You might at this point well ask why the outdoor show business, as it is conducted, is in any wise interested in or why it should be opposed to H. R. 6736 or Senate bill 3357. I trust that the following will properly set forth our position. Although none of my clients, nor any one else engaged in the outdoor show business, is engaged in or connected with organized or commercial gambling, nor do they own or operate so-called slot machines on any part of their business, the concessions which are operated by them might, because of the wording of the proposed legislation, be construed as gambling devices as defined in the bills under consideration by your committee. A number of these concessions, which have been used at fairs and celebrations for decades, and with which you are undoubtedly familiar, are machines, or mechanical devices, not, in the language of the bills "designed or adapted for gambling," but might at some time, under a strict interpretation of the definition, be considered designed for "any use by which the user as a result of the application of any element of chance may become entitled to receive, directly or indirectly, anything of value." Some of the concessions referred to consist of the following: Fish pond: Where the public hooks an artificial fish out of a small pond, and receives a merchandise prize indicated by the number on the fish. Merchandise wheels: Where the holder of the number corresponding to the number at which a spinning wheel comes to rest, receives a merchandise prize. Rabbit game: Where the public by bouncing a rubber ball into a receptacle causes an imitation rabbit to advance up an incline and the person whose rabbit first reaches the top is entitled to a merchandise prize. Hoop game: Where the patron tosses hoops over the various pieces of merchandise located in the center of the enclosure and is entitled to the merchandise so encircled (the old game of “The cane you ring is the cane you win”). Bingo games with which you are all undoubtedly familiar. Also other similar concessions of the same general nature. To show how the law, as now written would apply to two of the above games, I submit the following: Fish pond: In this concession there are imitation fish floating around in water agitated by a motor. The player pays 10 cents to catch one of the fish with a hook on a small pole. This equipment is used so that the game is more attractive and entertaining to the public. On the bottom of the fish is a number, which entitles the player to a designated piece of merchandise. Element of chance-mechanical device-article of value received-under present wording is "gambling device"-2 years in jail. Now instead of fish in water agitated by motion, use paper cut in form of fish. Player pays 10 cents for privilege of picking up one fish from a table on which the fish are placed. Same number-same prize-same player-same 10 centssame element of chance-no mechanical device, so no violation. Bingo: Numbers are printed on celluloid balls in container which blows balls in air and operator selects one at a time. This device is used to insure the public that the operator has no chance to draw any desired number-player pays 10 cents per card-gets Bingo-receives doll-element of chance-article of value received-mechanical device-violation-2 years in jail. Now numbers are written on pieces of paper and placed in hat and withdrawn by operator. Same player-same 10 cents-same winning card-same prizesame element of chance-no mechanical device, so no violation. The firms manufacturing the merchandise so given away as prizes do a volume of business with the outdoor show operators running into millions of dollars each year, all of which would be lost if these concessions were not allowed to operate. The show owner pays sales taxes or occupational taxes on all such merchandise so distributed in the States where such taxes are in effect. Many of the concessions described, consist of machines, or mechanical devices, and we must admit that the player, as a result of some element of chance may become entitled to receive an article of merchandise, which is a thing of value. Also, because of the nature of the outdoor show business, these concessions must necessarily be transported from State to State. Therefore, under the present wording of the proposed legislation, the concession operator, the show owner, the State or county fair board, the American Legion, the labor organization, the chamber of commerce, the church, or the sponsoring unit, could all be charged with a violation of this law and be subject to fine or imprisonment. To strictly comply with the law as now written, all these concessions, which have been operated in this country for decades, and which have become a part and parcel of the State fair, county fair, or other celebration enjoyed by the public, would have to be discontinued, and, as we have pointed out before, without them the outdoor show business cannot operate, and millions of dollars would be lost to business firms, wage earners, fairs, veterans' committees, and the others. Surely this is not the intent of this legislation. The foregoing may be lengthy and redundant but do you really think that the outdoor show business is any part of or connected with organized or commercial gambling? Should its activities, as above outlined, be stopped entirely or curtailed by this legislaton? We respectfully state that such certainly is not the intention of Congress. In all publicity, in all statements made by Members of Congress, and by this committee itself, this legislation is referred to as the slot-machine law. We submit that it should be so worded that it pertains to slot machines, and does not include the legitimate operation of the outdoor show business. In this connection, we call the attention of this committee to the wording of the definition of "gambling devices" in the Internal Revenue Code pursuant to which the Government collects a tax on slot machines. This wording is as follows: "UNITED STATES INTERNAL REVENUE CODE, SECTION 3267 "b. Definition: * * * (2) so-called slot machines which operate by means of insertion of a coin, token, or similar object and which, by application of the element of chance, may