U.S. v. Twenty-Eight ""Mighty Payloader"" Coin-Operated Gaming Devices
| Decision Date | 11 June 1980 |
| Docket Number | TWENTY-EIGHT,COIN-OPERATED,FORTY-FOUR,TWENTY-FOUR,SWEEP-STAKES,Nos. 79-1432,79-1448,s. 79-1432 |
| Citation | 623 F.2d 510 |
| Parties | Page 510 623 F.2d 510 80-2 USTC P 16,341 UNITED STATES of America, Appellant, v."MIGHTY PAYLOADER"GAMING DEVICES, $1,626.06 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number Unknown, Bearing Iowa License 5/2 FX 3167, and Miscellaneous Carnival Prizes, and/or Jeffrey A. Blomsness, Twenty-Four "Poker" Coin-Operated Gaming Devices, $2,247.29 in United States Coin and Currency, One Eight Foot by Fifteen Foot Trailer, Serial Number 1232, Bearing Delaware License T 75154, and Miscellaneous Carnival Prizes, and/or Lou Hall and Wayne Chambers, Forty-Four "Sweepstakes" Coin-Operated Gaming Devices, $1,990.95 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number AGO 378303, Bearing Iowa License 5/2 FX 2728, and Miscellaneous Carnival Prizes, and/or Janice Mars, Ten "Mighty Payloader" Coin-Operated Gaming Devices, $872.68 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number 266, Bearing Texas Trailer License D 46-593 and Miscellaneous Carnival Prizes, and/or Janice Mars, Twenty-Eight "Mighty Payloader" Coin-Operated Gaming Devices, $1,287.75 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number 226-2460, Bearing Iowa License 5/2 FX 3652 and Miscellaneous Carnival Prizes, and/or Janice Mars, Twenty-Eight "Mighty Payloader" Coin-Operated Gaming Devices, $889.62 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number H052, Bearing Florida Temporary License X 65034, and Miscellaneous Carnival Prizes, and/or Janice Mars, Twenty-Four "Crompton Penny Falls" Coin-Operated Gaming Devices, $55.50 in United States Coin and Currency, and Miscellaneous Carnival Prizes, and/or Robert Vogt and Carl Gatlin, Sixty "Sweep-Stakes" Coin-Operated Gaming Devices, $2,027.60 in United States Coin and Currency, and Miscellaneous Carnival Prizes, and/or Jeffrey A. Blomsness, Appellees. UNITED STATES of America, Appellee, v."MIGHTY PAYLOADER"GAMING DEVICES, $1,626.06 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number Unknown, Bearing Iowa License 5/2 FX 3167, and Miscellaneous Carnival Prizes, and/or Jeffrey A. Blomsness, Appellants. UNITED STATES of America, Appellee, v."POKER"GAMING DEVICES, $2,247.29 in United States Coin and Currency, One Eight Foot by Fifteen Foot Trailer, Serial Number 1232, Bearing Delaware License T 75154, and Miscellaneous Carnival Prizes, and/or Lou Hall and Wayne Chambers, Appellants. UNITED STATES of America, Appellee, v."SWEEPSTAKES"GAMING DEVICES, $1,990.95 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number AGO 378303, Bearing Iowa License 5/2 FX 2728, and Miscellaneous Carnival Prizes, and/or Janice Mars, Appellants. UNITED STATES of America, Appellee, v. TEN "MIGHTY PAYLOADER"GAMING DEVICES, $872.68 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number 266,Bearing Texas Trailer License D 46-593 and Miscellaneous Carnival Prizes,and/or JaniceMars, Appellants. UNITED STATES of America, Appellee, v."MIGHTY PAYLOADER"GAMING DEVICES, $1,287.75 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number 226-2460, Bearing Iowa License 5/2 FX 3652 and Miscellaneous Carnival Prizes, and/or Janice Mars, Appellants. UNITED STATES of America, Appellee, v."MIGHTY PAYLOADER"GAMING DEVICES, $889.62 in United States Coin and Currency, One Eight Foot by Twenty Foot Trailer, Serial Number H052, Bearing Florida Temporary License X 65034, and Miscellaneous Carnival Prizes, and/or Janice Mars, Appellants. UNITED STATES of America, Appellee, v."CROMPTON PENNY FALLS"GAMING DEVICES, $55.50 in United States Coin and Currency, and Miscellaneous Carnival Prizes, and/or Robert Vogt and Carl Gatlin, Appellants. UNITED STATES of America, Appellee, v. SIXTY ""GAMING DEVICES, $2,027.60 in United States Coin and Currency, and Miscellaneous Carnival Prizes, and/or Jeffrey A. Blomsness, Appellants. to 79-1455. United States Court of Appeals, Eighth Circuit |
| Court | U.S. Court of Appeals — Eighth Circuit |
Sam Sexton, Jr., Fort Smith, Ark., for appellant.
