GAMBLING DEVICES

THURSDAY, MAY 4, 1950

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The committee met, pursuant to adjournment, at 10 a. m., in room 1334, New House Office Building, Hon. Lindley Beckworth presiding. Mr. BECKWORTH. The committee will please come to order.

The first witness we shall have this morning is our colleague, Hon. Walter S. Baring, a Member of Congress from Nevada; the only Member of the House of Representatives from Nevada.

STATEMENT OF HON. WALTER S. BARING, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEVADA

Mr. BARING. Thank you, Mr. Chairman. I do not want to take up too much time of the committee, Mr. Chairman. As you know Nevada' has wide-open gambling and I have an amendment which I would like to submit to Senate bill 3357, or the corresponding House bill, whichever one you are studying.

The amendment is as follows:

Providing, That the provisions of this Act shall not apply to the transportation involving the return to the original consignor of a gambling device by the original consignee who resides in a State or subdivision thereof where such devices are licensed.

It is a simple amendment, but we do have a lot of returns on the machines. Maybe the machine might break down or there might be an exchange for new machines, new models, and I do believe that in our State we would like that to apply in the bill or if the committee thinks it is already contained in the bill, it is all right; but we would like to have that provision that we can send the machines back from Nevada, back to the manufacturer of the machine.

I really would like to go further. I would like to make it broader, that we could ship them to any other State that legally has slot machines. However that is up to the committee.

But, I would like to get this provision into the bill. That would let us return the machines to the original manufacturers.

Mr. BECKWORTH. Is your amendment worded as you desire it to be worded?

Mr. BARING. Yes, with the exception that I would like to have it broader if we could.

Mr. BECKWORTH. Mr. Baring, why not submit the amendment in the form that you would like for it to be considered, and I assure you

that the committee will consider your version of the amendment when we meet to consider the bill in its final form.

Are there any questions? Thank you very much, Mr. Baring.

The next witness we shall have is our former colleague, Hon. Dow W. Harter, an attorney in Washington and formerly a Representative from the great State of Ohio. We will be very glad to hear you, Mr. Harter.

STATEMENT OF DOW W. HARTER, REPRESENTING THE TOY MANUFACTURERS OF THE U. S. A., INC., WASHINGTON, D. C.

Mr. HARTER. Thank you, Mr. Chairman and members of the committee. My name is Dow W. Harter. I am an attorney with offices in the Washington Building, this city. I represent the Toy Manufactures of the U. S. A., Inc., a trade association, made up of the great majority of the manufacturers of toys, playthings, and games in this country. While the volume of business done by the toy industry is considerable, the association consists of numerous members, most of whom fall in the category of small business concerns.

My remarks will be confined to S. 3357, as I understand Mr. Preston, the author of the earlier bill, H. R. 6736, considers S. 3357 a more comprehensive measure and favors its enactment rather than H. R.

6736.

Let me say emphatically we do not appear in opposition to S. 3357, but, on the contrary, we are in complete sympathy with and heartily in favor of the purpose of this bill which the Attorney General saysis to support the basic policy of the States, which outlaw slot machines and similar gambling devices, by prohibiting the interstate shipment of such machines except into States where their use is legal.

But, as members of this committee during interrogation of witnesses have said, the definition of the term "gambling device" is the crux of the proposed bill, and to this catch-all language we are opposed. It seems strange that the Justice Department says its objective in asking Congress for this legislation is to assist the States of the Union in outlawing slot machines and other similar gambling devices, yet in its definition it does not identify or indicate the types of gambling machines which the bill is to eliminate.

You are requested to enact a criminal statute. Certainly by precedent and under our system of justice, as administered by our Courts, such an Act should clearly and concisely state the offense which the law is intended to make illegal. Let us take a look at the language of section 1 of S. 3357. This says the term "gambling device" means any machine or mechanical device, or parts thereof, designed or adapted for gambling. If that were the end of the definition, there might not be too much objection, certainly not to a machine or mechanical device designed for gambling. Adapted for gambling would raise the question immediately of who is liable for utilizing a perfectly innocent article of legitimate use produced in the ordinary course of business by a manufacturer, and then adapted or utilized by the purchaser for gambling.

