Coin Machine Review (& Pacific ...)

Issue: 1947 September

New Maryland License Law
Specifically Legalizes Games
by Walter W. Hurd
A new law was added to the statutes of
Maryland, really a new section under the
general title of "Licenses." The section it-
self bears the sub-title, "Pin Ball Machines"
and becomes one of the latest state license
systems set up for amusement games.
An analysis of postwar legislation on coin
machines should be helpful in I!;iving a clue
to probable trends and the way in which
s tate legislatures may be thinking. It may
be assumed also that every new license law
that goes into effect will set up some kind
of precedent and will be referred to when
other legislatures come to consider the li-
censing idea.
Every statute also has some good points
in it and can be used by the trade as argu-
ment against unfavorable proposals that are
always cropping up in the various sta tes.
Th e new Maryland pin ball license went
into effect June 1 and the trade by this time
has had a small amount of experience with
it. One prominent coinman in Maryland
said the law has been accepted as fact, but
th at men in business nowadays do not wel-
come any additional taxes, of whatever na-
t ure they may be.
, This is an expression of an attitude that
runs through all business today. The total
tax load is so heavy on business enterprises
that no new tax is welcomed, even though
there may be some gains in a particular li -
cense system.
License proposals for pin ball I!;ames in
Maryland have a long history, extending
back into the early history of pin ball
games. In those early days of pin ball, the
trade was anxious to establish the legality
of the new form of amusement and the log-
ical way to do it seemed to be to get states
and citi es to pass license laws that would
settle the question of legality.
State licensing spread to a number of
states but, due to the many involvements of
law and legislation , many of the license stat-
utes placed a tax on amusement games but
did not legalize them.
It is now very interesting to note that
the new Maryand law does specifically
legalize the two general types of amuse-
ment games which are covered by the
license system.
One paragraph in the new law says:
"The maintenance, possession and
operation of machines of either of the
types hereinbefore described, and the
awarding of free games to p layers of
said machines, as above set forth, are
hereby declared to be lawful, when such
machines are duly licensed in accord-
ance with the provisions of this section,
any other provision of the law notwit h -
standing."
That is as clear a statement on legalizin g
the games licensed as could be asked for,
and it looks as if the long fight many of us
put up for definite legalization of games is
bearing fruit.
The Maryland law will thus give much
new force to the argument that if states and
cities are going to tax amusement games,
then the laws and ordinances passed should
definitely legalize the machines licensed.
The trade has been hurt by too many in-
stances in which a tax has been placed on
machines, but they were still subject to be-
ing called illegal at any time.
Viewed as a whole, the Maryland statute
is brief and simple enough, by comparison
with some other state license laws. The form
in which laws · are written, of course, de-
pends so much on custom and precedent in
each state that there is little the trade can
do about the complex bills that often show
up, and sometimes become law. The law
under consideration happens to be a section
in a general state license system and that
means a lot of the general provisions that
might appear in li cense bills are already
taken care of in th e general sections of a
law that has been in effect for years.
The pin ball li cense th at once existed in
New York City was an outstanding example
of the brevity that can be used to license
games. The pin ball provisions were simply
a short section in the general city license
statute. .
Many stales now have a general business
license law and in such states, if a license
proposal for pin ball comes up , the simplest
plan would be to add a new section' in th e
general statute. But legislation must take a
course peculiar to each state or city, so in
most cases there is not much the trade can
do about it. It is always good argument,
though, to plead for sim plicity and brevity.
A very commendable feature in the Mary-
land law is that it confines itself to two gen-
eral types of machines, strictly in the amuse-
Illent field. The trend ig state legislation for
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so many years with respect to coin machines
had been to set up an all-coverage statute.
It is well known in the trade how such in-
clusive statutes have · worked hardship on
some types of machines.
All too often the three general types-
amusement, music and vending machines-
would be included in a general bill placing
a taxation rate on each type. Time and ex-
perience has shown that it is almost impos-
si ble to a djust tax rates properly on such a
wholesale scale.
Even if vending machines were omitted
from some of these general bills, music ma-
chines would be included in a proposal to
license amusement games. The injustices
which some of these laws have worked are
now a matter of history.
The trade should be prepared to take such
precedent as the Maryland license law and
use it as argument for including only one
general type of machine in license propos-
als. As time goes on, the three main branches
of the industry become more and more dif-
ferentiated and therefore should have sep-
arate treatment in any type of legislation
that comes up.
The new postwar trend in which operators