Andrew S. Gordon (argued), Atty., Dept. of Justice, William G. Otis, Washington, D. C., W. H. Dillahunty, U. S. Atty., Little Rock, Ark., and J. Michael Fitzhugh, Asst. U. S. Atty., Western District of Arkansas, Fort Smith, Ark., on brief, for appellees.
Before GIBSON, Chief Judge, * and LAY and McMILLIAN, Circuit Judges.
The district court determined that various coin-operated machines were taxable as gaming devices under 26 U.S.C. § 4461. 1 The court held, however, that the machines were not to be forfeited under 26 U.S.C. § 7302. The owners of the machines have appealed, arguing that the machines do not fall within the definition of 26 U.S.C. § 4462 for several reasons. The Government has cross-appealed, urging that the district court erred in not ordering forfeiture. We hold the machines are subject to the special tax, but that the district court erred in not ordering forfeiture.
On appeal the owners of the machines urge inter alia that the machines are games of skill and as such are not gaming devices; that the prizes won are less than the cost to the player and without the possibility of gain; therefore, there can be no tax under the statute.
Facts.
In September 1978, the machines in question were seized by the Internal Revenue Service (IRS) as gaming devices on which no tax had been paid, at the Fort Smith Fair held at Fort Smith, Arkansas.
The owners' basic argument on appeal 2 is the evidence fails to show that the machines in question were coin-operated 3 gaming devices within the meaning of 26 U.S.C. § 4462. 4 They urge the machines are games of skill, and the element of chance, if any, is insufficient to render the machines gaming devices under the statute. The machines involved in these forfeiture proceedings are referred to as the Poker Reno, Mighty Payloader, Crompton Penny Falls, and the Sweepstakes.
Poker Reno Machines.
The Poker Reno type machines were described and found to be gaming devices in United States v. 20 "Dealer's Choice" Machines & Coin Contents of $3.50, 341 F.Supp. 1147 (D.S.C.1972), rev'd on other grounds, 483 F.2d 474 (4th Cir. 1973). Similar machines have been found judicially and administratively to be gaming devices within the meaning of section 4462. United States v. One Bally "Barrel-O-Fun" Coin-Operated Gaming Device, 224 F.Supp. 794 (M.D.Pa.1963), aff'd sub nom. Brozzetti v. Rogers, 337 F.2d 857 (3rd Cir. 1964); Rev.Rul. 72-566, 1972-2 C.B. 583; Rev.Rul. 56-309, 1956-2 C.B. 893. The fact that the Poker Reno machines, unlike the machines in the cases cited, did not have an electrical control which, in the owners' words, "deprived the player of the opportunity to exercise his skill in playing the machine," is not decisive, since the amount of time involved in playing the machine does not alter the substantial element of chance involved. The evidence shows that the "skill" involved in playing was only a small factor and that the element of chance was a substantial factor in winning. The fact that there may be some skill involved in the game is not determinative. United States v. Korpan, 354 U.S. 271, 77 S.Ct. 1099, 1 L.Ed.2d 1337 (1957). When there is a substantial element of chance involved, the fact that skill in operating the machine is helpful in attaining the end sought does not take the machine out of the type defined by the statute. See United States v. 24 Digger Merchandising Machines, 202 F.2d 647, 649-50 (8th Cir.), cert. denied, 354 U.S. 998, 73 S.Ct. 1140, 97 L.Ed. 1404 (1953). The district court found that there was a substantial element of chance involved in the successful operation of the Poker Reno machines. There was also evidence that the return on the machines was greater than the 10$ investment. Play on these machines is initiated by insertion of a coin. In addition, the regulations specifically state that the Poker Reno type machines are covered by the statute. 26 C.F.R. § 45.4462-1(a)(2)(v). The district court's finding that the Poker Reno machines are coin-operated devices within the meaning of section 4462 is not clearly erroneous.
Mighty Payloader, Crompton Penny Falls and Sweepstakes Machines.
The Mighty Payloader, Crompton Penny Falls and Sweepstakes machines are similar in their operation. The district court described the operation of those machines in the following manner:
The Mighty Payloader contains a blade which constantly and steadily moves across the playing surface. On the playing surface are tokens, prizes and coins. At the front of the machine is a coin slot. When the player inserts a coin through the coin slot onto the playing surface, the coin may land on the playing surface, be pushed by the moving blade and thereby push one of the tokens, coins or prizes on the playing surface into the dispensing bin. The player has some control over where his coin lands on the playing board. Since the spot where the coin lands totally controls whether the player wins, he has some, but not total, control over whether he wins or loses.
United States v. 28 "Mighty Payloader" Coin-Operated Gaming Devices, No. 79-2016 (W.D.Ark., filed May 18, 1979).
The district court found these machines were operated by insertion of a quarter and that the value of the prizes varies but some were worth at least $1.00. It also found there is a substantial element of chance involved in playing these games. We cannot say the machines are exempt as a matter of law under 26 C.F.R. § 45.4461-1(a).
As noted in the discussion of the Poker Reno games, the...
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