State says Electronic Puzzle Machines that Pay Cash are Slot Machines, Must go

How many times have state governments passed laws that accidentally did more or less than the drafting legislators intended? More times than anyone can count, I’m sure, like when Florida flubbed on a prohibition of internet gambling cafes that technically made it illegal to use a computer in the state – oops! Now Washington is crying foul on a bill that legalized electronic puzzle machines they say are more similar to slots than intended.

Voters have been pretty adamant that they do not favor an expansion of gambling in the state. In 2004, 61.55% voted against Initiative 892, the Washington Non-Tribal Gambling Establishment Act, a referendum that would have done just that. As of right now, the only legal form of casino gambling takes place at tribal-owned casinos, per federal law.

In 2015, state officials decided to adopt new rules that would allow for electronic puzzle games to be installed at bars. Patrons 21 and older can insert money into the machines to play the games, and if they perform well enough, will receive a prize. However, the prizes were intended to be either merchandise or coupons/tickets exchangeable for merchandise.

While the law specified that the games “must not award additional plays as prizes”, and listed a range of prizes that could be awarded, it failed to explicitly prohibit cash payouts. As such, some businesses have been paying winnings to customers in cash, causing lawmakers to slap their foreheads in dismay.

Chris Stearns is the Chairman and 1 of 5 voting members of the Washington State Gambling Commission. “I’d say we weren’t fully aware of what exactly we had bought into,” said Stearns at a meeting in February; a sentiment reciprocated by two other members of the commission.

Giving players of the electronic puzzle machines the ability to take home a cash prize, Stearn said, “that was just not part of any conversation we had,” when drafting and approving rules for the new amusement games. He said they might as well be slot machines, which are strictly prohibited by state law.

There are currently about 200 electronic puzzle machines located throughout 80 licensed businesses in Washington. Advocates for the current amusement game laws argue that monetary payouts are perfectly legal, and while Stearns doesn’t dispute that argument outright, he did call it “a gray area” of legislative context.

Officials will gather in Olympia on Thursday, April 14, where the Gambling Commission will discuss the matter of possibly repealing, or at least altering, the laws governing electronic puzzle games. But it could be an uphill battle as proponents of the devices – especially businesses that they say will lose as much as $9 million if the machines become outlawed – are prepared to fight tooth and nail to keep the current legislation intact.

Already, a group of gaming advocates have filed litigation against the state to prevent a repeal or amendment to the new game rules, seeking $15 million if the state goes ahead with either plan.

Another group, the Washington Amusement Machine Operators Association (WAMOA), is pushing for simple amendments to halt cash payouts, preferring to keep the electronic puzzle machines installed under the rules that were originally intended by lawmakers.

Ezra Eickmeyer, a lobbyist for WAMOA, agrees with Stearn that the reception of payouts in cash form “is getting too close to operating like a slot machine.”

State Rep. Chris Hurst [D-Enumclaw] is on the far side of the fence, arguing that the law should be repealed in its entirety. He also believes a temporary repeal should be invoked “until the Legislature makes a decision.”

Rep. Hurst is concerned that the state will eventually mimic Georgia, where slot machines are illegal, but amusement games similar to those in Washington now amount to over 22,000 in approximately 5,000 business locations.