State v. One Hundred & Fifty-Eight Gaming Devices

GILBERT, Chief Judge. If gaming is a spice of life, the spices in the instant case have been dished up to us in one hundred and fifty-eight assorted flavors. This appeal arises from a petition by the State for the forfeiture of gaming devices seized from Willow Enterprises, Inc., a Maryland corporation (Willow). Prior to the trial on the petition, Willow moved for summary judgment in its favor on the ground there was neither statutory nor common law authority for the forfeiture.

Willow’s motion was denied. After the matter was heard in the Circuit Court for Anne Arundel County on the merits, the judge granted the State’s petition “with respect to those gaming devices found to be ‘slot machines’ included within the 158 Gaming Devices and with respect to the sum of $9,809.00” taken from Willow’s office. The trial judge further ordered that “gaming devices determined ... not to be ‘slot machines’ ” were to be returned to the owner. The State appealed and devices cross-appealed.

Inasmuch as this is an action in rem, and it is, in law, the devices that have cross-appealed, we shall for simplicity’s sake refer to the appellees and cross-appellants as “Willow.” The State asserts, essentially, that the trial court erred in failing to declare that all of the devices were illegal gambling devices and, consequently, subject to forfeiture. The cross-appellant Willow avers that: ⁴⁸ 1) the trial court’s delegation of forfeiture power to the State was an unlawful and unconstitutional delegation of judicial authority; 2) the trial court erred in applying a forfeiture penalty in the absence of explicit statutory or common law authority; 3) the trial court misapplied and misconstrued Maryland statutory and case law in holding that the forfeited devices are unlawful gaming devices; and 4) the trial court erred in declaring a forfeiture of the nine thousand eight hundred and nine dollars. Facts Following an investigation, the Maryland State Police on December 30, 1980, procured and executed a search and seizure warrant upon Willow’s headquarters located at 118 Roesler Road, Glen Burnie, Maryland. The police seized a variety of gaming devices, documents, and United States currency.

Willow is said to be engaged in the sale, service and distribution of arcade and pinball machines, gaming devices, and vending machines. Willow’s president and operator, Louis Wilner, was charged with unlawfully maintaining and possessing slot machines and lottery slips in violation of Md.Ann. Code art. 27, § 264B and § 362. On July 16, 1981, Wilner was adjudged by the district court to be guilty of those charges. Wilner did not appeal.

After Wilner’s conviction, the State filed its petition for forfeiture of the currency and gaming devices that the State police had seized from Willow. The devices seized were of various makes, models, and designs. As a matter of convenience, the State introduced during trial on the petition, eleven devices that it claimed “exemplified all of the various gambling devices seized.” Although they varied, most of the seized devices incorporated “free play” or “game credit” features that rewarded the successful player with “free” replays, which were registered on a three or four digit meter attached to the ma ⁴⁹ chine. 1 The player was able to use the free plays by activating a “play” button on the machine. Many of the alleged gaming devices were adapted with a “knock-off switch” and a “knock-off meter.” The switch and meter enabled the machine owner to remove game credits from the machine while maintaining a tabulation of the total free plays actually won.

A number of the seized devices had not yet been fitted with the knock-off switches or meters, but unattached meters were found at Willow’s premises. Forty-eight of the devices seized were Delta “Red, White and Blue” machines that issue stamps printed with randomly selected numbers. If the numbers on the stamps issued by the machine correspond with numbers on a chart that was placed on top of the machine, the player wins replays, coupons or merchandise. The remaining devices were a variety of “one-arm bandits” which are activated by a player’s depositing a coin in a slot and pulling a handle.

The handle rotates reels which spin and then stop, revealing a combination of symbols, numbers, words or colors. If the combination of the reels corresponds with one of the predetermined winning combinations, the machine releases the “payoff” into a coin tray located on the lower front of the machine. With the exception of the one-arm bandit devices, none of the gaming machines had the capability of directly paying off to the player. The other devices required a third party to redeem “free games” for something of value that was more tangible.

The trial judge found as a fact that certain devices were slot machines and thus proscribed by art. 27, § 264B. 2 ⁵⁰ Included within that finding were “partially dismantled” machines of the same type. He further found that the antique slot machine, the Delta Red, White and Blue machine without a knock-off device, all “similar free play devices,” and all “inoperable” machines were not slot machines within the meaning of § 264B. Forfeiture vel non Before we reach the question of whether the devices seized in the matter sub judice were slot machines, we must first determine the State’s right to institute forfeiture proceedings. Property which becomes the subject of forfeiture is characterized as either contraband per se or derivative contraband.

Contraband per se, that is, property that is inherently illegal, requires no forfeiture procedure in order to perfect the State’s interest in it.* * 3 Derivative contraband, on the other hand is property that may be legal or illegal to possess depending upon the particular circumstances. 4 A determination that property is contraband, under the derivative theory, is made by application of the statute, if there be one, or by common law standards applied to the facts. The devices seized from Willow may or may not have a lawful, useful purpose. That being the situation, they may not be characterized as contraband per se. Whether the devices are derivative contraband requires a judicial determination.

