Video Poker Machines - A Game or Gambling?
The video poker machines are being used as gambling devices. A reporter twice won $5 at a city of Oswego bar after achieving certain scores on its machine. In three other taverns bartenders promised to pay the reporter cash if he achieved certain scores, and at three more taverns, the reporter saw bar patrons win between $10 and $25 cash by playing the machines. In Maryland, Ohio and Pennsylvania states where authorities have aggressively prosecuted gambling crimes associated with video poker machines tax fraud and gambling conspiracies traced to organized crime have surfaced in several cases. In addition, an FBI expert on video gambling says police have linked organized crime operations to the video poker business in several states. Oswego County police and prosecutors say gambling on the video poker machines is a crime that ought to be punished, but they have made few arrests in recent years. District Attorney John Elliott said he recalled one video poker machine being confiscated last summer in the village of Mexico, but that was incidental to a drug investigation. Police say few people have complained about the machines and that makes it difficult to pursue convictions. Elliott said it is difficult to enforce laws and regulations governing the use of video poker machines as gambling devices because of conflicting statutes, state agency regulations and court rulings. Elliott said that if a local court or a state appellate court produced a specific decision regarding the legality of the machines, police would crack down on them. "Everyone would like an answer," Elliott said. "The police would like an answer and I'm sure the bar owners would like an answer, too." Legality aside, experts say the machines encourage compulsive gambling "One of my patients here is a housewife who is addicted to poker machines," said Dr. Valerie Lorenz of the National Foundation for the Study and Treatment of Pathological Gambling in Baltimore. "Over the course of four or five months, she lost $5,000 by playing the machines. She's a housewife, she doesn't work, that's one woman on one machine. "They're the worst thing we're seeing across the country right now," Loren continued.
"The machines are everywhere, and they're very addictive." Most video poker machines offer a video version of five-card draw. A handful feature more exotic games like dice games, horse-racing and slot-machine tumblers. In 1981, the state Lottery Division sought to put video blackjack and poker machines in public places, but that proposal was killed by the legislature. At the 20 taverns in Oswego County where the machines were observed, six varieties were identified. Some of them accepted only quarters, some of them dollar bills. Two of the 20 taverns had two machines, the others had one. The most common machine was Hi-Lo Joker Poker, produced by three companies International Game Technology of Reno, Nev., M. Kramer Manufacturing Co. of Lakewood, N,J., and SMS and Katz Co, of Point Pleasant, N. J. Joker Poker is an electronic version of draw poker, a game in which a player receives five cards and tries to build the best hand he can by drawing new cards from the dealer. In the video game, the computer which can be programmed to pay off frequently or infrequently acts as a dealer. The object of the video game is to build up credits, which are awarded by the machine for winning hands. Although "For Amusement Only" messages appear on some of the machines, they are used as gambling devices when bartenders pay cash prizes based on the number of credits players accumulate. At seven of the Oswego County taverns, bartenders agreed to pay $5 for every 20 credits accumulated by a player. The payoff went up to $10 for 40 credits, $15 for 60 credits and so on. According to FBI" investigator William Holmes in Washington, D.C., the machines first appeared in taverns and private clubs like the Veterans of Foreign Wars, American Legion back in 1978. Their popularity increased beginning in 1982, as interest in other video games waned, he said. Video poker is a popular attraction at casinos in Atlantic City and Las Vegas where video poker machines and slot machines together account for 43 percent of all gambling profits and the popularity carries over into illegal settings, Holmes said. "Any gambling endeavor that generates large sums of unaccountable money, attracts elements of organized crime" he said.
Holmes said court decisions in Ohio, Pennsylvania, Maryland and Tennessee have enabled police to crack down on illegal video gambling. "New York, like many other states, is somewhere in the middle," Holmes said. "It's in a transition stage. At one point nobody knew what they were, but then police recognized that they were gambling devices. Now it will take time for the judicial process to react." Although police agree that using the machines to gamble is illegal, the legality of having the machines in taverns is unclear. For instance, it is legal to possess a video poker machine in New York, but according to the state Division of Alcoholic Beverage Control it is illegal to have one in a tavern. The Liquor Authority, the division's ruling body, says it depends on local police to enforce its regulations because it has only 60 investigators to monitor 47,000 licensed bars in the state. And in February, the state Department of Law ruled that, under the state Constitution, the machines are gambling devices. A state Supreme Court judge in the Bronx ruled last summer, however that they aren't. That ruling Plato's Cave vs. the New York State Liquor Authority is on appeal, said Richard Chernela, an authority spokesman. The Liquor Authority is attempting to change its definition of a "gambling device" to include Joker Poker machines and similar video poker devices, but the rule change has been challenged by the state Office of Business Permits, which says the rule is too vague and could outlaw all video games. In states where police have cracked down on video gambling, it appears the video poker business is a lucrative one. For instance, in Youngstown, Ohio, a city of 125,000 just west of the New York state border, police say the illegal video poker business took in $4 million last year. Locally, police have confiscated few machines, but police believe they do take in thousands of dollars a year. In December 1984, Syracuse vice detectives raided the Eastwood American Legion Post and accused three post employees of running an illegal gambling operation on three Joker Poker machines.
