Plato's Cave Corp. v. State Liquor Authority

• Decision Date: 19 December 1985
• Citation: 115 A.D.2d 426,496 N.Y.S.2d 436
• Parties: In re PLATO'S CAVE CORPORATION, Petitioner-Respondent, For a Judgment etc., v. STATE LIQUOR AUTHORITY et al., Respondents-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 436

496 N.Y.S.2d 436

115 A.D.2d 426

In re PLATO'S CAVE CORPORATION, Petitioner-Respondent,

For a Judgment etc., v. STATE LIQUOR AUTHORITY et al., Respondents-Appellants.

Supreme Court, Appellate Division,

First Department.

Dec. 19, 1985.

M.I. Katcher, II, New York City, for petitioner-respondent.

M.J. Greenfeld, New York City, for respondents-appellants.

Before KUPFERMAN, J.P., and SANDLER, ASCH, FEIN, and ROSENBERGER, JJ.

MEMORANDUM DECISION.

Judgment of the Supreme Court, Bronx County (Irma V. Santaella, J.), entered on March 6, 1985, which annulled and vacated respondent State Liquor Authority's determination dated September 4, 1984, which found petitioner Plato's Cave Corporation guilty of two charges of violating the Alcoholic Beverage Control Law, suspended petitioner's license for 10 days deferred for twelve months, directed the payment of petitioner's compliance bond in the sum of $1,000 and directed petitioner to remove the machine "Joker Poker" from the premises, is modified, on the law, to reinstate the respondent's determination on Charge No. 1 and to remand to respondent for imposition of a penalty as to this charge, and otherwise affirmed without costs.

Respondent's investigator played a Joker-Poker video game located in petitioner's premises. He won twenty-four free games, which he played back into the machine. After a hearing, petitioner was found guilty of Charge No. 1--suffering or permitting gambling on the premises, and of Charge No. 2--permitting the premises to become disorderly by permitting a gambling device to be kept on the premises. The respondent imposed the penalty of a 10-day license suspension, deferred, plus payment of $1,000 of petitioner's compliance bond and directed the removal of the Joker-Poker machine.

Special Term granted petitioner's Article 78 petition finding the respondent's determination arbitrary, capricious and an abuse of discretion with respect to both of the charges sustained. We disagree with Special Term's conclusion as to Charge No. 1 and modify accordingly.

Section 225.00 of the Penal Law presents the following definitions relating to gambling offenses that are instructive since the Alcohol Beverage Control Law contains no such definitions:

"1. 'Contest of chance' means any ... gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.

"2. 'Gambling'. A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance ... upon an agreement or understanding that he will receive something of value in the event of a certain outcome.

....

"6. 'Something of value' means ... any form of credit or promise ... involving extension of a service, entertainment or a privilege of playing at a game ... without charge.

"7. 'Gambling device' means any device, machine, paraphernalia or equipment which is used or usable in the playing phases of any gambling activity ...."

Special Term found that respondent's investigator had not received anything of value in playing the Joker-Poker video game. However, Penal Law § 225.00, subdivision 6, provides that "something of value" includes the "privilege of playing at a game ... without charge." The testimony at the hearing clearly indicated the investigator had won credits for winning hands and used these credits for continued play without further payment.

Further, respondent determined that the Joker-Poker video game is one in which "the outcome depends in the largest degree upon an element of chance." Special Term recognized that a degree of skill plays a part in the game, but failed to measure that degree of skill against the definition of "contest of chance" in Penal Law § 225.00, subdivision 1. Under that law, a gambling device depending "in a material degree upon an element of chance," notwithstanding that skill may be involved, is a contest of chance.

Although there is a degree of skill and concentration involved in playing poker, "the outcome depends in a material degree upon an element of chance," i.e., the draw of the cards. (See WNEK Vending & Amusements Co., Inc. v. City of Buffalo, 107 Misc.2d 353, 434 N.Y.S.2d 608, where outcome of video games depended primarily upon physical skills such as coordination, reflexes, muscular control, concentration, etc.)

The evidence before the Hearing Officer was sufficient to sustain the charge of permitting gambling on the premises. Each of the requisite elements to establish gambling on the premises and the use of a gambling device (consideration, chance and reward) was proven (Penal Law § 225.00, subds. 1, 2, 6 and 7). Thus, respondent's determination as to this charge was neither arbitrary, capricious, nor an abuse of discretion.

However, Special Term correctly vacated that part of the respondent's determination which sustained Charge No. 2--permitting the premises to become disorderly, since respondent failed...