If the devices are found to be derivative contraband, they are subject to forfeiture. ⁵¹ The authority for forfeiture in Maryland is derived from two sources, scilicet, common law or statute. 5 An integral part of each is four basic propositions: 1) forfeiture is a civil in rem proceeding, Director of Finance, Prince George’s County v. Cole, 296 Md. 607, 618 , 465 A.2d 450 (1983); 2) the guilt or innocence of the owner of the seized property is of little significance, Bozman v. Office of Finance, Baltimore County, 52 Md.App. 1, 10 , 445 A.2d 1073 (1982), aff'd 296 Md. 492 , 463 A.2d 832 (1983); 3) forfeitures are not favored in the law and should be avoided when possible, Commercial Credit Corp. v. State, 258 Md. 192, 199 , 265 A.2d 748 (1970); and 4) the burden of proof necessary to sustain a forfeiture is that of a preponderance of the evidence, Prince George’s County v. Blue Bird Cab Co., 263 Md. 655, 659 , 284 A.2d 203 (1971). There is no statute in this State authorizing the forfeiture of the devices seized from Willow. The State’s argument that the forfeiture of the devices is authorized by art. 27, § 264B(V) is lacking in merit. Section 264B(V) was enacted by Laws 1981, ch. 280.

The section provides: “V. It shall be a defense to any prosecution under paragraph III of this section if the defendant shows that the slot machine is an antique slot machine and was not operated for gambling purposes while in the defendant’s possession. For the purposes of this paragraph, a slot machine is an antique slot machine if the defendant shows by a preponderance of the evidence that it was manufactured prior to 1941. Whenever this defense is offered, no slot machine seized from any defendant shall be destroyed or otherwise altered until after a final court determination including review upon appeal, if any, that the defense is not applicable. If the defense is applicable, the slot machine shall be re ⁵² turned pursuant to provisions of law providing for the return of property.” (Emphasis added.) The State, based upon the above emphasized portion of the section, claims that, “[t]he General Assembly thus enacted a statutory defense for ‘antique’ machines that, but for the defense, would be subject to forfeiture under § 264B.

In doing so, the General Assembly quite clearly recognized that the authority to forfeit and even ‘destro[y]’ contraband slot machines already existed ....” We think the State misinterprets the statute. At best, the forfeiture authority embodied in § 264B(V) is inferential. It certainly is not clear enough to pass muster under a strict constructionist theory, the interpretation required in construing forfeiture statutes. Commercial Credit v. State, supra.

See also 37 C.J.S., Forfeitures (1943) § 4(b), where it is said: “For a statute to be construed so as to produce a forfeiture, its language must clearly show an intent to do so; forfeitures are never to be inferred from doubtful language.” To sustain the State’s argument would necessitate that we do precisely what we should not do, that is, infer forfeiture. The legislature provided in § 264(a) that the title to “money, currency or cash ... seized or captured by ... police ... in connection with any arrest or the playing of or operation of ... any ... gaming device ... shall immediately vest in and to the local government ... or if seized by the State ... to the State ... subject to a return to a claimant.” 6 We point to § 264(a) to illustrate the extent to which the General Assembly has gone in expressing itself with respect to forfeiture in gaming matters. We are confident that had the legislature intended to provide in § 264B(V) for the forfeiture of gaming devices, it would not ⁵³ have so done in the indirect and inferential manner attributed to it by the State. The absence of a forfeiture statute, however, does not ipso facto dictate the return of seized property.

There may be a forfeiture to the State under the common law if there is a three-pronged showing that: 1) the property cannot be used for any legitimate purpose; 2) the property was procured, used or held for an illegal purpose; and 3) there has been a finding of guilt as to the owner or user of the property. Wagner v. Upshur, 95 Md. 519 , 52 A. 509 (1902). The third prong, the guilt or innocence of the owner or user, while of importance in earlier times, is no longer of significance, Bozman, supra. Nevertheless, it remains relevant with respect to proving the second prong.

Absent a criminal conviction, the second prong may still be satisfied by a showing that the owner or user intended the property to be procured, held or used for an illegal purpose. Similarly, the first tine — that the property cannot be used for any legitimate purpose — mandates that the intended purpose be a legitimate one so as to avoid forfeiture. It is difficult to imagine a situation in which property does not serve some legitimate purpose, even though ludicruous or farfetched. The proper emphasis in the first prong must be on the word “legitimate” rather than on the word “any.” The State must show by a preponderance of the evidence that the owner or user of the seized items intended the property to be used illegally and that the items were procured, held or used for an unlawful purpose.

