Chesapeake Amusements, Inc. v. Riddle

BELL, Chief Judge. The issue this case presents is whether a dispensing machine with a video screen that displays the contents of the tickets that it dispenses and emits a musical tone that signals when a winning ticket is being dispensed is a “slot machine” prohibited by Md.Code (1957, 1996 Repl.Vol.), Art. 27, § 264B. 1 Seeking the answer, the appellant, Chesapeake Amusements, Inc., filed an action for declaratory judgment in the Circuit Court for Calvert County, naming the State’s Attorney for Calvert County as the defendant. 2 That court declared that such a machine is an illegal slot machine. We ¹⁹ shall reverse the judgment of the Circuit Court for Calvert County. I. Maryland Code (1957,1996 Repl.Vol.), Art. 27, § 259A (a)(2) authorizes commercial bingo in Calvert County and, in implementation of that authorization, permits the County Commissioners to issue various classes of licenses, including a “Class NG, beach license,” “for the operating or conducting of games of bingo.” § 259A (b). 3 Section 259A (a)(1) provides that “ ‘bingo’ includes the game of instant bingo for a Class NG beach license.’ ” The holder of an NG, beach license is not limited in its seating or player capacity, see § 259A (b)(1), and is not restricted in the value of the prizes or awards it may give.

See § 259A (b)(2). The appellant is a for-profit Maryland corporation providing commercial bingo, including instant bingo, under a valid NG beach license, at its principal place of business, the Rod ‘N Reel Restaurant, located in Chesapeake Beach, Calvert County, Maryland. At the time relevant to this action, i2t offered several ways for its customers to play bingo: (a) they could play the traditional live bingo game; (b) they could purchase instant bingo tickets, also known as “pull-tabs” or “pull-tab” tickets, from employees, who walk around the hall with large reels of tickets; (c) they could purchase paper pull-tab tickets from a dispenser, either a machine known as “Play & Win” or a machine known as “Lucky Tab II,” the latter of which displays a video image of the symbols contained on the inside of each pull-tab dispensed; or (d) they could purchase the electronic version of the pull-tab ticket, using a machine known as the “Oasis.” 4 ²⁰ There is no dispute on this appeal as to the traditional bingo game, and the parties are in agreement as to how instant bingo works. As to the latter, the Agreed Statement of the Case states: “Instant bingo tickets are often referred to as ‘pull-tab tickets’ or ‘pull-tabs.’ A customer purchases one or more instant bingo/pull-tab tickets from a ‘game’ or ‘deal’ of such tickets.

All the tickets in a given deal are identical in their outward appearance; some of the tickets entitle the persons who purchase them to receive prizes of specified value. Winning tickets are those that contain symbols on the inside that match designated winning combinations of such symbols. The total number of instant bingo tickets in a deal is a large but finite number 5 ; that number is determined when the deal is created or ‘constructed’ and does not change thereafter. The number of winning tickets at each prize level in a deal is also determined and known in advance; the winning tickets are randomly placed in the deal at the time the deal is constructed.

Thus, the chances of purchasing a winning ticket are precisely calculable for the deal as a whole. As tickets (including winning tickets) are purchased, the chances of purchasing a winning ticket from among the tickets remaining in the deal will vary, but because the number of tickets involved is large and the tickets are purchased by many different individuals over a period of time, it is a practical impossibility for customers to calculate or even estimate how the chances of winning have been affected by previous purchases.” On this appeal, only the Lucky Tab II machine is at issue. Neither in the trial court nor in this Court has the legality of pull-tab tickets sold manually been challenged. The question in the trial court was whether any or all of the machines used ²¹ to dispense pull-tab tickets are prohibited slot machines.

The circuit court determined, with respect to the Play & Win machine, that it was a simple pull-tab dispenser with no player enhancements and, therefore, a legal gaming device. By contrast, the court found both the Lucky Tab II and the Oasis machines illegal slot machines. It characterized the Oasis machine as “exactly the type of machine that the Legislature has sought to prohibit,” noting that it is “entirely electronic” with a “number of player enhancement^” and a choice of games and concluding that the Oasis machine, rather than a pull-tab dispenser, was a machine which tracks a player’s winnings and losses through “an internal credit system,” such that the player is not responsible for identifying a winning ticket.” The appellant appealed the ruling as to the Lucky Tab II machine, but not as to the Oasis machines, and the appellee has not sought review with respect to the Win and Play machines. Therefore, the correctness of those rulings is not now at issue.