deliver, or entitle the person playing or operating the machine to receive cash, premiums, merchandise, or tokens.” We also call attention to a portion of the analysis of the provisions of the bill, submitted to the Senate committee when it was considering Senate bill 3357. ANALYSIS OF THE PROVISIONS OF THE BILL "Section 1: This section defines 'gambling device.' A definition would probably have been unnecessary if the problem were limited only to describing a machine or mechanical device (or parts thereof, because they may be shipped unassembled or as parts for replacement or repair), 'designed or adapted for gambling.' The meaning of 'gambling' is well understood in every jurisdiction, and no definition of it is required. However, there are a number of types of the coin-operated machines which incorporate, along with the gambling, some element of skill or return of fixed value which in the past has been argued as distinguishing them from outright gambling machines. The States have usually rejected such evasions in court decisions or by statutes drawn to meet the situations. Accordingly, the definition has been expanded along the lines of the prohibitions made by the States, incorporating the basic distinguishing element that differentiates gambling devices from legitimate vending machines, namely, the application of any element of chance in their use by which the user may become entitled to receive anything of value. (Cf. Federal tax statute relating to slot machines, 26 U. S. C. 3267 (b).) By this comprehensive definition a rather simple means of evasion otherwise afforded to manufacturers and dealers in gambling machines is greatly reduced if not eliminated. "It is of course clear that ordinary vending machines and music boxes are not within the scope of the definition or the intendment of the statute." You will notice that in both the section of the Code and the analysis, reference is made to "coin-operated machines," and we submit that the intention of Congress is and should be to limit this proposed legislation specifically to slot machines. In the analysis, the point is made that the definition has been expanded to include the application of "any element of chance," instead of "the element of chance," as stated in section 3267 of the Code. This all could be accomplished by defining "gambling devices" in this legislation the same as defined in said section 3267 but by changing the words "the element of chance" to "any element of chance" as suggested in the analysis. By doing this, we are convinced that the real purpose of the proposed legislation would be accomplished, and the outdoor show business and other businesses that might be brought under the present wording of the proposed legislation would not be put out of business or unduly hampered. We respectfully request that the foregoing or other suitable changes be made in this bill so that it will refer to slot machines and organized or commercial gambling, and will not prohibit the farmer or his wife from attending the State fair, legion carnival, or church bazaar, paying 25 or 50 cents for the thrill of trying for a blanket or a toy panda to bring home to the children. Respectfully submitted. Figures obtained from the Billboard magazine, based on a current survey made by that publication. The figures are approximate, but believed to be substantially accurate. Fairs (State, county, and local)_ Attendance at fairs per year. Amusement parks (with concessions) Attendance per year-- Investment in equipment_ Carnivals: Traveling on own railroad cars (over 400 cars). Traveling on own trucks, tractors, and trailers- Total investment in equipment (not including merchandise). Number of wage-earning employees. 2,500 70, 000, 000 700 100, 000, 000 $50, 000, 000 11 285 10,000 $30, 000, 000 100, 000, 000 Circuses: Number Concession operators- Number of persons patronizing concessions (including repeated patronage) 35 3,500 10,000 200, 000, 000 Mr. BYE. I state that I represent the Railroad Show Owners Association and others. That association consists of nine owners and operators of carnivals and midways that travel on railroads. They own their own railroad cars and equipment, and they own over 400 railroad cars and have perhaps 10 or 15 million dollars invested in their equipment. In addition, there are in the country about 285 so-called truckoperated carnivals, or approximately 300 operating in the United States. Carnivals have been operated in the United States for over 100 years. They started back in the days of the Roman Empire and they have come down through history ever since. Undoubtedly all of you gentlemen have attended your State fair and your county fair or some Legion convention or labor meeting or church bazaar where the carnival held forth. In addition, I have letter and we represent the Pacific Coast Showmen's Association of Los Angeles. That is an association of outdoor showmen. They are carnival owners and concession operators and others interested in the show business. They have over 1,000 members. Also George A. Hamid & Sons, of New York City, they are general amusements and the ones that operate the Atlantic Pier at Atlantic City. The O'Henry Tent & Awning Co., of Chicago, manufacturers of tent and other canvas goods, all of which is used in the outdoor show business, is another one. We have the Lewis Diesel Engine Co., of Memphis, Tenn., that represent merchandise and equipment sold to carnivals, fairs, and other celebrations. Another is the M. A. Singer Co., of Dallas, Tex., also wholesalers of general merchandise sold to the fairs, carnivals, and other Legion conventions and things of that kind. Clemens F. Schmitz, broker, of New York City, who handles perhaps $100,000 in insurance of this class of amusement. The Showmens League of America, at Chicago, has over 2,000 members and belong to this industry. B. Palmer Sales Co., of Dallas, Tex., manufacturers of merchandise. The Midwest Merchandise Co., at Kansas City, Md., also is selling merchandise. The Downey Supply Co., of St. Louis, Mo., sells light towers in the hundreds of thousands of dollars that go on these carnivals. Mr. BECKWORTH. What is the nature of these letters, Mr. Bye? Mr. BYE. If the committee