The machines and about $250 were confiscated in the raid. One machine confiscated in that raid contained an internal meter that showed it had taken in more than $100,000 said Capt. Frank Sardino. However, he said it was impossible to determine how long the machine had been in use. Sardino said he thinks organized crime may have ties to the video poker business. In the Eastwood case, American Legion officers refused to say who owned the machines and no one ever tried to reclaim the devices after they were confiscated, Sardino said. Frank Donate lounge steward of the Eastwood American Legion, said in a recent interview that the machines were brought in by an "outside solicitor." Donato said he doesn't know who owned the video poker machines that were confiscated. Charges of second-degree promoting gambling and possession of a gambling device against Donato and two other post members were dropped after they agreed to never allow the machines in the post again. That has proven costly for the post, Donato said, because income from the machines used to pay for building maintenance and operation costs. Sardino said his officers confiscate eight to 10 machines a year, mostly in response to citizen complaints. In Syracuse, video poker machines are most popular in private clubs, he said. The city of Syracuse licenses video machines, including video poker. As part of the licensing process, the machines are inspected. One of the things they check for is a "knock-down" switch a mechanism that erases accumulated credits. Those devices are in violation of the state Penal Code and would be cause for denying a license, according to Officer Thomas Stimpson of the Syracuse Police Licensing Section. Unlike the city of Syracuse, bar owners and machine vendors in Oswego County do not have to license their video games, so it is impossible for police to determine who owns the machines, where they come from or how much money they take in. Oswego County Sheriff Charles Nellis and Oswego Police Chief Floyd Kunzwiler said they knew of no complaints about video poker machines filed with their respective departments. They also said they did not know who owned the machines or how they reached Oswego County.
Nellis said he intends to leave it up to each bar owner to decide whether they want to have video poker machines in their bars. According to one bar owner, who asked to remain anonymous, four or five vendors distribute video poker machines in Oswego County. In that bar owner's case, the machine in her tavern is owned by a video game vendor. The machine is set to pay off winners 65 percent of the time. "The highest payoff in the county," she says and she and the vendor split the remaining 35 percent. Private clubs in the county have so many of the machines that tavern owners are forced to have the machines in order to compete, she said. Likewise, a city of Oswego bar owner said his machine did not take in much money, but he refused to say exactly how much. "You're stirring up a lot of things that shouldn't be stirred up," the bar owner said. 'The cops know the machines are out there, but as long as no one gets hurt, they leave them alone." While police and prosecutors in New York state await a clear ruling on the legal status of video poker machines, law enforcement officials in some other states have already cracked down on the use of the devices. Consider activities in the following locations: In Maryland, FBI agents and state and local police conducted a statewide raid March 7, seizing hundreds of machines and "mounds of documents" from video game vendors. Twelve major vendors were targeted in an investigation that included surveillance and infiltration of video vendors operations, said Maryland Deputy State Prosecutor Gerald Ruter. "Basically, questions were raised, and we had no answers," Ruter said about why state officials started cracking down on the games. Ruter said there were basically three questions: were the machines being used legally, were vendors defrauding the government out of income tax revenues and who was responsible for bringing the machines into the state.
