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i••··~····~······························ NEWS NOTES ./ FLORIDA TAX ISSUES BECOME STATE LAW Despite fears of a possible veto, Florida Gov. Lawton Chiles has let stand several measures passed by the legislature to ease the burden on coin machine operators . One such bill abolished non-transferable licensing stickers and clarified operators' tax responsibilities. However, it also raised the per machine license fee from $20 to $30. Also included in the package was language designating location owners as the party responsible for paying gross receipts taxes to the state. Manley Lawson of Lawson Music in Winter Haven, Fla., said the group of street operators (the Florida Amusement Machine Lessors Coalition) formed to pursue these issues will likely disband. "Essentially what we're doing is folding ourselves into the state association FAMAJ," he explained. "It is now time to turn to the broader task of reducing the tax burden on all the parties involved in coin-op machines in Florida." ./ PATENT AND TRADEMARK DISPUTE LINGERS Smart Industries recently responded to claims by Advanced Games and Engineering that it held exclusive rights to the trademarks "play till you win" and "winner every time ," as well as patent rights to crane games having this feature. Smart contends that it has been selling and advertising equipment using this feature and carrying these trademarks for over six years, thus invalidating AGE's claim of exclusive rights. Bruce McKee, patent and trademark counsel for Smart Industries, says that his client's reported prior sale of games beginning in 1989 constitutes a legal barrier to AGE's obtaining protection. A patent must be filed within a year of the first public use or sale of an invention. AGE's patent was reportedly filed in 1993. "The examiner didn't know about our usage " when the patent was granted, McKee said. He added that Smart will petition the patent and trademark office to cancel AGE's registration. The company also reportedly has filed its own application to federally register the slogans for trademark. But AGE questions Smart's claims. "We certainly were not aware of such a product and question its su ccessful marketing," said AGE's J.R. Fishman. "We can prove we were the first on the market with a winnerevery-time candy crane. We have not done anything except announce the patent. I never intended to push the issue, but if they are going to push it, we 'll have to respond. In 1992 there were no other winner-every-time candy cranes at any of the shows. The controversy involved would indicate what an important piece the winner-every-time candy crane is to the market. " ./ NEW COMPANY ON THE BLOCK Phil Cornick has acquired the rights to the coin-op division ofXytek Inc. and opened a new company, P & E Technologies. Cornick is joined by longtime associate Ed Kaba. P & E will continue to offer a comprehensive list of poker and 8-line products, as well as the new Catch-N- Win game that dispenses either a prize or tickets. In addition, it will assume all responsibility for the warranty ofXytek products and the technical support of its customers. Said Cornick: "We have been working toward this goal and looking forward to an opportunity such as this one for a long time. We're excited about what lies ahead and are committed to continuing our reputation for bringing high quality products and innovative ideas to this industry." The company is located at 500 Central Ave., Atlantic Highlands, NJ 07716; (908) 872-9800; FAX (908) 872-0003 . ... ./ NEW HURDLES IN SOUTH DAKOTA Just as a state tax increase on video poker revenues takes effect this month in South Dakota, operators there are fighting new rules passed by the lottery commission that would make it easier for locations to operate their own machines by utilizing the services ofnonlicensed technicians. Previous rules required such locations to employ a licensed technician. Now they can use the services of a certified service agent, a lower standard th an that being met by coin machine operators. "They will not come under the same restrictions that operators and their technicians fall under," said Bob Hartford, executive director of the Music and Vending Association of South Dakota. The association has asked the state legislative rules committee to require the lottery commission to reconsider its decision. Hartford said he believes there is a connection between the tax increase, wh ich will increase the state's take to 50 percent, and the new lottery commission rules. "That's one less partner to divide with," he said. "But by easing the rules you are going to take a very clean industry and open it up to a lot of problems. " ./ LOCAL OPTION IN LOUISIANA DIES Operators in Louisiana were breathing a sigh ofrelief late last month when the legislative session came to a close. A proposal to give communities a local option vote on video poker was effectively killed when the House tabled the measure. Although a proposed compromise would have exempted current video poker operations from the local option, it would have opened the door for voter-approved dockside gaming. ./ WMS, BALLY MERGER AGREEMENT COMPLETED WMS Industries and Bally Gaming International recently announced the execution of a definitive merger agreement in which Bally stockholders will get .55 shares of WMS stock for each share of stock they hold in Bally. The agreement, which must be approved by regulators and the stockholders of both companies, would also require Bally to sell or recapitalize its German operations and distribute the equity of those operations to its stockholders. The boards of both companies believe that the combination of the two companies' domestic gaming machine business should create a powerful competitive force in the gaming market. ./ PREATE PLEADS GUILTY IN PENNSYLVANIA The attorney general of Pennsylvania pleaded guilty last month to a federal mail fraud charge in connection with concealed campaign contributions solicited from illegal video poker operators in that state. As part of the plea agreement, Attorney General Ernest Preate agreed to step down from office. He could face up to five years in prison and $250,000 in fines, according to federal prosecutors. U.S. Attorney David Barasch said Preate, on his own, and through the late Joseph Kovach solicited approximately $40.000 in campaign contributions, half of which were paid in cash . Federal auth orities say the criminal activity first began while Preate was district attorney in Lackawanna County and continued after his 1988 election to the office of attorney general. Efforts to obtain legalization of video poker games have been pursued by legitimate coin machine operators in the state for years. Elimination of illegal operations such as those involved in the Preate case would be a by-product of legalization since video poker machines would be regulated and taxed. PLAY METER 3 JULY 1995