Mr. PICKERING. I presume it would depend on what you consider their income.

Mr. BECKWORTH. I am talking about generally, what does a machine as you have referred to it, say at the airports, what does it usually cost?

Mr. PICKERING. I believe the retail value is somewhere in the neighborhood of $200, and I think in some cases it goes to $225, and once in a while $250, but I think that that would be absolutely the tops. I think an average is somewhere around $225 and $250. That is the retail price.

Mr. GRANAHAN. Do you feel that punchboards are included, Mr. Pickering, in this proposed legislation?

Mr. PICKERING. I am not a lawyer, but reading the language as a layman, I don't see it here.

Mr. GRANAHAN. Does any member of your association manufacture punchboards?

Mr. PICKERING. Indeed not. There are coin-operated punchboards, by the way, but they are not members of this association.

Mr. WOLVERTON. Mr. Chairman, I have an observation I would like to make. It would seem to me from the way that this hearing has gone that the real difficulty comes in arriving at what you might from an honest standpoint consider games of chance or games of amusement. It is conceivable from the questions that have been asked that even the most innocently designed machine can be the subject of gambling depending upon the desire of the individuals who may be playing.

Just as an indication of how innocent we can all be in these matters, it came to my attention yesterday-and this practice I don't think comes within the language of this bill, but merely illustrating the innocence that can be played upon under some conditions-I heard someone say, that a book was being made on how many Members of Congress would answer the roll call.

Mr. PICKERING. I would not doubt it.

Mr. WOLVERTON. It just goes to illustrate how easy it is to make innocent people, or innocent machines-in one case Members of Congress and in the other case the machine-into gambling machines or gambling devices. I can see why the Senate may not have held any hearings on this bill. They passed the bill without any hearing and they saved themselves all of these differentiations that have been drawn here, and they saved themselves from being looked upon, as a result of their questions, with a degree of suspicion as to their knowledge of gambling devices.

Mr. WILSON. Mr. Chairman, I would like to ask Mr. Pickering some questions. In your statement you say that some years ago your association expelled from your membership some of your members, and I understand that you will include the list of your present membership by name. You say you did expel one of your members for the purpose of cleaning up your association?

Mr. PICKERING. Yes; our own industry. As I said in my statement, we think it is a civic duty to establish high standards of conduct for an industry.

Mr. WILSON. How many did you expel?

Mr. PICKERING. I was not there at the time this was done. There may have been half a dozen.

Mr. WILSON. Were they all manufacturing coin-operated devices? Mr. PICKERING. Yes, sir.

Mr. WILSON. Gambling devices as you describe them?

Mr. PICKERING. Yes, sir.

Mr. WILSON. They were manufacturers of gambling devices?
Mr. PICKERING. Yes.

Mr. WILSON. In the next paragraph of your statement, Mr. Pickering, on page 2, you state that, just like all of the rest of the people in this room and the members of the committee, you are citizens of the community, and I appreciate that. You are doing something as an industry about cleaning this situation up. What are you doing? That is, other than the expelling of manufacturers who do manufacture gambling devices?

Mr. PICKERING. Well, for instance, this is a highly technical industry, and we have been asked by legislators to give them some help in passing certain legislation. For instance, California had a special session to deal with gambling devices, and it was called by the Governor, and we were asked specifically to support that legislation with anti-slot-machine legislation, because the California law, they felt, was not strong enough to deal with their own situation. We supported it by letter to the committees, and that is a matter of public record. We did the same thing in the Legislature of Florida. We opposed that legislation. That was a matter of opposing legislation at the request of our members, and we were asked for help by some of the legislators who did not understand the technicalities of this business. We supported that with both letters and telegrams to the committees which were considering the bills. That has been part of the program.

We realize that we cannot very well say that we are opposed to this and then when people come along refuse to give them any help. Otherwise, we would not be discharging our obligations to ourselves. Mr. WILSON. Now, in answer to the question I just put to you as to what you are doing, I sum up that you have been furnishing advice in the way of legislation just as you are doing today?

Mr. PICKERING. Yes; just the same thing.

