Ohio Technical Standards
No Transition Period, Equipment Certification & Other Nightmares
by Tom Fricke
Editor’s note: In Tom Fricke’s Redemption & The Law column, he has been following the developing changes in Ohio law he feels are profoundly threatening to coin-op and its locations. Writes Tom, “In 2014, the Ohio General Assembly enacted a law that appointed the state’s Casino Control Commission as the statewide cop of all ticket redemption and merchandisers. The law required the Commission to make regulations to govern all forms of skill games for prizes.” In the July 2014 Redemption & the Law, we reported this development under the headline, “Ohio Declares War on the Industry.”
The Commission didn’t begin publishing regulations for industry and public comment until August 2016. Tom reported on these in his November 2016 column, “You Are Going to be Regulated, Like It Or Not,” in which he published an announcement of the rulemakings, an explanation of the public comment process and a guide for those who want to engage in the rulemaking process as commenters.
In recent issues (February, March and April) and again this month, Tom Fricke continues his indepth examination of what is being proposed and how it threatens the amusement business in Ohio and beyond the state line. Tom’s previous pieces are available on line at www.replaymag.com/category/currentissue/tom-fricke-redemption-and-the-law.
When the draft regulations of the Ohio Casino Control Commission become effective, locations, operators and vendors will have to be licensed. There will be a transition period where companies that are supposed to be licensed will be allowed to “slide” for a while if they apply for a license and submit to the Commission information about themselves, such as complete inventories of their equipment system, their locations and from whom they buy or obtain their game equipment.
Well and good. But there is no provision in the draft regulations for a transition period about the game equipment itself. In their current form, the draft regulations say:
“••• [N]o [merchandiser or ticket redemption game machine]or game-related technology shall be used to conduct ••• skill-based amusement machine gaming unless a certified independent skill-based amusement machine testing laboratory concludes that the item at issue complies with Chapters 29151 and 37722 ••• and the rules adopted thereunder and ••• has been approved by the Commission.”
No transition period. In the casino business, there are very detailed technical standards. For example, the standard normally employed for random number generators (RNGs) in casino slot machines says that the RNG must produce randomness to 99.9% statistical confidence when analyzed over a million plays under a number of statistical methods specified in the regulation. Another example is that the RNG must be a single unit. You can’t use two RNGs operating in tandem to produce outcomes.
Every U.S. casino regulator requires that before a slot machine can operate in a casino under its jurisdiction, a production sample has to undergo an engineering analysis to find out whether the game software complies with these and many other objective technical standards. When the independent testing laboratory (ITL) engineering examination yields the conclusion that the software complies with the technical standards, then the ITL’s report and certification states the sum of all the ones and zeros in the software – a “signature.” The ITL doesn’t test each and every casino slot machine. It tests just one sample. The signature stated in its report allows both the casino slot department and agents of the casino regulator to field test individual machines. If the signatures yielded by the field test match the ITL’s report, compliance with the technical standards is proved.
Not so with the Ohio draft regulations for merchandisers and ticket redemption games.
The draft regulations for these require that each and every unit be examined by an ITL that the Commission has approved. There is a sort-of free pass in that the Commission may (or may not) accept self-certification, not by locations and not by operators, but only by “vendors.” (Under the draft regulations, to be a “vendor” you have to be someone who “manufactures, distributes, sells or otherwise provides” units to an operator.)
Vendors can “self-certify” under oath by submitting to the Commission, “documentation detailing the function and operation” of their game product and “documentation demonstrating compliance with the technical standards •••” The Commission may accept the self-certification or may say, “Go to an ITL, do not pass Go, do not collect $200.”
••• But it’s worse than that. It isn’t by type or sample. It’s self-certification of every individual piece of equipment. And what would the operator have to do to obtain certification of a ten-year-old House of the Dead or Deal or No Deal? Don’t forget, this is a statewide requirement that applies to all merchandisers and ticket redemption games.
