Automatic Music & Vending Corp. v. Liquor Control CommissionAutomatic Music & Vending Corp. v. Liquor Control Commission
The issue in this case is whether a draw poker machine is an illegal gaming device under
FACTS
The facts are accurately and concisely summarized in the opinion of the Court of Appeals,
Early in 1982, officers of the Michigan Liquor Control Commission became aware that the Sanford Eagles Club had a "draw рoker” video machine in the club. This machine has five windows. When twenty-five cents is inserted in the machine, a playing card appears in each window. Below each window is a button. If a player is dissatisfied with the card first appearing in a window, he may press the button under that card and the first card will disappear and be replaced by another card.
The machine has two counters on the inside, one which keeps track of the number of quarters placed into the machine and the other which keeps track of the number of free replays erased off the machine without playing them. The device also has a key mechanism which can erase free reрlays without the replays being played.
Once a satisfactory hand is established, the game is played as five-card draw poker. When certain hands are obtained, credits are given which entitle the player to free plays.
On March 30, 1982, the local inspector for the mlcc, Robert Basket, and his supervisor, Donald French, went to the Sanford Eagles Club and played the machine. Supervisor French won 54 free games on that date.
The officers аsked the bartender, Lydia Oswald, if the games could be traded for cash. She informed them that the Eagles did not pay off in cash but only in free replays.
On May 25, 1982, the same Liquor Control Commission officers returned to the club and played the machine. After this the officers confiscated the machine as a gambling device and issued a complaint with the Michigan Liquor Control Commission against the Sanford Eagles Club. A hearing was held before Hearing Commissioner Andrew Metcalf, Jr., who rendered an opinion on December 1, 1982, finding the machine to be a game "partly of skill and partly of chance” and an unlawful gambling device underMCL 750.303(1) and 1980 AACS R 436.1013(2). Commissioner Met-calf also ruled that Automatic Music and Vending Corporаtion could not intervene in the hearing as it was not an involved party. The commissioner ordered a fine of $250 and costs. He did not confiscate the machine.
Commissioner Metcalfs decision was upheld by the commission on аppeal in January, 1983.
Automatic Music then applied to the circuit court for Ingham County for an order of superintending control to review the actions of the commission. Judge Robert Holmes Bell, in a terse order, reversеd the commission and found that free replays do not constitute a reward and are not gaming as defined byMCL 750.303 ; MSA 28.535.
The Court of Appeals affirmed the order of the circuit court and held: (1) that the draw poker machine was not a gаming device, and (2) that
The plaintiff, the Fraternal Order of Eagles, holds a club license issued by the Michigan Liquor Control Commission. As the holder of a club license, plaintiff is subjeсt to regulation 1980 AACS, R 436.1013 which provides in part:
A licensee shall not allow any gambling devices on the licensed premises which are prohibited by the statutes of this state.
(1) A person who for hire, gain, or reward, keeps or maintains a gaming room, gaming table, game of skill or chance, or game partly of skill and partly of chance, used for gaming, or who permits a gaming room, or gaming table, оr game to be kept, maintained, or played on premises occupied or controlled by the person, is guilty of a misdemeanor, punishable by imprisonment for not more than 2 years, or a fine of not more than $1,000.00. . . .
(2) This section shall not apply to a mechanical amusement device which may through the application of an element of skill reward the player with the right to replay the mechanical device at no additional cost if the mechanical amusement device is not allowed to accumulate more than 15 replays at 1 time; the device is designed so that accumulated free replays may only be discharged by reactivating the device for 1 additional play for each accumulated free replay; and the device makes no permanent record directly or indirectly of the free replays awarded.
A. ANALYSIS OFMCL 750.303(1) ; MSA 28.535(1)
Since
With respect to the draw poker machine which is the subject of this dispute, both parties agree that consideration, in the form of the money needed to play the game, and chance, in the random distribution of the cards, are present. The more controversial issue is whether or not a free game constitutes a reward or prize. This issue has previously been considered and decided by this Court.
In
Oatman v Port Huron Chief of Police,
"[W]here there is an element of chance in the oрeration of the slot machine — where the one who plays the machine stands to win or lose money, trade checks, or prizes, by a chance, — the machine is a gambling device . . . .” [Emphasis added.]_
B. RELEVANCE OF THE STATUTORY EXCEPTION
In 1975, the Legislature amended
shall not apply to a mechanical amusement device which may through the application of an element оf skill reward the player with the right to replay the mechanical device at no additional cost if the mechanical amusement device is not allowed to accumulate more than 15 replays at 1 time; the device is designed so that accumulated free replays may only be discharged by reactivating the device for 1 additional play for each accumulated free replay; and the device makes no permanent record directly or indirectly of the free replays awarded.
The draw poker game at issue does not qualify for this exemption because: (1) it allows the accumulation of more than fifteen replays, (2) there is a button оn the machine which can discharge all the free replays, and (3) there is a permanent
II. CONSTITUTIONALITY OP THE STATUTORY EXCEPTION
The Court of Appeals held that
A. EQUAL PROTECTION CHALLENGE
The Court of Appeals correctly stated that the appropriate test for an equal protection claim under both the Michigan and the United States Constitutions is whether the legislation bears a reasonable relationship to a legitimate goal of the Legislature. As we stated in
Johnson v Harnischfeger Corp,
It appears that the Court of Appeals in this case found that the distinction made in the statute between machines which allow fifteen or fewer free replays and those which allow more was unconstitutionally arbitrary. We cannot agree. The Legislature may reasonably believe that the larger the numbеr of free replays available, the greater the incentive to make cash payoffs. As the existence of such payoffs may be difficult to prove, the Legislature strove to avoid the problem simply by allowing only а small number of replays to accu
As we have noted in the past, "A classification having some reasonable basis does not offend [the Equal Protection] clause merely because it is not made with mathematical nicety or because in practice it results in some inequality.”
Naudzius v Lahr,
B. VAGUENESS CLAIM
In its review of
We are unable to fathom what the Legislature meant by 15 games. What is meant by one replay? What is the purpose of prohibiting a "knock off” button or making recordation оf free games illegal. [141 Mich App at 466 .]
We find these objections unpersuasive. Obviously, one replay is a single game awarded by the machine. A "knock off’ button is a button which allows free replays to be discharged without actually being played thus violating that section of the statute which requires free replays to be discharged only by reactivating the machine for one additional play. The statutory requirement that exempt machines keep no permanent record of the free replays is likewise perfectly comprehensible.
3
CONCLUSION
We hold that the draw poker machine at issue is an illegal gaming device under
Notes
In accordance with the generally accepted view that the terms "gaming” and "gambling” are synonymous, they are used interchangeably. See, e.g., Black’s Law Dictionary (5th ed), which defines "gaming” as "the practice or art of gambling.”
Numerous cases decided since the
Oatman
dеcision have reached the conclusion that a free replay is a thing of value. See, e.g.,
State v Pinball Machines, supra
at 926;
State v Lake Geneva Lanes,
22 Wis 2d
151,
153-154;
In prohibiting "knock off” buttons and the recording of free replays, the Legislature was attempting to make it more difficult for the owners of machines to make cash payoffs. See, е.g.,
United States v One Bally "Barrel-O-Fun”,
"The knock-off button for releasing free plays and the meter for recording the free plays released . . . serve no useful purpose on a machine designed merely for amusement and theyincrease the cost оf the machine without increasing the income from the machine when used for amusement.” [Quoting Turner v United States, 9 AFTR2d 2031 (1962).]
Peachey v Boswell,
240 Ind 604, 614;