State v. Hahn

Court of Appeals of Wisconsin
203 Wis. 2d 450, 553 N.W. 2d 292 (1996)

ELI5:

Sections

Rule of Law:

Video poker machines are not gambling machines per se; however, they constitute gambling machines under Wisconsin statute if they afford players an opportunity to obtain value by recording the number of free replays awarded or permitting those replays to be redeemed.

Facts:

The defendant, Lester Hahn, placed video poker machines in three taverns located in Jefferson County, Wisconsin.
The video poker machines awarded successful players with free replays based on chance.
Unlike standard amusement devices, these machines internally recorded the number of free replays won by players.
Tavern operators paid successful players cash in exchange for the accumulated free replays.
After paying the players, the tavern operators used a remote control device to expunge (erase) the recorded replays from the machines.
Hahn, acting through an employee, visited the taverns to collect the financial proceeds generated by the machines.

Procedural Posture:

The State charged Hahn in the trial court with collecting the proceeds of a gambling machine, a Class E felony.
A preliminary examination was held where tavern operators testified regarding the operation of the machines.
The trial court issued a pre-trial order regarding jury instructions, requiring the State to prove Hahn knew the machines were used for gambling.
The State filed a motion for leave to appeal the non-final order to the Court of Appeals.
The Court of Appeals granted the State's motion to hear the interlocutory appeal.

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Issue:

Are video poker machines considered 'gambling machines' per se under Wisconsin statutes, such that the State need not prove specific knowledge of their use for gambling to convict a defendant of collecting their proceeds?

Opinions:

Majority - Sundby

No, video poker machines are not gambling machines per se, though the specific machines in this case qualify as such due to their specific features and operation. The court reasoned that an article capable of innocent use is generally not a gambling device unless expressly defined by statute. Under § 945.01(3), a device is an excepted 'amusement device' only if it awards nonredeemable free replays and does not record them. Because the machines in question recorded replays and the replays were redeemed for cash, they failed the amusement exception. The court held that a machine constitutes a gambling machine if it 'affords' the opportunity to obtain value, even if the machine itself does not automatically dispense the prize. Consequently, while the machines were not illegal per se, the jury must be instructed to determine if the machines possessed these specific disqualifying characteristics (recording/redeeming) to find the defendant guilty.

Analysis:

This decision provides a critical statutory interpretation of gambling laws regarding electronic gaming devices. It rejects a bright-line rule that would criminalize all video poker machines, instead adopting a functional analysis that looks at how the machine operates—specifically focusing on the 'recording' capability. The ruling clarifies that the mechanism of gambling need not be fully contained within the machine (i.e., the machine doesn't need to dispense coins); it is sufficient if the machine's features (like a replay counter) facilitate the external payout of winnings. This places a higher burden of proof on the State to demonstrate the specific features and usage of the devices in future prosecutions.

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