"What we found in ray opinion, was that there were tax fraud and gambling conspiracies under way, have determined that the tax implications are vast. Millions of tax dollars were not reported as income through these machines." Ruter also said his office traced various connections between organized crime and the video poker machine business. The devices became popular in Maryland in 1983, Ruter said and right now the poker machines are the hottest money-snaking machine anyone can own, throughout the nation." In Youngstown, Ohio, a city of 125,000, police cracked down on the video gambling business after conducting a three-month undercover investigation into city vendors. Police found the machines in bars, Veterans of Foreign Wars and American Legion posts and restaurants, said Detective Jack Palma, who headed the investigation. Police raided 120 locations where they knew 160 machines were located, but someone had tipped off the owners and only 84 machines were seized, Palma said. 'They're gambling devices, and that's what's so bad about them," Palma said. "There's a lucrative profit made off them, and it's going right to organized crime, I guarantee." Palma said his department's investigation showed that some machines in Youngstown were taking in $300 to $500 a day. After a "considerable dispute", the Pennsylvania state Attorney General's office won a court ruling in 1983 that banned most of the machines from the state, according to Robert Gentzel, a Stales spokesman for the state's attorney general. At present, mere possession of video poker machines can lead to gambling charges against machine owners and those who possess them. Prosecution in Pennsylvania has been so effective that they've forced more of the machines into New York state said Gene Griffin, an investigator with the New York State Division of Alcoholic Beverage Control. Distributors in Pennsylvania had such a glut of video poker machines that their price fell from about $3,000 each to $300 or $400. That encouraged New York distributors to buy them up, he said.
"The machines are everywhere, and they're very addictive." Most video poker machines offer a video version of five-card draw. A handful feature more exotic games like dice games, horse-racing and slot-machine tumblers. In 1981, the state Lottery Division sought to put video blackjack and poker machines in public places, but that proposal was killed by the legislature. At the 20 taverns in Oswego County where the machines were observed, six varieties were identified. Some of them accepted only quarters, some of them dollar bills. Two of the 20 taverns had two machines, the others had one. The most common machine was Hi-Lo Joker Poker, produced by three companies International Game Technology of Reno, Nev., M. Kramer Manufacturing Co. of Lakewood, N,J., and SMS and Katz Co, of Point Pleasant, N. J. Joker Poker is an electronic version of draw poker, a game in which a player receives five cards and tries to build the best hand he can by drawing new cards from the dealer. In the video game, the computer which can be programmed to pay off frequently or infrequently acts as a dealer. The object of the video game is to build up credits, which are awarded by the machine for winning hands. Although "For Amusement Only" messages appear on some of the machines, they are used as gambling devices when bartenders pay cash prizes based on the number of credits players accumulate. At seven of the Oswego County taverns, bartenders agreed to pay $5 for every 20 credits accumulated by a player. The payoff went up to $10 for 40 credits, $15 for 60 credits and so on. According to FBI" investigator William Holmes in Washington, D.C., the machines first appeared in taverns and private clubs like the Veterans of Foreign Wars, American Legion back in 1978. Their popularity increased beginning in 1982, as interest in other video games waned, he said. Video poker is a popular attraction at casinos in Atlantic City and Las Vegas where video poker machines and slot machines together account for 43 percent of all gambling profits and the popularity carries over into illegal settings, Holmes said. "Any gambling endeavor that generates large sums of unaccountable money, attracts elements of organized crime" he said.
Holmes said court decisions in Ohio, Pennsylvania, Maryland and Tennessee have enabled police to crack down on illegal video gambling. "New York, like many other states, is somewhere in the middle," Holmes said. "It's in a transition stage. At one point nobody knew what they were, but then police recognized that they were gambling devices. Now it will take time for the judicial process to react." Although police agree that using the machines to gamble is illegal, the legality of having the machines in taverns is unclear. For instance, it is legal to possess a video poker machine in New York, but according to the state Division of Alcoholic Beverage Control it is illegal to have one in a tavern. The Liquor Authority, the division's ruling body, says it depends on local police to enforce its regulations because it has only 60 investigators to monitor 47,000 licensed bars in the state. And in February, the state Department of Law ruled that, under the state Constitution, the machines are gambling devices. A state Supreme Court judge in the Bronx ruled last summer, however that they aren't. That ruling Plato's Cave vs. the New York State Liquor Authority is on appeal, said Richard Chernela, an authority spokesman. The Liquor Authority is attempting to change its definition of a "gambling device" to include Joker Poker machines and similar video poker devices, but the rule change has been challenged by the state Office of Business Permits, which says the rule is too vague and could outlaw all video games. In states where police have cracked down on video gambling, it appears the video poker business is a lucrative one. For instance, in Youngstown, Ohio, a city of 125,000 just west of the New York state border, police say the illegal video poker business took in $4 million last year. Locally, police have confiscated few machines, but police believe they do take in thousands of dollars a year. In December 1984, Syracuse vice detectives raided the Eastwood American Legion Post and accused three post employees of running an illegal gambling operation on three Joker Poker machines.
