Court Ponders Whether Popular Games Leased By Jacksonville-Based Company Are Slot Machines

In a legal dispute that’s dragged on for more than three years and has eluded a legislative remedy, an appellate court is grappling with whether popular tabletop games are illegal slot machines or more-benign entertainment options for customers of bars and restaurants.

The 1st District Court of Appeal heard arguments Tuesday in the case centered on games produced by Blue Sky Games and leased by Jacksonville-based Gator Coin II Inc., after a Tallahassee judge last year sided with gambling regulators who maintain that the games violate a Florida law banning slot machines in most parts of the state.

Proponents of the devices, known as “pre-reveal games,” contend that the machines are legal because the computer games include a “preview” feature that advises players of the outcome of the games.

But critics, including the Department of Business and Professional Regulation, say that doesn’t matter because the “random number generator” used to create the games equates to the definition of slot machines, which are games of “chance,” under state law.

There’s nothing players can do to affect the outcome of the game, which fits the definition of slots, department attorney Daniel McGinn told a three-judge panel Tuesday.

But Bryan DeMaggio, a lawyer representing Gator Coin, argued that the element of “chance” was removed because players are advised whether they will win before playing. The “randomness” of the game is removed when the player knows the outcome, he said.

“He can walk away at any time. He doesn’t have to play,” DeMaggio said.

A key issue in the case involves whether the slot-machine law applies to playing a single game or a series of games. While the outcome of the first game is revealed in advance, a player at the outset does not know the results of subsequent games.

Judge James Wolf repeatedly asked lawyers on both sides whether the court should consider whether a single game or a series of games violates the law.

“I’m a simple kind of guy. It comes down to whether we can consider the entire course of the play or one particular game. Their argument is one particular game is not a game of chance because you know the outcome. … What in the statute allows us to consider the entire course of play?” he asked, pointing out that the state law defines slot machines, in part, as a device whose outcome is “unpredictable by the user.”

The answer rests in the way the machines generate the games, which the state believes violates the law, said McGinn, whose department regulates gambling.

“From our perspective, it doesn’t matter whether it’s one game. It doesn’t matter whether it’s multiple games,” he said.

The appeal follows a decision last year by Leon County Circuit Judge John Cooper, who reversed himself after originally siding with the manufacturer and distributor of the machines.

Cooper changed his mind after the Seminole Tribe of Florida asked him to reconsider the decision. Blue Sky and Gator Coin sued the state after investigators with the Division of Alcohol, Tobacco and Firearms decided the games were effectively illegal slot machines and began confiscating the devices.

The Seminoles, who intervened in the case on the side of regulators, asked the Legislature to address the legality of the games or risk having the state lose millions of dollars in a revenue-sharing agreement that gives the tribe the exclusive rights to operate slots outside Broward and Miami-Dade counties.

But lawmakers earlier this year failed to approve any legislation that would remedy the dispute.

Gator Coin owners Kathey Fanning and her son, Jonathan, said the machines are simply another form of entertainment --- such as pool tables and jukeboxes --- leased by bar owners who have alcohol licenses.

She said her company, founded in 1946, has warehouses full of the machines and is picking up even more devices weekly, as regulators continue to give notice to operators that particular machines may be illegal.

“The locations of course are concerned. They don’t want to lose their alcohol license,” Kathey Fanning told reporters after Tuesday’s hearing.

The mother-and-son pair stressed that the machines they lease to small businesses can’t be found in “game rooms,” internet cafes or other questionable storefronts.

“We are strictly dealing with people that are in a licensed environment, that are in a controlled environment,” Kathey Fanning said.

DeMaggio told The News Service of Florida the judges understand the issues involved in the case.

“They perceive the issues. I think ultimately it’s going to rise and fall on whether they consider it one game or a series of games,” he said after Tuesday’s arguments. “You don’t have to be a lawyer to have sat through that to realize that that’s arguably what the court is wrestling with. It’s our contention that it’s one game and one play. And if they reject that, we’re going to lose.”

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