STATE OF
THE ATTORNEY GENERAL
Paul Kinsman, Secretary
Department of Revenue and Regulation
OFFICIAL OPINION NO. 08-04
Legality of Quarter Pusher Machines
Dear Secretary Kinsman:
You have requested an opinion from this office regarding the following factual situation.
FACTS:
The Division of Property and Special Taxes administers the amusem*nt device tax under SDCL ch. 10-58.This chapter imposes a registration requirement and a four percent (4%) excise tax on any owner or operator that receives gross receipts from the operation of mechanical or electronic amusem*nt devices.Currently, owners and operators of amusem*nt devices fill out a form that informs the Department of the number of amusem*nt devices they have and pay a per device registration fee.If the appropriate fee is submitted with the form, the Department issues a corresponding number of registration stickers that are to be placed on each amusem*nt device.The identity or type of amusem*nt device is not stated in the filings with the Department.
It has come to the Department's attention that there are various business establishments throughout the State that have coin pusher or quarter pusher machines or devices ("quarter pusher machines").These quarter pusher machines have Department of Revenue amusem*nt device stickers displayed on them pursuant to SDCL 10‑58‑6.The Department is also aware that on occasion quarter pusher machines are available for play at various fairs and carnivals held throughout the State.
All quarter pusher machines operate in a similar manner.A player deposits a quarter into a machine containing other quarters, money and prizes that are randomly located on a shelf or shelves, on the chance that through the machine's operation the player's quarter will dislodge other quarters, money and prizes and start a chain reaction resulting in one or more quarters, money and prizes being dispensed to the player.The player, through the use of a slide or wheel, has some control over where the coin is initially deposited in the machine.Once a quarter is deposited, however, the player has no control over the operation of the quarter pusher machine.He cannot control the movement of the quarter, the movement of the other quarters, money or prizes, if or how they fall, or whether quarters, money or prizes are actually be dispensed to the player as a result of the chain reaction.
Based upon the above facts, you have asked the following question:
QUESTION:
Whether quarter pusher machines are prohibited by the South Dakota Constitution or other
IN RE QUESTION:
Article III, section 25 of the South Dakota Constitution prohibits games of chance except for those constitutionally excepted.Since no applicable exception applies to your opinion request, the pertinent portion of section 25 provides as follows:
The Legislature shall not authorize any game of chance, lottery, or gift enterprise, under any pretense, or for any purpose whatever ....
Mechanical or electronic games of chance are generally prohibited as slot machines under SDCL 22‑25‑13 through 14.1.For purposes of this opinion the relevant provisions include SDCL 22‑25‑13 and 22-25-14.SDCL 22-25-13 provides:
No person may have in his possession, custody, or under his control or permit to be kept in any place under his possession or control, any slot machine or device. A slot machine or device is any machine upon the action of which anything of value is staked and which is operated by placing therein or thereon any coins, checks, slugs, balls, chips, tokens, or other articles, or in any other manner as a result of such operation anything of value is won or lost by the operation of such machine, when the result of such operation is dependent upon chance. This section does not extend to coin-operated nonpayout pin tables and arcade amusem*nts, with free play features. A violation of this section is a Class 1 misdemeanor.
This section does not prohibit the manufacture, or any act appurtenant to the manufacture, of slot machines or devices in this state for distribution and sale.
SDCL 22-25-14 provides:
All slot machines capable of being used for gambling and places where they are kept or operated together with all property of any kind kept or used in connection with operation of the same, are hereby declared to be public nuisances.
This section does not prohibit the manufacture, or any act appurtenant to the manufacture, of slot machines, or devices in this state for distribution and sale.
The South Dakota Supreme Court, in Bayer v. Johnson, 349 N.W.2d 447, 449 (S.D. 1984), defined a "game of chance" for state constitutional purposes as "a contest wherein chance predominates over skill."
Based upon the facts you have provided, it is my opinion that quarter pusher machines are unconstitutional games of chance that also constitute illegal slot machines under SDCL 22-25-13.Under
Given these facts, it is my opinion that chance predominates over skill.Under these circ*mstances, and consistent with the Court's decision in Bayer v. Johnson, these devices are not amusem*nt devices that are subject to registration and taxation pursuant to SDCL ch. 10-58.
In reaching this conclusion, I note that there are three court decisions that have reviewed the legality of quarter pusher machines under various federal and state laws.These decisions, Mississippi Gaming Commission v. Henson, 800 So.2d 110 (
Therefore, the answer to your question is that quarter pusher machines are illegal games of chance and slot machines and not amusem*nt games subject to regulation and tax under SDCL ch.10‑58.
Very truly yours,
ATTORNEY GENERAL
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I am an expert well-versed in legal matters, particularly those related to state laws and constitutional provisions. My expertise lies in analyzing and interpreting legal opinions, statutes, and court decisions. I have a deep understanding of the legal framework and can provide insights into the implications of various legal issues.
Now, let's delve into the concepts used in the article from the State of South Dakota Office of the Attorney General dated April 30, 2008:
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Amusem*nt Device Tax (SDCL ch. 10-58): The article refers to the Division of Property and Special Taxes administering the amusem*nt device tax under South Dakota Codified Laws (SDCL) chapter 10-58. This chapter imposes a registration requirement and a 4% excise tax on owners or operators receiving gross receipts from the operation of mechanical or electronic amusem*nt devices.
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Quarter Pusher Machines: These are described as coin-operated devices where players deposit quarters into a machine containing other quarters, money, and prizes. The machine's operation is intended to dislodge other quarters, money, and prizes through a chain reaction. Notably, the player has limited control over the initial deposit but no control over subsequent operations.
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South Dakota Constitution, Article III, Section 25: This constitutional provision prohibits games of chance, lotteries, or gift enterprises unless constitutionally excepted. The Attorney General relies on this provision to assess the legality of quarter pusher machines.
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Slot Machines (SDCL 22-25-13 and 22-25-14): The article cites South Dakota Codified Laws sections 22-25-13 and 22-25-14, which define and regulate slot machines. SDCL 22-25-13 prohibits the possession or operation of slot machines unless explicitly allowed, and SDCL 22-25-14 declares slot machines and places where they are operated as public nuisances.
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Definition of "Game of Chance": The South Dakota Supreme Court, in Bayer v. Johnson (349 N.W.2d 447, 1984), defined a "game of chance" for constitutional purposes as "a contest wherein chance predominates over skill."
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Legal Opinion (Official Opinion No. 08-04): The Attorney General's opinion concludes that quarter pusher machines are unconstitutional games of chance and illegal slot machines under SDCL 22-25-13. The opinion argues that the machines involve something of value being staked and won or lost predominantly based on chance, rather than skill.
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Comparison with Court Decisions: The opinion references three court decisions (Mississippi Gaming Commission v. Henson, State v. Maillard, and United States v. Two (2) Quarter Fall Machines) that reached the conclusion that quarter pusher machines were illegal, emphasizing the lack of skill involved in their operation.
In summary, the article addresses the legality of quarter pusher machines in South Dakota, analyzing relevant constitutional provisions, statutes, and court decisions to conclude that these machines are considered illegal games of chance and slot machines under South Dakota law.