The machines and about $250 were confiscated in the raid. One machine confiscated in that raid contained an internal meter that showed it had taken in more than $100,000 said Capt. Frank Sardino. However, he said it was impossible to determine how long the machine had been in use. Sardino said he thinks organized crime may have ties to the video poker business. In the Eastwood case, American Legion officers refused to say who owned the machines and no one ever tried to reclaim the devices after they were confiscated, Sardino said. Frank Donate lounge steward of the Eastwood American Legion, said in a recent interview that the machines were brought in by an "outside solicitor." Donato said he doesn't know who owned the video poker machines that were confiscated. Charges of second-degree promoting gambling and possession of a gambling device against Donato and two other post members were dropped after they agreed to never allow the machines in the post again. That has proven costly for the post, Donato said, because income from the machines used to pay for building maintenance and operation costs. Sardino said his officers confiscate eight to 10 machines a year, mostly in response to citizen complaints. In Syracuse, video poker machines are most popular in private clubs, he said. The city of Syracuse licenses video machines, including video poker. As part of the licensing process, the machines are inspected. One of the things they check for is a "knock-down" switch a mechanism that erases accumulated credits. Those devices are in violation of the state Penal Code and would be cause for denying a license, according to Officer Thomas Stimpson of the Syracuse Police Licensing Section. Unlike the city of Syracuse, bar owners and machine vendors in Oswego County do not have to license their video games, so it is impossible for police to determine who owns the machines, where they come from or how much money they take in. Oswego County Sheriff Charles Nellis and Oswego Police Chief Floyd Kunzwiler said they knew of no complaints about video poker machines filed with their respective departments. They also said they did not know who owned the machines or how they reached Oswego County.
Nellis said he intends to leave it up to each bar owner to decide whether they want to have video poker machines in their bars. According to one bar owner, who asked to remain anonymous, four or five vendors distribute video poker machines in Oswego County. In that bar owner's case, the machine in her tavern is owned by a video game vendor. The machine is set to pay off winners 65 percent of the time. "The highest payoff in the county," she says and she and the vendor split the remaining 35 percent. Private clubs in the county have so many of the machines that tavern owners are forced to have the machines in order to compete, she said. Likewise, a city of Oswego bar owner said his machine did not take in much money, but he refused to say exactly how much. "You're stirring up a lot of things that shouldn't be stirred up," the bar owner said. 'The cops know the machines are out there, but as long as no one gets hurt, they leave them alone." While police and prosecutors in New York state await a clear ruling on the legal status of video poker machines, law enforcement officials in some other states have already cracked down on the use of the devices. Consider activities in the following locations: In Maryland, FBI agents and state and local police conducted a statewide raid March 7, seizing hundreds of machines and "mounds of documents" from video game vendors. Twelve major vendors were targeted in an investigation that included surveillance and infiltration of video vendors operations, said Maryland Deputy State Prosecutor Gerald Ruter. "Basically, questions were raised, and we had no answers," Ruter said about why state officials started cracking down on the games. Ruter said there were basically three questions: were the machines being used legally, were vendors defrauding the government out of income tax revenues and who was responsible for bringing the machines into the state.
"What we found in ray opinion, was that there were tax fraud and gambling conspiracies under way, have determined that the tax implications are vast. Millions of tax dollars were not reported as income through these machines." Ruter also said his office traced various connections between organized crime and the video poker machine business. The devices became popular in Maryland in 1983, Ruter said and right now the poker machines are the hottest money-snaking machine anyone can own, throughout the nation." In Youngstown, Ohio, a city of 125,000, police cracked down on the video gambling business after conducting a three-month undercover investigation into city vendors. Police found the machines in bars, Veterans of Foreign Wars and American Legion posts and restaurants, said Detective Jack Palma, who headed the investigation. Police raided 120 locations where they knew 160 machines were located, but someone had tipped off the owners and only 84 machines were seized, Palma said. 'They're gambling devices, and that's what's so bad about them," Palma said. "There's a lucrative profit made off them, and it's going right to organized crime, I guarantee." Palma said his department's investigation showed that some machines in Youngstown were taking in $300 to $500 a day. After a "considerable dispute", the Pennsylvania state Attorney General's office won a court ruling in 1983 that banned most of the machines from the state, according to Robert Gentzel, a Stales spokesman for the state's attorney general. At present, mere possession of video poker machines can lead to gambling charges against machine owners and those who possess them. Prosecution in Pennsylvania has been so effective that they've forced more of the machines into New York state said Gene Griffin, an investigator with the New York State Division of Alcoholic Beverage Control. Distributors in Pennsylvania had such a glut of video poker machines that their price fell from about $3,000 each to $300 or $400. That encouraged New York distributors to buy them up, he said.