Mr. WILSON. Now, you have presented in your statement in so many words an addition, by way of amendment, to section 1 of the bill, which would be an exemption of a class, including pinballs?

Mr. PICKERING. That is correct. We call them amusement games. Mr. WILSON. I want to ask you the precise question and I would like to have the answer from your counsel who is seated at your side, if you cannot answer it. In the case of this proposed amendment, would it be clear to exempt or would it include in the definition of "gambling device" those machines or those instruments that pay off by way of a free game?

Mr. PICKERING. I would rather have our counsel answer that. That is a highly technical matter.

Mr. WILSON. I ask it precisely because in some cases, or in some States, I am informed, the rulings of the courts are that where there is a free game it is a gambling device in so-called amusement machines. Can I have the answer from your counsel ?

STATEMENT OF DUDLEY C. RUTTENBERG, GENERAL COUNSEL TO THE COIN MACHINE INSTITUTE, CHICAGO, ILL.

Mr. RUTTENBERG. Yes; I will answer that, sir. My name is Dudley C. Ruttenberg, and I am here in the capacity of attorney for the Coin Machine Institute.

Mr. BECKWORTH. Would you give your address?

Mr. RUTTENBERG. It is 134 North La Salle Street, Chicago.

Within the States themselves a free play has been held to be a thing of value in some States and not a thing of value in others. In most of the States the free-play pinball machines that you have referred to, sir, are legal. In fact, the legislation that came out of California just the other day, and signed by Governor Warren, which is the last word in State slot-machine legislation, expressly provides that pinball machines with the free-play attachment shall not be included in the definition of "illegal slot machine." There are some State supreme courts and a very few State legislatures which have outlawed the free-play device.

However, I believe that the Justice Department, in drafting this bill and this definition, did not include the free-play device for this reason, forgetting about our proposed language: They use the term "anything of value"; and then the question arises as to whether a free play is a thing of value. All of the Federal courts that have decided that issue have said "No; when you win a free play, you do not win anything of value." The highest court that decided that was the Circuit Court of Appeals for the District of Columbia in interpreting the Antigambling Code of the District.

The question arose whether the pinball machine with a free-play attachment, which is used so widely here in the District, was a gambling device, and whether the player won anything when he won the right to replay the machine, and the district court of appeals said, "No; it is nothing of value, as you cannot dispose of it, and it is not. property within the law."

I believe the Justice Department when they drafted this did not intend to include the free play.

Mr. BECKWORTH. Do a good many of the machines manufactured by the members of your institute award free plays?

Mr. RUTTENBERG. There are a good many that do, and there are a good many that do not. The pinball machine is the one that uses the free play mostly. There are other types. There was a quizzer machine that asked you questions at the airport the other day.

Mr. HESELTON. Do you happen to have the citation in that circuitcourt case available?

Mr. RUTTENBERG. Yes; I do, sir. The citation of that case is 142 Federal 2d 97, and the name of the case is Washington Coin Machine Association against Callahan.

Mr. HESELTON. Thank you.

Mr. RUTTENBERG. I can give you the other Federal citations if you would like them.

Mr. HESELTON. No. I can locate them.

Mr. WILSON. What is the name of the case?

Mr. RUTTENBERG. Washington Coin Machine Association against Callahan.

Mr. WILSON. That is a District case?

Mr. RUTTENBERG. It is a circuit court of appeals case growing out of the District.

Mr. WILSON. Now, may you resume there? You have made your observations as to the definition as it is presently included in the Senate bill, but my precise question was: Will it be clear from your proposed amendment that an amusement game would not be a gambling device within the terms of the definition?

Mr. RUTTENBERG. If it had a free-play attachment, I believe it. would be clear, because the only thing that would cover the free play would be "anything of value," and under the Federal law today it is unanimous that a free play is not anything of value.

Now, this law will be interpreted according to Federal law and not according to State law.

Mr. WILSON. Would you be basing it upon the interpretation of the Federal district and the Federal circuit courts up to date, rather than any State interpretations, within the States where there are States of the Union that have declared it to be a gambling device.

Mr. RUTTENBERG. That is my interpretation.