Turning to the Lucky Tab II, it is an electrically operated machine that dispenses paper pull-tab tickets from a roll of preprinted paper pull-tabs inserted in the machine by a Chesapeake Amusements employee. Like the tickets that are sold manually or dispensed by the Play & Win machine, each ticket dispensed by the Lucky Tab II is part of a particular deal of outwardly identical tickets, in which the total number of tickets, as well as the number of winning tickets, were determined when the deal was constructed and printed. A deal of the Lucky Tab II pull-tab tickets consists of four rolls of tickets containing seven thousand five hundred tickets each, for a total of thirty thousand tickets in the deal, each having printed on it for accounting and control purposes, the serial number of that deal and a roll number and ticket number. The tickets dispensed consist of two strips of paper sealed together by the manufacturer when the ticket is printed.

When the two strips are separated, certain symbols appear on the inside of the ticket and certain combinations of those symbols entitle the purchaser to a prize, the amount of which is also determined by those symbols. The front of the ticket ²² indicates to the purchaser where to pull it open. A winning ticket is labeled as such on the inside. In addition, the combinations of symbols that entitle the customer to a prize and the amount of the prize associated with each winning combination are listed on the front of the Lucky Tab II machine.

The agreed statement of facts detail the actual operation of the Lucky Tab II machine: “A customer inserts money into the Lucky Tab II and pushes a button located on the front of the machine; a pull-tab ticket is then dispensed into a tray on the front of the machine. When a ticket is purchased from the Lucky Tab II, a bar code reading device in the interior of the machine reads the bar code on the back of the ticket as it is being severed from the roll of tickets and dispensed into the tray. The information from the bar code is used to create a video image of the symbols that appear on the inside of the ticket, and that image is then displayed on the video screen located on the front of the Lucky Tab II. The video image of the symbols on the inside of the ticket is displayed on the screen after a brief delay, which can vary from one machine to another and may be momentary or as long as six seconds after the ticket is dispensed.

As in a retail store setting, the bar code reader also reads and records accounting information relating to the ticket purchase. The video display of a winning ticket is accompanied by a musical signal. Depending on the amount of money deposited into the machine by the customer, the dispensing button can be pushed again to dispense another ticket.” While a customer who purchases a pull-tab ticket from the Lucky Tab II may open the ticket manually and/or refer to the image on the machine’s video screen to view the symbols on the inside of the ticket, the parties agree that it is only on the basis of the symbols that appear on the inside of the paper ticket that a winning ticket is determined. Thus, the symbols that are displayed on the video screen are not used to determine whether the customer is entitled to a prize.

Moreover, the Lucky Tab II machine does not make any payment to or ²³ record any credit on behalf of a customer as a result of a winning ticket. As is true with respect to manually sold tickets and those purchased from a Win and Play machine, a customer must take what he or she believes to be a winning ticket purchased from the Lucky Tab II to a Chesapeake Amusements employee to have the winning combination of symbols and the genuineness of the ticket verified before the prize associated with the symbols on the ticket may be awarded and paid. Although not entirely electronic as is the case with the Oasis machine — the paper ticket being necessary, even dispositive, for payment, the Circuit Court concluded that the Lucky Tab II too fell in the category of a prohibited slot machine, adopting the Attorney’s General’s characterization: it is “a pull tab machine that reads the printed card and tells the player whether he or she has won, thus making the card unnecessary except as a voucher to get payment of winnings.” It held that the operation of Lucky Tab II is prohibited by § 264B because it “entitles the player to ‘receive or become entitled to receive any piece of money ... or other object representative of and convertible into money,” one of the statutory criteria for a slot machine. Finally, relying on this Court’s opinion in Clerk v. Chesapeake Beach Park, 251 Md. 657 , 248 A.2d 479 (1968), the court determined that Lucky Tab II, as a “ ‘machine that furnishes gratification or reward to a winning player other than further free plays,’ ” was among those “intended to be banned by the General Assembly in enacting Article 27, § 264B.” We issued the writ of certiorari sua sponte to consider this important issue.

