games for testing at an approved testing laboratory to have documentation that they are predominantly skill based games and not games of chance.  This process is costly but it is a necessary step. TRR has seen one of the test results from a well-known amusement game manufacturer and it is quite impressive. TRR will be following all major developments with great interest.