Once the State satisfies that requirement, the property is presumptively deemed contraband. The presumption is not conclusive, hence it may be rebutted. Having established that the State may cause the forfeiture of illegal gaming devices, we turn now to a discussion of § 264B in order to determine whether the devices in question were properly seized as illegal slot machines. ⁵⁴ Slot Machines Md.Ann.Code art. 27, § 264B declares, in pertinent part: “Any machine, apparatus or device is a slot machine within the provisions of this section if it is one that is 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 money, coin, token or other object, such machine, apparatus or device 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, irrespective of whether the said machine, apparatus or device may, apart from any element of chance or unpredictable outcome of such operation, also sell, deliver or present some merchandise or money or other tangible thing of value.” The statute resulted from a study and report presented by the Emory Commission 7 at the behest of Governor J. Millard Tawes in 1962. The concerns of the committee were binary: 1) the abolition of slot machines in Maryland, with particular attention to Anne Arundel, Calvert, Charles, and St. Mary’s Counties, and 2) effectuating an abolition of the machines with the “least possible damage to the economy” of those counties.

The Emory Commission Report contained an extensive analysis of gambling laws nationwide. The Commission pointed out that, “[t]he Federal Gambling Devices Act of 1962 makes the possession of any machine which may be used as a gambling device illegal without requiring proof of cash pay-offs.” 8 The report stated: ⁵⁵ “[T]he distinction [made by the Federal Act] between ‘free play’ gambling devices and ‘free play’ amusement devices follows the Federal tax laws.... The difference between the two types of machines lies in their construction and operation. If the machine has an odds mechanism, provision for releasing free plays and a meter for recording free plays released, then it is a gambling machine.

If the machine does not have such gambling features, its use for gambling is not considered practicable even though it may award free games in a limited number .... The Federal tax regulations describe a ‘free play’ gambling device which must have a ... stamp, as follows: ‘A machine which is operated by means of the insertion of a coin, token, or similar object and which, even though it does not dispense cash or tokens, has the features and characteristics of a gaming device, whether or not evidence exists as to actual payoffs.’ ” Report at 11-12. The Emory Commission suggested procedures for the abolition of slot machines. It said: “Any abolition of slot machines requires repeal of ... local laws ... legalizing cash pay-off machines.

It also requires repeal or amendment of the General Laws permitting the licensing of ‘free play’ slot machines classified by the Federal government as gambling devices, and enactment of a State law at least as strong as the Federal Gambling Devices Act of 1962 prohibiting any machine, ‘free play’ or otherwise, which may be used as a gambling device.” Report at 14. In direct response to the report, the General Assembly enacted Laws 1963, ch. 617, which was codified as Md.Ann. Code art. 27, § 264B. ⁵⁶ The Court of Appeals in Clerk v. Chesapeake Beach Park, 251 Md. 657, 666 , 248 A.2d 479 (1968), construed § 264B as “adopting] the theory of the federal statutes which classify as gambling devices those pinball machines that can pay off in other than additional ‘free plays,’ but classify as permitted amusement devices ‘free play’ pinball machines.” The obvious distinction is the payoff possibility. The federal laws concerning gaming devices were not always as clear as they are today. The Federal Gambling Devices Act of 1962, 15 U.S.C. § 1171 et seq., was an amendment and revision of the Slot Machine Act of 1951, 64 Stat. 1134 .

In summarizing the necessity for the enactment of the Federal Gambling Devices Act, the Court, in Lion Manufacturing Corporation v. Kennedy, 330 F.2d 833 (D.C.Cir.1964), penned: “[T]he major thrust of the 1951 Act [was directed] to the then familiar and widely prevalent slot machine, or ‘one-armed bandit,’ as it is ruefully referred to by those addicted to the unequal sport it offers. [9] The use of this language is quite understandable since, at the time, the traditional ‘slot machine’ constituted the primary problem to be dealt with. Congress, however, failed to reckon with human ingenuity. New devices were developed which, although perhaps outside the definition in the Act, perpetrated the evils giving rise to the initial legislative concern.” 330 F.2d at 835 . The Court went on to explain that the Gambling Devices Act of 1962 attempted to remedy the problem arising from the use of non-coin operated machines that do not pay off directly or indirectly.

Accepting, as we must, the reasoning of the Court in Clerk v. Chesapeake Beach Park, supra, it then becomes apparent that § 264B attempted to cure the same evils as ⁵⁷ those treated in the Federal Gambling Devices Act of 1962. We are compelled to conclude that it matters not one whit whether the pay off on a machine is released directly from the device itself into a coin tray, or whether an attendant electronically or mechanically “erases” the tallied free plays from the machine, and then compensates the player with money or something “representative of and convertible into money,” such as tokens or coupons that are redeemable for merchandise. “If the phrase defining material reward of the winner is read as money, coin, token or other object ‘representative of or convertible into money,’ as we shall hold it to be, it is apparent that not only the tokens which fall to a winner in the cup of the one-arm bandit but the aggregate value of the free plays won on the console or pinball machine, whether evidenced by a receipt or not, are alike ‘representative of’ money in that under the evidence they can be used to purchase beverages, food or merchandise of a specified dollar value. Chapter 617 [art. 27, § 264B] proscribes machines