We now reverse the judgment of the Circuit Court. A. The appellant argues that Maryland’s statutory prohibition of slot machines is aimed at devices that award prizes as a result of an element of chance in their operations. That is reflected in § 264B. Pursuant to the plain language of that ²⁴ statute, which defines a “slot machine,” such machines have three main elements, “consideration, chance, and reward,” common to all gambling.

See State v. 158 Gaming Devices, 304 Md. 404, 412-14, 425-26 , 499 A.2d 940, 944-45, 951 (1985). First, the machine must operate “as a result of the insertion or deposit therein, or placing with another person of any piece of money, coin, token, or other object....” Second, there must be an “element of chance” or other “outcome of [the] operation [of the machine] unpredictable by [the user of the machine]” that determines what the user receives as a result of operating the machine. Third, what the user “may receive or become entitled to receive” as a result of (“by reason of’) the unpredictable operation of the machine, is “any piece of money, coin, token or other object representative of and convertible into money____” As applied to the question of whether a machine is a slot machine under the statute, the appellant argues, the element of chance “must be in the operation of the machine, and the possibility of a prize must result from the chance in such operation.” Next, the appellant contends that all three elements of gambling are present in connection with a pull-tab ticket, but not with respect to a dispenser of those tickets. It maintains that while consideration is present, the elements of chance and reward are lacking in a pull tab dispenser.

As to chance, the appellant asserts that the dispenser’s operation is invariable, it does not operate in an unpredictable way. Similarly, with respect to reward; while the paper ticket that is dispensed may turn out to be an “object representative of and convertible into money, that fact, the appellant points out, is not “by reason of’ any chance involved in the operation of the machine. Consequently, the appellant concludes, citing Maryland Code (1957,1996 Repl.Vol.), Art. 27, §§ 237-240, 241, 242, and 244, “[i]f the sale of the pull-tabs that are in a dispenser ... is not authorized by law, then the dispenser is illegal, but not because it is a slot machine. Pull-tabs are a form of gambling, and Maryland’s array of general anti-gaming ²⁵ statutes apply to their unauthorized sale, whether that is done manually or by means of a dispenser.” Furthermore, the appellant argues, § 264B does not support the conclusion that the Lucky Tab II is a slot machine.

It noted that, in its February 1996 letter, the Attorney General conceded that machines, including the Lucky Tab II, that merely dispense paper pull-tab tickets are not thereby rendered slot machines, where such a machine “does not calculate odds, or pick the tickets sold randomly .... ” and concluded that “[functioning in this way, the machines are comparable to a cashier or bartender who sells instant bingo cards from the top of a stack.” The appellant rejects the Attorney General’s further conclusion that the machine becomes a prohibited slot machine, and thus contraband per se, with the addition of “ ‘player enhancement features’ that enable the machine to tell the player that he or she has won.” In the appellant’s view, no more chance exists with respect to the video image and audio signal (“player enhancement features”) than with the dispensing of the pull-tab ticket. Nor is it accurate, the appellant maintains, for the Attorney General and the Circuit Court to characterize the pull-tab ticket dispensed by the Lucky Tab II as a “voucher” that is “unnecessary except ... to get payment of winnings.” The video image of the contents of the pull-tab and audio signal indicating a winning ticket are, the appellant argues, simply a byproduct of the dispensing function; they come into play only after a pull-tab ticket is dispensed. According to the appellant, this sequence refutes any argument that the player enhancement features make the Lucky Tab II a slot machine. It points out: “[w]hen a slot machine as defined in section 264B is operated, a prize determined as a result of the machine’s unpredictable operation can only be delivered after that operation is completed.

In the case of the Lucky Tab II, the pull-tab ticket is dispensed before the ‘player enhancement features’ begin, so there is no way that the pull-tab could be a ²⁶ ‘voucher’ representing a prize determined by those features.” Moreover, the appellant submits, because a winning pull-tab ticket is predetermined before being placed in the machine for dispensing and the “player enhancement features,” indicating its contents, are activated only upon its dispensation, the test proposed by the Attorney General — “if the player can tell whether he or she has won by looking at, and listening to, the machine, and needs the card only to collect winnings, then the game is being played on the machine ... ” — is simply inappo-site. The appellant finds support for its arguments in the operation of the Win & Play machine, found by the trial court to be a mere dispenser of pull-tab tickets, a decision that the State, as we have seen, did not appeal, and the Tab Force Validation Unit, determined by the Attorney General not to be a slot machine. 6 With respect to the former, it points out that, but for the player enhancements, the operation of the two machines are identical. Like the Lucky Tab II, when the paper pull-tab is inserted into it, the validation unit will display the results and print a ticket, containing the result, for presenta ²⁷ tion for payout. The appellant contends that everything about the validation unit, except how the pull tab is purchased, 7 is equally applicable to the Lucky Tab II, i.e. “[t]he chance element is on the [pull tab ticket].