of vending machines tend to become a part
of the soft drink, candy, or cigarette trades
mav put a new slant on legislation ·affecting
vending machines in the future, and also
create new legal problems for the operators
involved.
Maryland has generally shown a tendency
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10 keep the principal types of machines sep-
arate, although some all-inclusive bills have
come up. A music license law was kept sep-
arate from games and other machines. An
unfortunate type of law for taxing vendors
was also passed once, inspired by the "oppo-
sition" to vending machines, but the law
lost in court.
Now a new law relating only to amuse~
ment games, as separate and distinct from
aJl other types of machines, has gone on the
books in the state. Such types of legislation
will prevent some of the unfortunate situa-
tions that have arisen in which one group of
the Industry would be fighting at cross pur-
poses with another group.
The ever-increasing costs of operation,
and the overlapping of so many taxes of dif-
ferent kinds, now make it necessary that all
tax propo.sals be resisted. But still it seems
impossible to prevent the spread of new tax
laws, and if they must come to the coin ma-
chine trade, then the best plan is to frame
laws that relate to only one type of machine
as much as possible.
Let's hope that Maryland has really set a
precedent on this point.
The statute calls them pin ball machines
and gives the term rather broad coverage.
[n trade terms, it includes free-play pin ball
and also console machines, even the ones
with spinning reels. Due to the continued
lise of the term "free play," it could be ar-
gued that the statute does not cover simple
novelty games without free-play features.
The statute provides that no free-play
pin ball machines, "as hereinafter defined,"
shall he operated without a license. It also
makes the same requirement for free-play
console machines. Thus, there are two gen -
eral types of machines included in the li-
cense plan.
As to definitions, "a free-play pin ball ma-
ch ine" is one that accepts one or more coins,
releases one or more balls for the use of th e
player, to be propelled by means of a plun-
ger. If the player gets certain scores or com-
binations of scores, the machine rewards the
player with a specified numb er of fre e
games, "allowing the player to continue to
play the machine without the insertion of
additional coins or token s."
That is a good definition of a free-play
gam e and definitely covers the full use of
fre e plays. Payouts, of course, are forbidden
with both types of machines. The statute
mention s payouts in coins or tokens and
han s them.
A free-play console machine has the mech-
anism encased in a wood or metal cabinet,
with a backboard upon which are certain
combinations of numbers or symbols which
the player must match. The insertion of one
or more coins by thS! player releases th e
mechanism and causes two or more reels to
spin. If the reels stop on specified combina-
tions, matching those on the backboards, the
machine rewards the player with a specified
number of free games. It allows the player
to continue to play the machine without the
insertion (if additional coins or tokens. Pay-
outs in cash or tokens are banned.
Both types of machines include one-balls.
The mention of backboards and spinning
reels in the definition of console machines
wiII attract attention among operators.
The possession as well as the operating- of
such machines for public entertainment or
gain, and also the awarding of free garnes,
are declared to be lawful by the statute.
The question of children playing the games
is handled by drawing the line at 18, young
people under that age being banned. Diffi-
culty is always apparent in such restrictions
because it is hard for location owners, and
practically impossible for the operator, to
enforce the ban. Notices can be posted to
that effect, and in that way help enforce the
law. ·
The Maryland law specifies that the party
"operating or possessing any such machine"
should not permit any person under 18 to
play.
Who is responsible for paying the license
fee under the Maryland law? The statute
requires that the party "keeping, maintain-
ing, possessing or operating" the specified
machines is responsible for violations. Evi-
dently, this pretty broad coverage of respon-
sibility was inserted so that either the owner
or the location owner where machine is
placed could be held responsible. The letter
of the law seems to lean toward the location
owner as the one chiefly responsible, but in
trade practice the man who owns the ma-
chine takes care of tax matters through mu-
tual arrangement with location owners.
The fees are average, in comparison with
other license laws in states and cities. In
modern times they may be considered as
reasonable. The license fee for the free-play
pin ball machines is $10 per year, and a $25
fee is required for the console type. The fee
.
can be prorated monthly.
The statute also makes th e fair provision
that th e li cense is tran sferable to any ma-
chine of the same type. Fees are paid to the
county clerk in each county where the ma-
chines are located. In fact, the statute con-
forms to Maryland precedent and gives im-
portance to the county. A closing paragraph
says the license applies to Kent, Queen
Anne's and Caroline Counties only.
The fi scal license year begins May 1 each
year, so it will be another eight months or
more before reports are available on the first
years' operation of the law.
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412 9th St., N. W . • 01. 1625
WASHINGTON 4 . D . c.

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