After the 1993 amendments to North Carolina's slot-machine statute, are video poker machines still illegal under G.S. § 14-306, or are they exempt as amusement devices?
Plain-English summary
Rep. Billy Creech asked Chief Deputy AG Andrew Vanore a direct question: did the Court of Appeals decision in Collins Coin Music Co. v. N.C. ABC Commission, 117 N.C. App. 405 (1995), make all video poker machines illegal? The machines Creech described had a standard layout (insert money, five cards on the screen, discard and draw to improve the hand, up to eight free replays or accumulated credits, prizes worth no more than $10 that could not be exchanged for cash).
Vanore answered no. Collins was not controlling because the General Assembly had amended G.S. § 14-306 in 1993 (Chapter 406, Section 1, 1993 Session Laws, effective December 1, 1993) and the amendment substantially changed the legal standard for the amusement-device exception.
What changed in 1993. Before the amendment, the exception to the slot-machine definition required that the machine's operation "depend upon the skill or dexterity of the player." The Collins court read that standard strictly: skill or dexterity had to be the "dominating element" determining the result. The court held that Collins did not prove video poker met that high bar.
The 1993 amendment lowered the bar. The exception now applied to coin-operated machines, video games, and other mechanical devices that "involve the use of skill or dexterity" to make varying scores or tallies. "Involve the use of skill" is a much weaker requirement than "depends upon skill." The legislature also added explicit limits: the machine must limit accumulated credits or replays to eight, and any prizes or merchandise awarded must be worth no more than $10 and cannot be exchanged for cash.
The four-prong test. Vanore distilled the post-1993 statute into a four-element legality test for any video poker machine or comparable device:
- The machine must be used for amusement.
- The player's ability to make varying scores and receive coupons must involve the use of skill or dexterity.
- In actual operation, the number of accumulated credits or replays that may be played at one time and that may award free replays or paper coupons exchangeable for prizes is limited to eight.
- Coupons or credits accumulated in a single hand cannot be exchanged for cash, and any merchandise must be worth no more than $10.
A machine that satisfied all four prongs was outside the § 14-306 definition of an "illegal slot machine" and was therefore legal under the law as of November 1997.
Currency note
This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. North Carolina has tightened its gaming and video-poker laws multiple times since 1997. Subsequent legislation has banned most video poker outright, regulated electronic sweepstakes terminals, and created specific exceptions for the Eastern Band of Cherokee Indians' tribal compact. Anyone analyzing a current video poker, video sweepstakes, or amusement-device question should look at the current text of G.S. § 14-306, § 14-306.1, § 14-306.4, and the modern appellate decisions, not at the 1997 framework this opinion describes.
Background and statutory framework
G.S. § 14-306 defines "slot machine," which is illegal under North Carolina's gambling laws. The first paragraph supplies the definition. The second paragraph contains exceptions for certain amusement devices.
The structure of the second paragraph is what Collins and this opinion both interpreted. The pre-1993 text required that the device's operation "depend upon the skill or dexterity of the player." That phrasing invited a contest over what "depend upon" meant. Collins answered the contest by treating the phrase as requiring that skill be the dominating factor; chance-based devices that involved some skill but were essentially games of chance did not qualify.
The 1993 amendment rewrote the exception. The new text spoke of devices that "involve the use of skill or dexterity." That phrasing is consistent with mostly-chance games that have a skill element. It substantially loosened the exception. Combined with the explicit eight-credit and $10-prize caps, the legislature defined a category of low-stakes amusement device that could be operated commercially without crossing into illegal-slot-machine territory.
The opinion is short because the new statutory text answers the question on its face. Collins had interpreted superseded language; the new language reached a different result.
Common questions
Did this opinion legalize all video poker?
No. It identified the four conditions for legality and warned that machines failing any one of them remained illegal slot machines. A machine that paid cash, exceeded eight credits, awarded prizes worth more than $10, or did not involve any skill remained subject to prosecution under § 14-306.
How was the eight-credit cap measured in practice?
The statute referred to "the number of accumulated credits or replays that may be played at one time." A machine that allowed credits to be staked or bet eight at a time during a single play was inside the cap. A machine that allowed unlimited credit accumulation, or that permitted bets above eight credits per play, was outside. Enforcement practice focused on the actual operation of the machine, not on its theoretical maximum.
What counted as "skill or dexterity"?
The 1993 amendment did not define the term. The opinion did not write a test, but the change from "depends upon" to "involve the use of" implied that any non-trivial skill element should qualify. Discard-and-draw decisions in video poker (which cards to keep, which to discard) involve at least some skill. The change in the standard meant that under the 1997 framework, courts could not insist that skill be the deciding factor.
Why did the AG read the 1993 amendment as superseding Collins?
Because the amendment changed the operative statutory text that Collins had interpreted. Collins analyzed "depends upon the skill or dexterity of the player." The amendment replaced that phrase with "involve the use of skill or dexterity." When a court interprets statutory language and the legislature then changes the language, the new language controls and the prior interpretation no longer governs cases arising under the amended text.
What were the limits of this opinion's protection?
The opinion only spoke to § 14-306. Other gaming offenses (lottery laws, sports betting prohibitions, federal gambling laws) were not addressed and could still apply. Local ordinances, ABC permits, and zoning rules could also restrict where amusement devices could be located. A machine that satisfied the four prongs was outside the § 14-306 ban but not necessarily outside every other law.