The winnings are known, or knowable without the machine, and the machine has no effect on the amount of the winnings.” B. For the appellee, the central question in this case is whether the statutory provision prohibiting slot machines in Maryland permits a distinction to be drawn between pull-tab dispensing machines without player enhancement features and those machines with player enhancement features. The answer, it submits, turns on the interpretation of the element of “chance” under § 264B, particularly with respect from whose perspective it is viewed. According to the appellee, “the language of the statute supports an approach which measures the element of chance from the player’s standpoint and specifically considers whether a machine’s audio-visual features signal to the player that the element of chance is in the machine.” Recognizing that its interpretation is somewhat expansive and the appellant’s more restrictive, the appellee argues that the appellant’s interpretation of § 264B is inconsistent with both this Court’s cases broadly interpreting Maryland’s slot machine law and the well-settled principle, stated in Md.Code (1957, 1996 Repl. Vol.), Art. 27, § 246, that the general prohibition against slot machines is to be liberally construed.

Noting that the legal slot machine is the exception, not the rule, the appellee points out that the General Assembly’s authorization of slot machines, in limited circumstances by certain organizations in specific counties, has been expressly done. No such authorization has expressly been made in the case of Calvert County, it asserts. ²⁸ II. We are in agreement with the appellee that the critical question to be resolved is whether the statutory provision prohibiting slot machines in Maryland permits a distinction to be drawn between pull-tab dispensing machines without player enhancement features and those machines with player enhancement features. We also agree that the answer to the question lies in the interpretation of the “chance” element of the statute.

This involves statutory interpretation. Repeatedly we have said “that the cardinal rule of statutory construction is to ascertain and effectuate legislative intention.” Mayor and City Council of Baltimore v. Chase, 360 Md. 121, 128 , 756 A.2d 987, 991 (2000); State of Maryland v. Crescent Jaycees Foundation, Inc., 330 Md. 460, 468 , 624 A.2d 955, 959 (1993) (citing State v. Bricker, 321 Md. 86, 92 , 581 A.2d 9 (1990)); Privette v. State, 320 Md. 738, 744 , 580 A.2d 188, 191 (1990); Jones v. State, 311 Md. 398, 405 , 535 A.2d 471, 474 (1988). In Chesapeake and Potomac Tel. Co. of Maryland v. Dir. of Fin. for Mayor and City Council of Baltimore, 343 Md. 567, 578-79 , 683 A.2d 512, 517-18 (1996), this Court set out some of the well settled rules governing that search: “[W]e begin our analysis by reviewing the pertinent rules [of statutory construction].

Of course, the cardinal rule is to ascertain and effectuate legislative intent. Oaks v. Connors, 339 Md. 24, 35 , 660 A.2d 423, 429 (1995); Montgomery County v. Buckman, 333 Md. 516, 523 , 636 A.2d 448, 451 (1994); Condon v. State, 332 Md. 481, 491 , 632 A.2d 753, 755 (1993). To this end, we begin our inquiry with the words of the statute and, ordinarily, when the words of the statute are clear and unambiguous, according to their commonly understood meaning, we end our inquiry there also. Oaks, supra, 339 Md. at 35 , 660 A.2d at 429 ; Buckman, supra, 333 Md. at 523 , 636 A.2d at 451 ; Condon, supra, 332 Md. at 491 , 632 A.2d at 755 ; Harris v. State, 331 Md. 137, 145-46 , 626 A.2d 946, 950 (1993). “Where the statutory language is plain and unambiguous, a court may neither add nor delete language so as to ‘reflect ²⁹ an intent not evidenced in that language,’ Condon, supra, 332 Md. at 491 , 632 A.2d at 755 , nor may it construe the statute with “forced or subtle interpretations’ that limit or extend its application.” Id.