Let us now go a step further to the remainder of the definition in section 1 of the proposed bill, which reads:

or 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.

There are many toys and games which are mechanical devices, not designed or intended for gambling but for the amusement of children and, I presume, their parents as well. Yet these, with the element of chance being present in their use, can be gambling devices under the definition in S. 3357. It is possible to make wagers or to offer a prize in the form of something of value in the operation of these apparently innocent games. It is difficult to believe the Congress will adopt such language in a criminal statute. In our opinion, Congress should define the offense. It surely is an improper delegation of legislative authority to leave to administrative decision the determination of what is unlawful under the act. We call your attention to the refusal of the Department witness to answer inquiries of your members, asking whether pinball machines and other amusement games and mechanical devices are within the proposed statute.

I quote from the transcript of these hearings, pages 144 and 145, questions by Mr. Bennett of the committee, answers by Mr. Plaine of the Department of Justice:

Mr. BENNETT. Do you not think under the language of this bill that you have the right to say that a machine which is not manufactured for the purpose of gambling, but by adaptation by the purchaser can be used, can be manipulated into a gambling machine, have you not got the right under the language of this bill to say that machine can be made into a gambling machine, therefore we say it is, and it is within the language of the bill?

Mr. PLAINE. All laws require administration, sir, and where you deal with laws that have a number of objects included, obviously the administering officials have to engage in some process of determining which is or is not within the purview of the act, and your criticism, as I see it, goes to the whole process of law enforcement.

Mr. BENNETT. My criticism goes to this, my criticism is directed to the fact that you have not nailed down anything here. You have left to administrative discretion what the crimes will be in this case. There is not any question about that. You have not described what type of machine is a gambling device, such as you have done in the Internal Revenue Code. You have left it wide open on all ends for administrative interpretation as to what the crime is. When you are defining a crime, subjecting the citizens of this country to the commission of a crime, prosecution for a crime, the nature of the elements that go about to make that crime should be specifially described in the law. That is my notion of good law. You have not done that.

Mr. PLAINE. There have to be decisions whether it falls into one class or another, or in the other classes, no matter what definition you use, sir. You always have that question of inclusion and exclusion.

Again on pages 148 and 149 of the transcript of these proceedings: Mr. BENNETT. In addition to that, you have given the administrative agency the right in this language to eliminate every amusement machine in the country today, irrespective of whether it is used in connection with gambling or not, because you do that by giving yourselves the right. If I were in the Attorney General's office, I could say that any of these machines, I could go into court and prove that any of the amusement machines by common consent is now regarded for purposes of amusement and not for gambling. I could very easily go into court and show from a mechanical standpoint that that particular machine could be adapted for purposes of gambling and hence, it is out, it is eliminated, it cannot be used. I ask you to dispute that statement.

Mr. PLAINE. We have been over the point so many times, sir, I do not know that I would serve any useful purpose by rehashing it. Certainly if Congress wants to eliminate sheer amusement from anything of value, it can do so.

I would like to show the committee a few simple mechanical games that I picked up in various stores here in Washington, as a demonstration of what mechanical devices are included in the toy and game field and how easy it would be under the definition contained in this bill to utilize these simple toys as gambling devices.

You will note that this is a simple mechanical marble machine, with slots upon which there are different figures so that the game can be played and the players determine the winner by adding up the total of their scores.

Mr. KEOGH. What do they get when they finish?

Mr. HARTER. That is it. If they decide to use it for the purpose of gambling they can do so. Ordinarily it was not intended, never intended to be used as a gambling device, but as has been said almost every machine of that sort can be gambled upon if you desire.

Then, we have a game here which is really a child's bingo game. It is very similar to the game which is played by adults so frequently, bingo. Instead of having the numbers in a cage or in a box and drawing those out, we have a wheel and we spin the wheel and the wheel comes up on one of the animals designated here and, of course, the youngster who is playing lays a token on whichever animal comes up by reason of the spinning of the wheel.

That likewise could be adapted to the purpose of gambling, and it is a mechanical device.

Mr. DOLLIVER. That last one has a very familiar look to me. I think one of the boys in my family got one of those for Christmas. Santa Claus brought it to him. Certainly Santa Claus would not distribute gambling devices.