please, I would be glad to leave them with the committee not as a part of the record unless the committee desires to have them. I didn't want to take the time to read all of these but I am trying to show the universality and the extent of this outdoor amusement business. Mr. BECKWORTH. Are they letters to you? Mr. BYE. Yes; asking me to represent them at the hearing and voicing the objections to Senate bill No. 3357 as written. We want to qualify, everything I say, on our objection that we do not object to the bill but we do as written. Mr. BECKWORTH. They are letters which substantiate the position that you are taking with reference to the legislation. Mr. BYE. And giving their reasons why, yes. There is another one from United States Tent & Awning Co., at Chicago, Ill., manufacturers of tents. The National Showmen's Association of New York which has over 1,000 or 1,500 members. Casey Concession Co., at Chicago. Arthur E. Campfield, Inc., of New York City, also manufacturers of tents and canvas equipment. I merely show those to show that the interest is there. Now, my clients and those that I represent do not manufacture any machines. We don't sell any machines so it is different than the approach made by the witnesses that I have heard testify here before. We do use machines and the way this bill is worded there is practically no doubt that it would drive the outdoor show business out of business. These carnivals show at State fairs, county fairs, American Legion conventions, and fund-raising activities of the American Legion, police-department benefits, fire-department benefits, labor organizations, all other veterans associations and for churches. At all of these you will have to admit that there are machines and mechanical devices that probably would come under the definition of that law. If passed as it is worded, they would be prohibited. These carnivals also, of course, operate shows and rides and I think that you are all familiar perhaps with a carnival and a midway on a State fair. There are hundreds of thousands of people employed directly or indirectly in this industry, and every midway and every fair that you have ever seen that has been held, there have always been concessions. As a matter of fact, a carnival company, either truck or railroad, could not exist and continue in business without the revenue derived from concessions. That has been a custom and that is as American now as apple pie or butter and eggs or anything else. Now, may I ask the members of the committee a question? Mr. HARRIS. You may ask, but I am not sure that we will answer it. Mr. BECK WORTH. I might say that naturally the purpose of the hearing is for a person to come to make a statement to the committee, and to make any statement that he desires to make and to obtain the information that we can which might be given by those who want to be heard. You may ask the question. Mr. BYE. What I was going to ask of the members of the committee if there are any members of the committee who never in their youth or now or expect later, have never attended a State or county fair and have never patronized the shows, rides, and concessions, and if there are any such that never have I would like to know it and otherwise I will proceed assuming that you know what I am talking about. Mr. BECKWORTH. I would assume that each of us has been to fairs and shows, yes. Mr. BYE. Now, at these fairs, you are familiar with the general class of concessions. There are wheels, there are fish ponds, there are bingo games and high strikers, guess-your-weight devices and I think it would be covered by the wording of this bill. I think that we are getting far afield here. The purpose of this bill and this whole legislation, as I understand, was what we have been calling one-armed bandits. We don't have any and we are not connected with that business in any manner. We do sell merchandise by concessions. And we will admit that. If you ask me, if they are gambling devices, which someone probably will, I don't know. I can show you 100 or 200 State decisions, local holdings where some of the concessions are and some of them are not. The great majority of these are not because they do not pay off in money, they pay off in merchandise. That is why these merchandise manufacturers are interested in this legislation because they sell millions of dollars a year that is finally turned out to the public in the form of prizes. The average amount spent by the public and incidentally I called attention to the exhibit attached to my objections that shows the public attendance at these fairs, and the amount spent by them and the amusement that they derive from this. The usual charge is 10 or 25 cents. The average figures of my client show less than $1 average for the farmer and his wife that goes to the State fair or the county fair or for the American Legion man and in every case either the State fair board or the county fair board or the American Legion or the church derives a portion of that revenue. When I go to a carnival or to the American Legion or anybody the public goes, and puts up 10 cents to catch a fish with a small pole, because that makes it look more attractive and more people will play it, and that is agitated by a motor; that is a mechanical device. Under this we can go to jail for 2 years then including the Legion committee and the State fair board, I think. They pay that, and they don't expect to get a $2 or $2.50 blanket for 10 cents. They know that is not a business transaction and anybody that is not foolish would know that. They know there is an element of chance in it. One hundred million people that attend these every year know that. They do it for the fun and the amusement. The farmer at the State fair, those are held in the fall and he is out there to get a good time. If he spends $5 or $6 letting his children have fun and he brings home a panda doll, he enjoys it and I don't think that that is gambling. It certainly isn't any great syndicate of hoodlums that we have been reading about that take $2,000,000,000 worth of somebody's money They go there to have a good time; if they spent $5 or $10 they think it is well worth while and the fair board gets the return. |