BY
MIKE -
SHAW
'·
A CALIFORNIA STORY • BUFFALO 7 TRIAL DRAGS ON • CHUCK E. LEAPS BEFORE HE LOOKS • WARNER
"BLEW IT" • COIN-OP COMPUTERS ARRIVE • SOL TABB BOWS OUT • VIDEO LOnERY UNDER SIEGE •
ATARI IN THE COURTS • JAPANESE COPIES NAILED • ·MICHIGAN OPS BEAT BACK TAX • TORNADO TOUR
CROWNS CHAMPS • GRIM REAPINGS • AVMDA MEMBERS MULL RESTRICTIVE ORDINANCES
A CALIFORNIA
STORY
States and municipalities searching
for ways to cash in on what they believe
o be massive profits made by video
game operators are looking to state-
wide tax issues. State officialS believe
they can solve some of their budgetary
problems with revenues from opera-
ors while eliminating the vast differ-
ences in the way communities tax
video games.
Pennsylvania ' has been considering
a statewide tax tor several months. The
issue has gained some support there
from operators who must pay up to
S500 per game to place their machines
in some communities.
But in California. where a measure
calling tor 6 to 1 0 percent of operator
revenues has been introduced to state
egislators. the proposed tax is more
d em anding than most ordinances
within the state. and operators there
are trying to gather steam tor a battle
a gainst such legislation. (See related
story, pg. 70.)
The tax "idea" (no formal bill has
been submitted as of this writing) was
introduced by Senate Finance Com-
mittee Chairman Alfred Alquist of San
Jose November 8 and is being con-
sid ered by the state's tax collecting
agency, the Board of Equalization.
The board estimated the income
from video games will be $832 million
in California this year. meaning a 6
percent tax would raise more than $50
million. The projected deficit tor the
state tor 1983 is S 1 billion.
The California Coin Machine Asso-
ciation (CCMA)-which,.until Novem-
ber 10 was known as the California
Musi c Merchants Association-
responded to the issue by calling a
December 10 board meeting in San
10
FrancisCo. Thl association decided to
appoint the lobbying firm of Wendt
and Loper to keep an eye on its inter-
ests in the statehouse. Iri tdct the assoc-
itation appointed John Wendt and
Dennis Loper its executive directors.
"We decided we should tight this
tax, oppose it" said long. time CCMA
President Ben Murillo. He indicated
the association does not object to som~
form of a sales tax but that the 6 to 10
percent the state wants is too much.
Larry PowelL who heads an associa-
tion of Sacramento operators formed
last April to wage a war against pro-
posed legislation that. Powell said;
would have wiped out 60 percent of
the games in Sacramento County,
doesn't want to see any kind of state
video game tax become law in
California.
"We are told the sales tax will super-
sede local taxes and fees. but we fear
that communities that want to get
money out of the games will find their
way around that by installing a system
of conditional use permits," Powell
said. He said communities can issue
such permits tor a period of a year
each and thereby benefit from annual
revenue collections from the games.
Currently, Powell said some businesses
in Sacramento pay $200 per year tor
such permits.
Powell attended the December 10
meeting of the CCMA where. he said,
he was offered a seat on the associa-
tion's board. He said he is turning
down that seat to spearhead his own
effort against the tax.
Powell said he is contacting opera-
tors throughout the state in an attempt
to build a base of support, a significant
constituency sufficient to impress the
state legis!ators.
Atari executive Don Osborne has
come out against the tax proposal.
Osborne said the average machine
clears only about S 10 a week after
overhead. repairs. cind other expenses.
He said that, unlike the prices of most
other taxable items. the price of a
video game can not be raised without
making new coin slots tor the thou-
sands of machines already on the
market.
The tax proposal is facing other
obstacles. Governor-elect George
Deukmejian has vowed not to raise
taxes but rather to cut the budget to
alleviate the deficit.
· •
BUFFALO 7
TRIAL
DRAGS ON
Seven arcades in Buffalo remain open
due to a temporary reprieve from a
state Supreme Court judge as their
attorneys prepare tor more battles
with the city's licensing director who
has already ordered the seven shut
down.
Licensing Director Frank Hahn's
decision was issued after undercover
agent Joseph Petronella. a sheriff's
department deputy, testified in court
from behind a screen about arcade
related drug use. Petronella said he
observed what could have been mari-
juana cigarettes being passed and
what might have been alcohol .con-
sumed, arcade attorney Paul Cambria
told Play Meter.
"We got him to admit he saw nothing
different from what he has observed in
theaters or other places people
gather,'' Cambria said.
Cambria's client is Qose Encounters.
It's arcade license was suspended by
Hahn tor three months. The . Quarter
Arcade was served with a 30-day sus-
pension of its license. and Ganci's Gro-
cery was denied its initial license
application. Hahn refused to renew
licenses tor tour other arcades: The
·~
PlAY METER. February 1, 1983