HomeMy WebLinkAboutIR 9628 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9628
To the Mayor and Members of the City Council March 18, 2014
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SUBJECT: REGULATION OF GAMING ROOMS AND GAMING MACHINES
Background
A game room is a business operated solely for the purpose of amusement, operating gaming
machines. Gaming machines, such as eight-liners, are coin-operated electronic gaming machines
that resemble a slot machine. A player "wins" if a horizontal, vertical or diagonal row of objects
line up. There are multiple variants of gaming machines, including video reel, video keno and
sweepstakes software. The cost to play varies and the prizes for winning vary.
Gaming machines are legal in Texas if they meet the definition contained in Section 47.01(4) (B)
of the Texas Penal Code. Under current law, a gaming machine is legal if it is used "only for
bona fide amusement purposes, awards the player exclusively with non-cash merchandise
prizes, toys, or novelties, or a representation of value redeemable for those items, that have a
wholesale value available from a single play of the game or device of not more than 10 times the
amount charged to play the game or device once or $5, whichever is less."
Game rooms such as Chuck E. Cheese, Putt-Putt and other amusement arcades that award
players with inexpensive non-cash prizes, toys or additional plays are legal in Texas. Game
rooms that award the player with pay-outs of cash, gift cards or gift certificates are not legal.
The difficulty in enforcing Section 47.01(4) (B) is that the law is unclear as to when a gaming
machine's pay-outs are illegal and the costs and logistics in investigating and prosecuting cases.
Current Enforcement of Section 47.01(4) (B)
According to the Police Department's Information Management Division, there are approximately
131 documented game rooms located within the City limits. Game rooms are allowed in all but
one of the commercial zoning districts (ER, neighborhood commercial restricted) and all industrial
zoning districts as an indoor amusement land use. The documented game rooms are brought to
the Police Department's attention through numerous sources, including citizen complaints, officer
discovery, and in some instances, the on-set of a criminal offense perpetrated against a patron of
the game room itself. The clientele of game rooms range from the criminal element to the
average citizen. The citizens are often older and known to carry cash, making them easy victims
of robberies, assaults, and thefts.
The Police Department has approached the enforcement aspect of illegal game rooms in two
ways. The first has been in an overt manner utilizing uniform patrol in an administrative-type
inspection in conjunction with Code Compliance, the Health Department, the Fire Department,
and the State Comptroller's Office. In the East Division, ten businesses were targeted, six of
which remain closed. In the North Division, three were targeted, two of which remain closed. The
second approach is an undercover operation involving Narcotics and Vice personnel who infiltrate
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9628
To the Mayor and Members of the City Council March 18, 2014
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SUBJECT: REGULATION OF GAMING ROOMS AND GAMING MACHINES
the game rooms and seek to make a gambling case against the establishment. Two cases
generated by the Vice Section this year led to numerous arrests, the confiscation of $13,231 in
cash, and the seizure of 64 Mother Boards (the nucleus of the machine) from the illegal gambling
devices.
Efforts are underway to aid the Police Department in their enforcement of state gambling laws by
involving various City departments and governmental entities in a unified approach to reducing
the number of game rooms and gaming machines operating illegally and the crimes that occur as
a direct result of their operations. Such efforts, supported by the City Attorney's Office, include the
pursuit of Chapter 125, Texas Civil Practice and Remedies Code — Common Nuisance litigation,
possible revocation by the Planning and Development Department of a certificate of occupancy
where the use of the property is contrary to the specified use of the issued certificate, revisions to
the zoning ordinance, and working with the various county district attorneys' offices to increase
the prosecution of gambling cases in addition to civil forfeiture actions.
Ability of the City to regulate gaming machines and game rooms
Texas Occupations Code Sections 2153.451-453 authorize county and municipal regulation of
coin-operated machines through the imposition of an occupation tax and allows regulation
through zoning. The City is authorized to impose an occupation tax on coin-operated machines
that may not exceed one-fourth of the state tax. TEX. OCC. CODE § 2153.451(b). The current
State occupation tax rate on each coin-operated machine is $60; the City may impose a tax of
$15 per year per machine. Any other fees imposed by the City should relate to the cost of
enforcing regulations. While a city may not discriminate against a business, commercial or retail,
solely because it operates a gaming machine, permissible zoning regulations under the statute
include restricting the exhibition of a gaming machine within 300 feet of a church, school or
hospital.
Next steps
Possible next steps the City Council may consider to regulate game rooms or gaming machines
include:
• amending Chapter 20, Article II, "Amusements" by adding Division 6 to-
o Define a gaming machine and game room;
• Establish the license and application process for game rooms and gaming
machines;
• Impose an occupation tax per machine as allowed by State statute (up to $15 per
gaming machine);
• Impose license and inspection fees;
• Impose regulations to provide for unobstructed windows, safety and machine
testing;
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9628
To the Mayor and Members of the City Council March 18, 2014
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SUBJECT: REGULATION OF GAMING ROOMS AND GAMING MACHINES
• Impose a limit on the hours of operation;
• Impose age restrictions; and
• Limit the number of gaming machines allowed within a game room.
• amending the Zoning Ordinance to-
o Limit the use of game rooms to a planned development zoning district or industrial
zoning districts;
• Impose distance restrictions of 300 feet between game rooms to churches, schools
and hospitals;
• Impose distance regulations between game room locations;
• Add a definition of game room; and
o Define indoor amusement.
Tom Higgins
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS