July 1, 1999 

Barry Cogburn 

5 18 E.'Prairie Grove 

Guthrie, OK 73044 

Re: Pot of Gold game 

Dear Mr. Cogburn: 

On November 13, 1998, you presented a live demonstration of the Pot of Gold game at 

/ your offices. It is your position that the game is a game of skill. 

'ncu 

Following the demonstration, we advised you that, based on what you showed us, we 

believed that the game was one of chance and not a skill based game as you asserted. In addition, 

we advised you that we had under review another game, Challenger 9, whose manufacturer also 

asserted'that it was a skill game. We advised you that once our opinion on Challenger 9 was 

issued, it would give you hrther guidance. 

Enclosed for your review is our recent classification opinion on the Challenger 9 game. 

As noted, there does not appear to be a basis for assertions that reel stop machines are skill 

games. S-L &h@ 

Maria Getoff 

Attorney 

Enclosure 
Ron Nolte, President 

Broward Vending, Inc. 

124 East Main Street 

Norman, OK 73069 

Re: Challenger 9 Game Classification Opinion 

Dear Mr. Nolte: 

This letter is in response to your inquiry as to whether the Challenger 9 game is a game of 

skill or a game of chance. Our opinion is based on the following: a live demonstration of the 

game at our office; materials submitted by Broward Vending, including the game's "source code" 

or computer program; the expertise of Dr. Robert Kennedy, Human Factors Expert; the expertise 

of Robert W. Sertell, Gaming Devices Expert; and the expertise of Gaming Labs International, a 

w game testing company. All three experts tested and reviewed Challenger 9 gaming machines 

provided directly to them by Broward Vending. We conclude, based on a thorough review, that 

it is a game of chance and, therefore, a class IIl gambling device that may only be legally played 

on Indian lands pursuant to a tribal-state compact. 

Background 

The Challenger 9 game is a modified version of the "Reels of Skill" game which was also 

manufactured and distributed by Broward Vending, Inc. The "Reels of Skill" game was the 

subject of administrative litigation before the NIGC, in which it was found to be a game of chance 

and therefore a class I11 gaming device pursuant to NIGC regulations.' Subsequent to that 

decision, Broward Vending, Inc. made several modification to the Reels of Skil; game in an 

attempt to alter its basic character such that the NIGC would find that it did not contain a 

substantial element of chance and therefore was a video amusement game, or game of skill and 

' See, In the Matter of Choctaw Nation of Oklahoma, et. al., Decision and Order of the 

National Indian Gaming Commission, dated July 24, 1998. Respondents appealed this decision to 

the United States District Court for the District of Columbia but voluntarily dismissed their appeal 

after the Court denied their Motion for a Temporary Restraining Order. Choctaw Nation of 

Oklahoma. et.al. v Janet Reno. et. al., Civ. No. 98- 1562 (D.C.D.C. 1998). 

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1 

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Brov~ard Vending represented thzt it ril~de several key cliznges to the "Reels of Skill" 

game and maintained that certain features were not present in the game.3 These representations 

and assertions were made during the live demonstration at NIGC offices on September 2, 1998, 

and again in a written submission by Broward Vending to the NIGC dated September 10, 1998. 

A summary of the relevant representations is as follows: 

1. The "all stop" button was removed, and the player now has the ability to stop each of 

the nine reels, one at a time; 

2. The machine contains no feature which serves to introduce random elements; 

3. The game includes no retention ratio; and 

4. The software anomaly found in the "Reels of Skill" game, which caused the order of 

the icons to change randomly, has been removed. 

It is important to note that Broward Vending, Inc. designed the Challenger 9 software 

from the ground up. The Reels of Skill game, in comparison, was developed by Broward 

Vending, Inc. based on the source code and software program from the "Cherry Master" game 

manufactured by a company called DYNA. During the Reels of Skill litigation, when it was 

.I - revealed that the game would randomly change the order of the icons presented to the player, 

Broward Vending, Inc. claimed ignorance of this feature. Broward Vending Inc., as the sole 

developer of the Challenger 9 game, can make no such claim regarding any feature found to exist 

in Challenger 9. 

Game Descri~tion 

The Challenger 9 game is similar in outward appearance to an 8-liner slot machine. It 

consists of a cabinet containing a video screen, dollar bill acceptor, ticket printer (for dispensing 

The NIGC has jurisdiction over class I1 and class I11 gaming, which are defined in the 

NIGC regulations at 25 C.F.R. part 502. A game of skill would not constitute gambling and 

therefore does not fit within either definition. 

At the beginning of the evaluation period, Broward Vending supplied a lengthy print-out 

of the software source code to the NIGC which we provided to our experts. In reviewing the 

printed source code and comparing it with the operation of the game itself, our experts 

determined that none of the code commands that were specified in the source code print-out 

could be actually located electronically at the specified address within the game's computer chip. 