Source
- Landing page: https://ncdoj.gov/opinions/video-poker-machines-2/
Citations
- N.C.G.S. § 14-306
- N.C.G.S. § 14-296
- N.C.G.S. § 14-301
- N.C.G.S. § 14-302
- N.C.G.S. § 14-305
- Chapter 406, Section 1, 1993 Session Laws
- Collins Coin Music Co. v. N.C. Alcoholic Beverage Control Comm., 117 N.C. App. 405, cert. denied, 340 N.C. 110 (1995)
Original opinion text
November 5, 1997
The Honorable Billy J. Creech
N.C. House of Representatives
Room 635, Legislative Office Building
Raleigh, NC 27601-1096
RE: Advisory Opinion; Video Poker Machines; N.C.G.S. § 14-306
Dear Representative Creech:
You request our opinion whether the North Carolina Court of Appeals decision in Collins Coin Music Co. v. N.C. Alcoholic Beverage Control Comm., 117 N.C. App. 405, cert. denied, 340 N.C. 110 (1995), makes illegal the video poker machines described in your letter of November 1, 1997 addressed to Attorney General Easley.
You describe the video poker machines as follows:
The video poker machines in question electronically simulate the play of poker. Upon inserting money and pressing a play button, five cards appear upon the screen, any one of which may be discarded by pressing corresponding discard buttons. New cards replace the discarded ones in an effort to obtain a better hand. Incorporated on the machine is a free-play feature that rewards a successful player with a maximum of eight free replays or accumulated credits that may be played one at a time which are registered on a digit meter on the screen of the machine. These credits on the machine may be used for replays or may be exchanged for merchandise with a value not exceeding $10.00. The machines are used for amusement and involve the use of some skill.
For reasons which follow, the video poker machines you describe are not illegal, since they involve the use of some skill and otherwise comply with the law. Collins is not controlling because the General Assembly substantially amended the law upon which the Collins decision was decided.
Collins involved a civil action against the State seeking a declaratory judgment that the video poker machines owned by plaintiff Collins Coin Music Co. (Collins) were not illegal slot machines as defined by N.C.G.S. § 14-306. Both Collins and the State agreed that the video poker machines fit within the § 14-306 definition of an illegal slot machine. Collins contended, however, that the machines were expressly excepted from the statutory definition of an illegal slot machine by the second paragraph of § 14-306 which provided:
The definition [of an illegal slot machine] contained in the first paragraph of this section and G.S. 14-296, 14-301, 14-302 and 14-305 does not include coin-operated machines, video games, and devices designed and manufactured for amusement only, the operation of which depends upon the skill or dexterity of the player. Included within this exception are pinball machines, video games, and other mechanical amusement devices that enable the player, based on his skill or dexterity, to make varying scores or tallies and to receive free replays or paper coupons that may be exchanged for prizes with a value not exceeding Ten Dollars ($10.00), but may not be exchanged or converted to money. N.C.G.S. § 14-306 (Emphasis supplied).
The Court held against Collins. Although the Court acknowledged that some skill was involved, it concluded that Collins did not prove "that the operation of the video machines at issue here depends upon the skill or dexterity of the player," rather than chance. 117 N.C. App. at 408.
While the Collins case was pending in the North Carolina Court of Appeals, the General Assembly in 1993 amended N.C.G.S. § 14-306. See, Chapter 406, Section 1, 1993 Sess. Laws. The amendment took effect December 1, 1993 and applied to offenses occurring after that date. The General Assembly left intact the first paragraph of § 14-306 which defines an illegal slot machine. The amendment changed the second paragraph of § 14-306, the paragraph which contains the exceptions to what is an illegal slot machine, as follows:
The definition [of an illegal slot machine] contained in the first paragraph of this section and G.S. 14-296, 14-301, 14-302, and 14-305 does not include coin-operated machines, video games, and devices used for amusement. Included within this exception are pinball machines, video games, and other mechanical devices that involve the use of skill or dexterity to make varying scores or tallies and which, in actual operation, limit to eight the number of accumulated credits or replays that may be played at one time and which may award free replays or paper coupons that may be exchanged for prizes or merchandise with a value not exceeding ten dollars ($10.00), but may not be exchanged or converted to money. N.C.G.S. § 14-306 (Emphasis supplied).
As noted, the 1993 amendment makes clear that the lawful operation of the machines no longer depends upon the skill or dexterity of the player, or must be based upon the skill or dexterity of the player. The lawful operation of the machines must only involve the use of skill or dexterity. What the General Assembly clearly intended to do, and in fact did was to lower the skill or dexterity standard involved in the lawful operation of these machines from skill or dexterity being, as the Collins Court put it, the "dominating elements that determine the results of the game," to simply involving the use of skill or dexterity.
Collins is no longer controlling when determining whether a video poker machine is a legal machine as defined in the second paragraph of N.C.G.S. § 14-306. In order to be exempt under our present law from the definition of an illegal slot machine, the video poker machine must satisfy each of the following statutory criteria:
- The machine must be "used for amusement;"
- The players ability to make varying scores and receive coupons must "involve the use of skill or dexterity;"
- In actual operation, the number of accumulated credits or replays that may be played at one time and which may award free replays or paper coupons that may be exchanged for prizes or merchandise is limited to eight; and
- The coupons or credits that a player can accumulate in a single hand (game) may not be exchanged for cash and may not be exchanged for merchandise having a value greater than $10.00.
Video poker machines or other slot machines that satisfy all four of the above-stated criteria are exempt from § 14-306's definition of "illegal slot machines," and are therefore legal.
Should you have any other questions, please feel free to contact us.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General