Colorado Springs

Slots Or Not? - Part 1

Slots or Not- Part 1

COLORADO SPRINGS, Co. - Half of all Americans play video games, and the average age is now 35, as generations that helped to explode the industry reach adulthood.

As a result, more and more arcades for adults are popping up all over Colorado, offering "skill games" that actually pay out cash if the player performs well.

The offering of cash prizes has also attracted the eyes of law enforcement, leading to frequent raids for allegedly violating Colorado's gambling laws.

Those laws, however, aren't so clear, and arcade owners claim police are the ones not playing fair.

On a typical friday night, Charlie Chedda's on South Academy in Colorado Springs is nearly full.

Players insert cash into rows of what appear to be slot machines at first glance, but owner Trey Franzoy says they're not.

"If you've every played a regular slot machine, you can just hit play.  It will spin and stop and give you whatever you won.  It's just a pure game of chance.  Whoever hit 'Play' at that particular moment time is the player that's going to win.  The way our games are different is they are a pattern recognition game.  You're having to pick the winning pattern.  Nothing is going to be given to you," he explained.

It's a similar concept at El Dorado Skill Games in Denver.

Most of the games here involve shooting fish or other targets.

Players earn credits based on the size and quantity of targets they hit.

An ad for a nearby arcade clearly promotes the business as a place to win money, but Franzoy insists people come for the entertainment value, not to gamble.

"There are very significant differences between what gambling is and what we do," he said.

Chris Howes, Executive Director of the Skill Games Association that formed in 2017, adds, "Certainly if you have a joystick and a button, and a score at the end of the game, we all know that's a game of skill."

Under Title 18, Section 10-102 of Colorado law, the definition of gambling does not include: "Bona fide contests of skill, speed, strength, or endurance in which awards are made only to entrants or the owners of entries.

Over past two years, however, the Colorado Bureau of Investigation, along with local agencies including the Pueblo PD, have raided a number of arcades, including "Rush Coffee" downtown, seizing their fish games along with all the cash found inside.

Franzoy's Charlie Chedda's was raided in August of 2015, and Trey was charged with "Unlawful Offering of a Simulated Gambling Device."

That law, 18-10.5-102, was passed in 2015 in response to internet cafes popping up that allowed players to enter online sweepstakes games, but the definition doesn't specifically include language regarding games of skill.

As a result, when Franzoy's criminal case went to court, a judge threw it out, saying the law was "unconstitutionally vague", that "a reasonable person would be unable to determine what conduct was prohibited", and that his games were fundamentally the same as the ones at the Penny Arcade in Manitou Springs.

The CBI, the Colorado Attorney General's office, and the Pueblo County District Attorney's office all declined to be interviewed about these raids.

The Executive Director of the Colorado Gaming Association, which represents the big casinos, says the CBI concluded that these games are slot machines.

"They went through and did a forensic analysis, tested the games, looked at how they operated internally, and came to the conclusion that they are, in fact, a slot machine," explained Peggi O'Keefe.

And so despite the legal uncertainty, the raids continue, leaving arcade owners fearful it could happen again at any time.

"Every day, every single day, we worry that it will happen again," says Tammy Garamova, owner of El Dorado Skill Games.

Franzoy adds, "I mean I don't want to say that I'm scared to walk into my own business every day, but every day I do walk in here, I'm always wondering 'What could they do to me today?'"

When prosecutors didn't get a conviction in Franzoy's case, they appealed it, and it is currently pending before the Colorado Supreme Court.

A ruling from the high court could finally clear up the gray area.

Then again, clarity might come from elsewhere first.

Colorado House Majority Leader Kasey Becker (D - Boulder) is preparing to file new legislation that would classify these skill games as slot machines once and for all.

She said she expects to file it in the next few days.

Becker, whose district includes the gaming towns of Blackhawk and Central City, admits that the state's gaming association, which represents the casino industry, had a hand in crafting the bill.

Becker says the operation of these simulated slot machines outside regulated gaming areas poses a risk to players because the machines aren't inspected and regulated like those inside casinos, and adds that the arcades are also not paying state taxes on their profits like the larger casinos.

The casino connection, however, only adds to the existing suspicion among arcade owners that the gaming towns are pushing law enforcement to carry out many of the recent raids.

Tune in Friday at 5:00 and 10:00 for Part 2 of our special report, which will cover that possible collusion.

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