(quoting Tucker v. Fireman’s Fund Insurance Co., 308 Md. 69, 73 , 517 A.2d 730, 732 (1986)). Moreover, whenever possible, a statute should be read so that no word, clause, sentence or phrase is rendered superfluous or nugatory. Buckman, supra, 333 Md. at 524 , 636 A.2d at 452 ; Condon, supra, 332 Md. at 491 , 632 A.2d at 755 .” Our cases are also clear that, “in the interest of completeness,” the legislative history of an unambiguous statute or other materials that may shed light on the fundamental issue of legislative goal or purpose may be consulted. See e.g., State v. Thompson, 332 Md. 1, 7 , 629 A.2d 731, 732 (1993); Harris v. State, 331 Md. 137, 146 , 626 A.2d 946, 950 (1993).

We made clear in Chase, however, that: “We ... look at the purpose of the statute and compare the result obtained by use of its plain language with that which results when the purpose of the statute is taken into account. ... In other words, the resort to legislative history is a confirmatory process; it is not undertaken to contradict the plain meaning of the statute.” Id. at 131, 756 A.2d at 993 , citing Harris, 331 Md. at 146 , 626 A.2d at 950 . See also Coleman v. State, 281 Md. 538, 546 , 380 A.2d 49, 54 (1977) (“a court may not as a general rule surmise a legislative intention contrary to the plain language of a statute or insert exceptions not made by the legislature.”). For a machine, apparatus or other device to be a slot machine, its operation must be characterized by an element of chance, as a result of which the user of the machine apparatus or device may receive or become entitled to receive a prize or reward.

On these points § 264B is clear and unambiguous. It defines a slot machine as: “[A]ny machine, apparatus or device ... adapted for use in such a way that, as a result of the insertion or deposit therein or placing with another person of any piece of ³⁰ money, coin, token other object, [it] is caused to operate or may be operated, and by reason of any element of chance or of other outcome of such operation unpredictable by him, the user may receive or become entitled to receive any piece of money, coin, token or other object representative of and convertible into money.” The critical relationships are clear: the machine or device must operate “as a result of’ money or other objects, either inserted into the machine or device or given for that purpose to another person and the user’s receipt or entitlement to receive money or other object representative of and convertible into money is “by reason of any element of chance or of other outcome of such operation unpredictable by” the user. In other words, there must be consideration supplied by the user on the possibility that he or she will receive a prize “by reason of’ the unpredictable operation of the machine. The Lucky Tab II machine does not meet this definition any more than the Play & Win machine does.

The Lucky Tab II machine does not pick the paper pull-tab tickets sold in a random fashion. Indeed, the agreed statement of facts indicates that such tickets are dispensed in sequence from the deal placed into it by the appellant’s employee. Nor does it calculate odds. When a customer purchases a ticket from the Lucky Tab II, it is detached in sequence from the deal.

The Attorney General opined in a February 19, 1993 opinion letter, that without player enhancements, the Lucky Tab II is “comparable to a cashier or bartender who sells instant bingo cards from the top of a stack.” As that is being done, a bar code reading device in the interior of the machine reads the bar code on the back of the ticket. From the information encoded in the bar code, a video image of the symbols that appear on the inside of the ticket is created and, after the pull-tab has been dispensed and a brief delay up to six seconds, displayed on the video screen located on the front of the machine. When the pull-tab is a winner, the video display is accompanied by a musical signal. Thus, it is the purchase of the paper pull-tab that activates the player enhancement features.

And, because the paper pull-tabs also ³¹ determine the outcome of the game, it is with the paper pull-tabs with which the game is played. The player enhancement features, the video and audio, respond only to the information contained in the paper pull-tabs and, therefore, have no ability to affect the outcome of the game; the outcome of the game is set once the paper pull-tab is purchased non-randomly. The appellee does not dispute this analysis directly. Rather, the appellee focuses on the chance element of the slot machine definition, and especially the fact that it is stated from the user’s perspective.

Then, noting Art. 27, § 246 and its requirement of liberal construction of the gambling and betting laws “so as to prevent the mischiefs intended to be provided against,” 8 the appellee posits that, rather than actual chance, all that the Legislature intended was “the sense of unpredictability as to whether the machine will dispense a winning ticket.” From that premise it argues that the statute is entitled to a broad interpretation that will accomplish that goal. The appellee concedes that “this Court has not specifically considered § 264B’s element of