Amusement game fued moves to federal court

Jack Elliott Jr

Monday, April 29, 2002 | 9:58 a.m.

JACKSON, Miss. -- The long running feud between amusement companies and gambling regulators has entered a new arena -- the federal courts.

A&A Amusements Inc. has filed a lawsuit in U.S. District Court in Greenville challenging Mississippi's law on illegal gambling devices. In response, the Mississippi Gaming Commission has filed a motion to have the case dismissed.

No hearing date has been set, according to the federal court clerk's office.

Greenville-based A&A Amusements contends state law is unconstitutional and makes illegal video games that might be lawful in any other circumstances. The company wants the state barred from enforcing the law until a ruling is made.

William Fulwood, the company's owner, could not be reached for comment. He argues in court papers that bingo halls are allowed to operate video games, which are similar to what he and other companies offer.

Bingo is legal in Mississippi and is regulated by the Gaming Commission.

Greenville attorney Eric Charles Hawkins, representing Fulwood, said the law allows the state to seize and destroy the devices without notification to the owner.

"I understand that state courts have previously ruled on some of these matters," Hawkins said in a letter to the Gaming Commission. "However, I feel an interpretation of these particular statutes by a federal court, given the constitutional implications, may put this matter to rest once and for all.

Hawkins did not return telephone calls to The Associated Press.

Gaming Commission officials declined to comment on the lawsuit, other than for what is in their motion for dismissal.

In that motion, Assistant Attorney General Joel R. Jones said the commission is protected from the lawsuit under sovereign immunity.

The U.S. Supreme Court has ruled states, in absence of consent, are immune from suits brought against them by their own citizens under the 11th Amendment to the Constitution. Jones said a federal appeals court ruled the same immunity extends to administrative agencies of a state.

The Gaming Commission's crackdown on gaming devices located away from licensed casinos has prompted several Mississippi Supreme Court decisions that found such machines illegal under existing law. The machines have been found in truck stops, bars, convenience stores and gas stations around Mississippi, regulators said.

In the most recent case last September, the Supreme Court held that amusement machines that dispense something of value upon the insertion of a coin are illegal slot machines.

The justices said the issue of payoff under state law is not limited to tokens and coins. They said there was no practical difference between a credit awarded to a player and a token dispensed from a machine.

"The award of tokens is a payoff regardless of whether the tokens are redeemable for cash, merchandise or for additional plays of the machine," the court said.

It said the award of credits to play free additional games "is likewise something of value, as a credit to play a free game necessarily has the same value as the amount it would cost to play that game."

Because the machines required consideration, had an element of chance and returned a thing of value, they are considered illegal gambling devices, the court held.

The machines in question are marketed under several names -- Cherry Master Eight Liner, Quarter Pusher, Lucky Shamrock.

On most machines, the display simulates a slot machine by spinning squares. After a few moments, the display shows a combination of squares. The machine awards credits based on matching combinations.

The Gaming Commission says it has found establishments that pay off in cash for winning combinations and that is illegal.

The 2002 Legislature rejected a proposal by the Chuck E. Cheese's pizza parlor/kids arcade chain to amend state law to make their games legal. The legislation would have legalized arcade games as long as the coupons dispensed could be redeemed for merchandise with a wholesale value of $40 or less.