On appeal from State Division of Alcoholic Beverage Control.
Michels, King and Dreier. The opinion of the court was delivered by Michels, P.J.A.D.
[193 NJSuper Page 320] Plaintiffs Sidney Rosenkranz and Richard Fernandez appeal from an administrative action of John F. Vassallo, Jr., Director of the New Jersey Division of Alcoholic Beverage Control ("Division"), contained in Bulletin No. 2430, Item No. 3, issued on March 31, 1983, which prohibited the placing of certain video poker and other similar machines on liquor licensed premises. Item 3 of the Bulletin provided:
3. NOTICE TO LICENSEES -- PROHIBITION OF VIDEO POKER AND OTHER SIMILAR MACHINES ON LIQUOR LICENSES PREMISES
Numerous requests have been received from law enforcement officials, municipal clerks, retail-licensees and manufacturers of video machines seeking Division policy on the placement of Video Poker, Black Jack, Dice, Hi-Low and similar gaming type video machines on liquor licensed premises. While the proliferation of numerous variations of machines that involve traditional utilization of card and dice games is recent, the subject matter has been part of Division regulation since October 11, 1934 (then Rules 7 and 8 of State Regulation No. 20).
Current Division Regulation, N.J.A.C. 13:2-23.7 prohibits gambling of any kind on liquor licensed premises. The possession on licensed premises of "(any) slot machine or device in the nature of a slot machine which may be used for the purpose of playing for money or other valuable thing" is also prohibited. N.J.A.C. 13:2-23.7(a)(4). By operation of this Regulation, these machines are prohibited.
In addition, while a draw poker or similar type machine may be programmed so that it does not itself pay off anything of value based upon a participant's success or failure in connection with the operation of the machine, the Division has taken the policy position that such machines offer marginal amusement value in that there is a basic lack of need for any type of coordinative skill by the player. Such a machine is so susceptible to gambling between a participant and an observer that the Division has rejected their suitability in a liquor licensed premise. So too, the machine may be reprogrammed upon placement to award prizes itself, or the scores or points attained by a player may become a basis to award money or "other valuable things" by the licensee.
Thus, the video machines which resemble games of cards, dice, roulette, etc. are not permitted in liquor licensed premises in New Jersey.
Plaintiffs each own a separate company engaged in the business of placing vending and game machines owned by them in various business establishments under agreements with the owners of such businesses. More than 75% of plaintiffs' businesses consist of placing such machines in liquor licensed establishments.
The record reveals that during the period from August of 1982 to March of 1983, the Division received a number of requests from, among others, representatives of interested alcoholic beverage and amusement game associations, individual alcoholic beverage licensees and manufacturers of video gaming machines for information regarding the legality of placing video poker, dice, blackjack and similar machines ("Video Poker Games") in liquor license establishments. Responding to an inquiry made by Mary E. Rahmig, executive director of the New Jersey
Licensed Beverage Assn., Inc., Robert J. Pinard, Deputy Director of the Division of Alcoholic Beverage Control, advised Ms. Rahmig by letter dated August 16, 1982 that the Division would:
[C]ontinue the Division policy which prohibits amusement game devices on liquor licensed premises which resemble traditional games of gambling. Some of the more common type games include electronic poker, blackjack, ...