LETTER TO '60 MINUTES'
Editor's Note : Rufus King, Play
Meter /ega/ counsel, wrote this
reply about the video-poker seg-
ment to Don Hewitt, "60 Minutes"
executive producer. In the preface
to his reply, King 1 wrote: "It was a
great segment, but it missed two
critical points, and among those
who know, It may be doing as much
harm as good." King also enclosed a
listing of federal statutes and cita-
tions.
Your fine piece exposing the $2
billion poker-video gambling racket
illuminated a dark underworld
corner where no one has been
looking. Congratulations!
But there was one error : Congress
long ago passed federal laws to assist
state anti-gambling enforcement,
recognizing that, just as you demon-
strated, local officials can't and
won't stand up to the illegal gam-
bling promoters. There have been a
few federal cases , but if the Depart-
ment of Justice threw the book at
the illegal operators you pictured,
and got one conviction under each
federal law which refers directly to
gambling, maximum fines would
total $80,000 and the maximum pri-
son sentences would add up to 37
years.
The trouble-and a main reason
for the growth of the problem-is
that the present administration
seems to be deregulating organized
crime along with everything else.
And you missed one crucial fact:
the gamblers claim their devices are
exactly like amusement games, and
it is only the player and the bar-
tender who make illegal payoffs.
The fact is that all the gambling
devices have a secret circuit, built
into them , to record payoffs so the
machine owner can reimburse the
bartender or whoever pays off. They
must have this. Otherwise it would
be an "honor" system as to how
much was paid. Anyone who knows
what to look for can tell an innocent
amusement game from a payoff
device as easily as he could spot
Lugers among water pistols.
johnson-Eastland Act , (interstate
shipment of gambling devices to
areas where they are illegal)
(1962) : $5,000 and 2 years.
Interstate Travel Act , 18 U.S.C. 1953
(1961): $10 ,000 and 5 years.
Illegal Gambling Business Act , 18
U .S.C. 1955 (1970): $20,000 and 5
years .
Racketeer Influenced and Corrupt
Organization Act, 18 U .S.C. 1961-8
(1970): $25,000 and 20 years,plus
forfeiture of all gambling-con -
nected assets.
Obstruction of Anti-Gambling Law
Enforcement , 18 U.S.C. 1511 (1970) :
$20,000 and 5 years.
NCMI RESPONDS TO REPORT
In a letter to Don Hewitt, "60
Minutes" executive producer ,
Herbert M . Beitel, NCMI 's man-
aging director , challenged the
report's claims concerning then um-
ber of machines being operated
illegally and gross revenues.
In citing statistics concerning the
number of video games on location
and their revenues, Beitel said "We
find no real evidence to support
your projection that there are over
100,000 machines operating illegally
and even less support for your esti-
mate of nearly $2 billion in illicit
revenues. This is an unfortunate
exaggeration that only makes the
i ndustry fight against these opera-
tions all the more difficult," Beitel
added .
" 60 Minutes" stated that its pro-
jections are based on estimates by
New York state officials that there
are 30 ,000 illegal machines in that
state grossing more than $750
million annually. " These estimates
are only guesses sefi'Tlingly designed
more to capture ';nedia attention
PlAY METER. March 15, 1964
than a realistic assessm -.:nt of the
basic problem," NCMI stated.
In the letter, NCMI stated that the
program's report" ... set the stage for
a public preception that is not sup-
ported in fact . The overwhelming
majority of established amusement
vending operators are opposed to
such unlawful activit ies. They are
alarmed at the sudden invasion of
these activities, most often by new
operating companies searching fast
profits without regard to the risk or
ethics involved. Family amusement
centers and arcades featuring video
games would commit business
suicide by incorporating gambling
activities in their operations."
The letter also stated that coin-
operated video games have not
replaced pinball games, as the
report asserted. Pinba lls, in fact, are
experiencing a resurgence as the
popularity of video games wanes,
NQvtl said .
Beitel also said that NCMI , a
national organization of operator
companies, has been fighting these
illegal operations because it recog-
nizes the potential problems of cor-
ruption , violence, and organized
crime infiltration that could flow
from them .
NCMI agreed with the " 60
Minutes" evaluation that the mud-
dled state of the laws and court
decisions and erratic enforcement
activities make the problem worse .
The letter deplored the reaction in
some areas of lumping all coin-
operated amusement devices to-
gether as " throwing out the baby
with the bath water. "
The letter concluded with-" The
amusement vending industry fought
through a very similar siege with the
explosive emergence of pinball
games in the 1930s. The industry was
stifled with a flood of punitive legis-
lation and bad public relations. It
has taken 40 years for the industry to
recover. The established amusement
vending industry is fighting any
repeat of that destructive era ."
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