Judge Abrams: Electronic Gambling Machines Legal in St. Mary’s

By Guy Leonard, County Times

HOLLYWOOD, Md. (May 8, 2008)—Electronic gaming machines that outwardly resemble slot machines are legal to operate in St. Mary’s County according to a ruling Friday by Circuit Court Judge Karen Abrams. This decision effectively overturns a ruling issued by the State Attorney General’s Office in March that said the operations of the machines were unlawful and resulted in most of the machines being shut down or removed.

Judge Abrams’ May 2 decision awarded a motion for injunctive relief to a local liquor store owner and two charities who filed a lawsuit against the state of Maryland to have the gaming devices reactivated so that they could continue to reap the proceeds to fund their non-profit activities.

The plaintiffs were The Center for Children, Alternatives for Youth and Families and Bob Sorrells, owner of Fred’s Liquors in Charlotte Hall where about 50 machines operated until mid-March in support of the charities.

While the plaintiffs won their victory it will be short lived; a law passed in the closing hours of the state legislative session in Annapolis outlawed the use of the machines as of July 1.

The ruling also allows other establishments in the county who were operating the gaming devices to plug them back in.

The machines differ from slots, Judge Abrams ruled, in that they use a computer cartridge with a pre-set number of wins in them and not a random number generator as slot machines do.

Therefore, since they do not operate on random chance and a victory is eventually guaranteed, they were lawful.

Gary Kuc, the lawyer from the State Attorney General’s Office said he was disappointed with the ruling but said there were still options open to the state.

The state, which was the defendant in the civil case, called both Sheriff Timothy K. Cameron and State’s Attorney Richard Fritz to the stand to testify on their concerns about the operations of the gaming devices.

Cameron testified that when the attorney general’s opinion came down, it fell to the Vice/Narcotics Unit of the Bureau of Criminal Investigations to look into the legality of the operations to the point where the outfit’s limited resources were deeply strained.

“It derailed their primary focus on narcotics,” Cameron testified, adding that his concerns were not as much over the legality of the machines but over the division of the proceeds.

Fritz testified that his office, which gave an opinion in December that the machines were not slot machines and were therefore legal to operate, had growing concerns about the division of proceeds as the machines began to proliferate.

He was concerned about the “minimal, perhaps negligible, presence” of charity officials during the operation of the machines, which was required by law, Fritz said.

“We became concerned as to whether or not these establishments were becoming integral to the gaming event,” Fritz said. “[Whether] they were collecting most of the money and then giving a pittance to the charities.”

Donna Bennett, executive director for Alternatives for Youth and Families, testified that her organization reaped $30,000 from the machines and that their being shut down in March meant that several projects and programs had to be put on hold.

Sorrells testified that his business got $172,000 in rent from the machines over the several months of their operation.

The vendor, Impact Innovations, of Nevada, got 50 percent of the proceeds.

Cameron said he was happy that the legality of the machines was clarified, but he said concerns still persisted about the division of the proceeds.

“The law was designed for the greater portion [of the proceeds] to go to the charities… now case law shows that some reasonable fees can be charged for material and for rent,’ Cameron said. “But the hearing showed that the smallest percentage went to the charities while Impact [Innovations] gets 50 percent.”

Judge Abrams did not venture into business plans for the machines or how the proceeds would be divided, but she said that either Sorrells or Impact profiting from the machines did not “take away from the fact that the charities are the beneficiaries.”

The ruling came after nearly six hours of court proceedings and one day after investigators with the Bureau of Criminal Investigations, with the FBI field office in Annapolis, raided the ADF Bingo hall in Mechanicsville and seized electronic gaming devices there.

They had been operating since the sheriff’s office had sent out letters in March asking businesses to shut down the machines or risk prosecution.

Lt. Daniel Alioto, head of the Vice/Narcotics Unit, said only that the raid was part of the ongoing investigation into the gaming devices and declined further comment.

During his testimony April 2 on the electronic gaming devices, Cameron revealed further information about the ADF Bingo raid.

“The reason for the raid was not so much the legality of the machines but for the records contained there in,” Cameron said.

It was unclear as of Friday from Judge Abrams ruling whether the slot machines at Fred’s Liquors, of which there were more than 30, would all be allowed to operate throughout the week or just as part of a special one-day event.

Tucker Clagett, attorney for the plaintiffs, said that the machines at the establishment may only be allowed to run five at a time for one charity at a time to comply with the law.

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