Mr. WILSON. That would be your only answer as to the clarity of it, because you look into the future, and based on an interpretation of this one circuit case, together with other Federal district cases.

Mr. RUTTENBERG. If a Federal court were to decide the other way, this would mean something else.

Mr. WILSON. And it would probably mean a free game amusement device would be a gambling device.

Mr. RUTTENBERG. If the court said that, yes, sir.

Now, I would like to say this: In addition to the Federal law, this bill as it passed the Senate was designed to help the States enforce their basic policy against slot machines. Now, as my colleague pointed out, there is one State in the Union where almost any kind of coin-operated or non-coin-operated amusement machine is illegal-North Carolina, where they provide any game, whether coinoperated or not, is a gambling slot machine if it tallies a score, and our little pistol games cannot be operated there. There are a few jurisdictions where the free play is held to be a thing of value, but this year three of those States have changed their interpretation by legislation. We think the trend is in this direction.

Mr. WILSON. May I point out to you section 2 of S. 3557, which, as you know, includes a proposed certification by the Governor of my own particular State or your State. If this becomes law, then the Governor must look to some law, either State or Federal, to hang his hat upon to make that certification.

Mr. RUTTENBERG. That is right, sir.

Mr. WILSON. If he looks to the interpretations of his own State law, then is not there a loophole as to whether or not an amusement device with a free game would be a gambling device or not?

Mr. RUTTENBERG. I believe he would have to look at the Federal definition and reconcile it with his own definition, even though it were a gambling device in his own State; and if it were not included within the scope of the Federal definition, he would not have to certify it, because it was not intended to be covered by the Federal Government as a gambling device.

Mr. WILSON. He would be rather under a dilemma.

Mr. RUTTENBERG. I do not believe there would be a dilemma, sir. First, he must determine from the Federal language what is a gambling device as defined by the Congress. After he made that determination and that some legal machine in his own State was covered, then he would be required or he would make the certification to the Attorney General's department. That is the way I read it, and I may be wrong, sir.

Mr. BENNETT. On page 2 of the bill, the Senate bill, I call your attention to the language that says at the top of the page:

The provisions of this section shall not apply in the course of unbroken interstate transportation of any gambling device into any State where the use of such device is legal.

Now, most States have antigambling laws; do they not?
Mr. RUTTENBERG. All of them do, except Nevada, I believe.

Mr. BENNETT. So, if a device or if the Attorney General under the terms of this bill says that the device is a gambling device, what can the Governor do?

Mr. RUTTENBERG. You mean the Attorney General of the United States?

Mr. BENNETT. Yes. What can the governor of a State do about it? Mr. RUTTENBERG. If I were a governor, I think I would rely upon the Attorney General's interpretation.

Mr. BENNETT. And if he said under the broad language of this bill that what was commonly regarded as an amusement machine was in fact a gambling device, the Governor of the State would be powerless. to make any certification, would he not?

Mr. RUTTENBERG. I think he would. That is why we are particularly anxious to eliminate the amusement machines. Mr. BENNETT. By specific language. Mr. RUTTENBERG. Yes.

Mr. WILSON. I still feel that there is a question or a reasonable question as to the probable interpretation of the proposed proviso, when coupled with the proviso in section 2, as to what the Governor could do in certification; and what the courts would do in the way of declaring an amusement machine with a free-game device attached to it as to being a gambling game or not. Do you have any further observations on that particular subject as it relates to this proposed amendment of yours?

Mr. RUTTENBERG. No, sir; I do not.

Mr. ELLSWORTH. As I understand it, your association approves the bill, the Senate bill, if the amendment you suggest is adopted. Is that what your statement intended to say?

Mr. RUTTENBERG. Yes.

Mr. ELLSWORTH. Well, the amendment says that the term shall not be deemed to include, and then lists several types of machines, and then ends up with the words "a device designed for amusement." It seems to me, and I would like to have your interpretation of it, that the language of that amendment merely says that if a manufacturer of any device which might be adapted to gambling or might not, will design his machine for amusement, he is completely exempt from any of the terms or provisions of this bill.

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