Mr. HARTER. We certainly hope that Santa Claus would not be in the position by reason of an act of Congress, of distributing gambling devices.

No doubt Santa Claus did get a game like this or one very similar to it, because I find them in all of the stores of the country.

I believe this is very similar to a pinball machine.
Mr. KEOGH. It has the mark of similarity.

Mr. HARTER. Here is another small toy which is very similar also to a pinball machine, which is intended for use by children. This also is a mechanical device which might be used if one was inclined to, as a gambling device.

Mr. KEOGH. Mr. Harter, I have seen machines for use by children which are in the nature of a miniature coin machine such as is seen in the subway stations, where if a child puts a penny into it a little piece of chocolate comes out, which is intended, I think, to promote thrift on the part of the child. He cannot have the candy unless he saves the penny.

Would that be banned?

Mr. HARTER. I do not think a vending machine of that kind would, because I do not believe there is any element of chance connected with the operation of that, Mr. Chairman.

Mr. DOLLIVER. Before proceeding, I just want to be sure that I understand your views on this. You are not objecting to the elimination of mechanical devices that are strictly adapted to gambling, such as slot machines, but you do object to a provision in the law which would permit the Attorney General or any other agency of the Federal Government from determining in the final analysis that such device as you have illustrated here could, by interpretation of the agency, be called a device for gambling. Is that not what you contend?

Mr. HARTER. That is very correct and true, that we feel that the definition in section 1 is so broad that it could include such children's devices as this [indicating] if they are adopted or used for the purpose

of gambling. Primarily they are in no sense gambling devices and not intended as such, and I am going to make suggestions to the committee with reference to changes in section 1. I believe that in coming to this hearing and finding fault with definitions we should, if possible, offer something constructive so that the committee can maul it over and see if it has merit.

Section 2 makes it unlawful knowingly to transport or cause to be transported in interstate or foreign commerce any gambling device. Who is to determine what is or what is not a gambling device. The manufacturer of an innocent amusement toy or game surely is not transporting a gambling device, but what about the user who purchases it at a chain, toy, or department store and puts it to a gaming use? Will it be necessary for every manufacturer to have the Department of Justice make a determination if his numerous items in his line are included within this definition of gambling device, or must he seek and obtain the ruling of the governors of the 48 States that such children's toys and games, their possession and use, are not illegal under State law.

Section 3 makes it incumbent upon every manufacturer of and dealer in gambling devices to register with the collector of internal revenue for each district in which such business is to be carried on, his name or trade name, his principal place of business, and the addresses of his places of business in such district. It is quite probable a legitimate toy and game manufacturer must so register because of the possible adaptation and use of his products making him a manufacturer of gambling devices as defined in section 1. Must the toy manufacturer comply with labeling and packaging provisions of section 4 of the bill? Doubtless he must if he is engaged in manufacturing and dealing in gambling devices as herein defined.

This whole measure stems back to this unworkable, uncertain, and confusing definition of gambling device. Toy and game concerns are jealous of their reputations and surely will resent being cataloged with slot-machine makers.

It should not be difficult for this committee along with its staff and legislative counsel of the House to find suitable language to describe with clarity the kind of gambling devices this legislation is designed to curb. My suggestion would be adoption, with some minor changes, of a definition of gambling device now in title 26, section 3267, of the Internal Revenue Code. This substitute definition would then be in some such language:

That, as used in this Act, the term "gambling device" means any machine or mechanical device, or parts thereof, whether operated by means of the insertion of a coin, token, or similar object, or in any other manner whatsoever, and which by application of the element of chance may deliver or entitle the person playing or operating the machine to receive, directly or indirectly, cash or anything of value.

You will note we have endeavored to bring within the prohibition of the statute any new device or design of one-armed bandit machines by inclusion of the phrase, "or in any other manner whatsoever."

While we prefer this definition, we have no objections to the language proposed by the Coin Machine Institute this morning, which would have section 1 read as follows:

SECTION 1. As used in this Act the term "gambling device" means any machine or mechanical device, or parts thereof, designed or adapted for gambling

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