But it’s even worse than that.
ITL certification and “vendor” self-certification must establish compliance with the Commission’s technical standards for skill-based amusement machines as defined in the Ohio gambling crimes chapter. What technical standards?
Studying them can be quite a “trip” for those who have been with coin-op for a decade or two. Under the technical standards, the thing you hold in your hand when you play a puck bowler isn’t a “puck.” It’s a “Player Interaction Device, Non-Electronic.” Now you know what you’re in for.
One of the technical standards that most highlights the brilliance, insight and knowledge of the regulated field, on the part of the scrivener of the draft Ohio technical standards for merchandisers and ticket redemption, is item 3 under the standard for “game outcome”:
“Game outcome shall be solely dependent on a player’s skill.”
Never mind that there is no generally-accepted statistical or other test for this. Never mind that on occasion esteemed courts have found that contract bridge tournaments and live Texas Hold’em poker are games in which skill predominates. Never mind that subject to a few objective criteria in the statute,3 total skill is not Ohio law. Ohio law is that only a predominance of skill is required.4
Finally, to demonstrate the shabby rulemaking that we are now watching unfold in Ohio, take a look at the draft rule that will govern who can be an “Independent Testing Laboratory” that acts as the arbiter of what you can deploy in Ohio and what you can’t.
Check this out. The draft regulation about Independent Testing Laboratories says that:
A certified independent skill-based amusement machine testing laboratory shall testify at any administrative hearing or court proceeding as requested by the Commission. A certified independent skill-based amusement machine testing laboratory shall not testify at any administrative hearing or court proceeding against the Commission with respect to any matter in which the Commission has authority •••
Okay, this means that the ITL isn’t free to testify about its professional findings made independently. The “independent testing laboratory” would not be independent. Its lack of independence could render it incompetent due to bias, and therefore (at the discretion of the court) subject to impeachment in any court proceeding when offered as an expert to deliver opinion testimony that the Commission wants to present to the court. In other words, because the regulations muzzle the “independent” testing laboratory, a court could bar the testimony completely. The regulations create an independent testing laboratory that isn’t independent at all and for that reason probably isn’t competent to testify in court.
Well done, scrivener. Oy!
1 The Ohio gambling crimes chapter, including some important definitions.
2 The Ohio casino chapter.
3 (a) The ability of a player to succeed at the game is impacted by the number or ratio of prior wins to prior losses of players playing the game. (b) Any reward of redeemable vouchers is not based solely on the player achieving the object of the game or the player’s score. (c) The outcome of the game, or the value of the redeemable voucher or merchandise prize awarded for winning the game, can be controlled by a source other than any player playing the game. (d) The success of any player is or may be determined by a chance event that cannot be altered by player actions. (e) The ability of any player to succeed at the game is determined by game features not visible or known to the player. (f) The ability of the player to succeed at the game is impacted by the exercise of a skill that no reasonable player could exercise.
4 See Progress Vending, Inc. v. Depot of Liquor Control, 394 NE 2d 324 (Ohio App. 1978)
Attorney Tom Fricke specializes in the law of redemption. He has served the amusement game trade for more than three decades in various roles including in-house counsel for a national FEC chain, trial and transactional attorney for many businesses and as an expert witness on the law of redemption. Tom has also penned hundreds of articles on the subject of redemption regulation, legislation and compliance.
Redemption and the Law is commentary. It is not legal advice. It is intended only to provide useful information on the subject matter covered with the understanding that neither the publisher nor the author is engaged in rendering legal services. If legal advice or other professional or expert assistance is required, the services of a competent professional should be sought. The views expressed in Redemption and the Law are solely those of the author and not the publisher. Author Tom Fricke claims an exclusive trademark in the phrase Redemption and the Law. He can be reached by email at [email protected]; phone 314/322-9526. © Copyright, Thomas F. Fricke 2016, St. Louis, Missouri, USA. All rights reserved worldwide.