Broward Vending then notified the experts that the paper print-out was for an earlier version of 

the machine, not the actual machine submitted by Broward Vending for testing. 
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,v~i~doii~s, a1-i 2i1ged in a 3 x 3 pattern Arranged on the Cront of tile r,~;cliine are SIX buttons the 

start butron, the pIa3r points button, two stop buttons, an informstion button (list~ng points 

awarded for winning combinations), and an instruction button 

A sequence of 8 1 icons (27 icons repeated 3 times)%f various shapes and colors appears 

in each of the nine windows, and, when the game is in play, the icons simulate a rapidly spinning 

reel, moving through the 27-item rotation in 1.8 seconds allowing 67 microseconds per icon5 

On the right side of the screen, a menu indicates how the player may obtain bonus play on the 

machine. The player may wager variable amounts of points usins the play points button, receiving 

credits for winning patterns of symbols on these lines and losing credits when the winning symbols 

do not line up in a winning pattern. 

To play the game, the player inserts money into the bill acceptor. Credits are given and 

appear on the screen numerically. The player must wager at least eight points, or one point per 

line, and may wager up to 32 points to play each game. One credit, or point, costs 5 cents. The 

player must wager at least eight points. Therefore the minimum cost for each game is 8x5 or 40 

cents. Once sufficient points are applied to the play of the game, the player may depress the 

"START" button to begin play. Once the "START" button is activated, the nine reels begin to 

rotate in a top to bottom simulation of mechanical reels spinning. 

There are nine independent windows spinning in a fixed pattern of 27 symbols. The 

I premise is that reels continue to spin until the player activates the "STOP" button, at which time 

the first reel stops on a symbol on the video reeL6 The second reel begins to spin until the player 

' Throughout the entire evaluation and testing period, Broward Vending represented to 

the NIGC and its experts that the game's software contained a sequence of 27 icons in a 

continuously repeating sequence for each of the 9 windows. However, actual examination of the 

software code for the game revealed that the 27 icons were repeated 3 times in the software, for a 

total string of 81 icons. This difference in the game's software is significant because it would be 

very easy to modifjr the program such that a new icon could be introduced at number 8 1 in the 

sequence, thereby reducing to chance of stopping a reel on that icon from 1 in 27 to 1 in 8 1. If 

there is one jackpot symbol on each reel the odds of winning a jackpot on a 27 icon reel are 

27x27~27=19,683 to 1. On a reel with 81 icons, the odds are 8 lx81x81=53 1,441 to 1. When 

presented with this finding, Broward Vending agreed that the program contained a string of 8 1 

icons., 

Broward Vending, represented to the MGC, both at the live demonstration and in its 

September 10, 1998 submission, that the 27 icons pass through the window in 1.5- 1.6 seconds. 

Dr. Kennedy determined that the 27 icons pass in 1.8 seconds. 

6 As discussed later, we found that occasionally the first reel will stop by itself, without 

any player input. 

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but~on uritil 211 rme eels have stopped i nc object of tl:e game is to m~tch thee ;like symbols in 

a row, sirdlar to tbc game of tic tac toe \irI:cn all like reels have stopped, the game evaluates 

the symbols on the nine reels and issues points for any winning combinations Points displayed to 

the player may be used to play another game, or cancelled by depressing the "TAKE SCORE" 

button If the player presses thls button, all credits, or points, are transferred to a paper voucher 

dispensed by the device 

Applicable Law 

Under the Indian Gaming Regulatory Act (IGRA), Class I11 gaming is defined as "all 

forms of gaming that are not Class I or Class I1 gaming." 25 U.S.C fj 2703(8). NIK regulations 

define class I11 gaming to include, among other things, "any slot machines as defined in [the 

Johnson Act at] 15 U. S.C. 5 1 171(a)(l) and electronic or electromechanical facsimiles of any 

game of chance." 25 C.F.R. tj 502.4(b). h4GC regulations hrther define electronic or 

electromechanical facsimile as "any gambling device as defined in 15 U.S.C. 1171(a)(2) or (3)." 

Therefore, the question of whether Challenger 9 is a class III game depends on whether it fits 

within one of the three categories of gambling devices identified by the Johnson Act. The 

definition of a gambling device relevant to this inquiry is as follows: 

[A]ny other machine [other than a slot machine] or 

mechanical device (including, but not limited to, 

roulette wheels and similar devices) designed and 

manufactured primarily for use in comectio3 with 

gambling, and (A) which when operated may deliver, as 

the result of an application of an element of chance, 

any money or property, or (B) by the operation of which 

a person may become entitled to receive, as the result 

of the application of an element of chance, any money or 

property. . . . 

15 U. S.C. 5 1 171 (a)(2). Because the Challenger 9 game does not dispense money or property, 

but dispenses a paper receipt redeemable for a prize, we analyze the game under the elements of 

(B) above. These elements are commonly referred to as consideration, chance, and reward. ' 

7 Broward Vending eliminated one feature of the game, the "knockoff' switch", which 

was relied on in the "Reels of Slull" case to determine whether the game was designed and 

manufactured primarily for use in connection with gambling as required by the Johnson Act 

definition. The removal of this feature does not alter our opinion that the games, both "Reels of 

Skill" and Challenger 9, were designed and manufactured primarily for use in connection with 

gambling. tl 1r 
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;:lzj.cl ,ll~~~t pay to use the maclune end, IE succ~ssfd, ill win 2 prize or reward Eroward 

?Icndi~,g does not dispute this The theory on which Browzrd Vending has offered Challenger 9 

is that a player can influence the outcome of the game by acquiring skill and that the element of 

chance is absent The degree of chance required to fit a game within the Johnson Act definition 

has not been uniformly articulated by the courts However, one court has held that. 

Where a substantial element of chance is involved, it appears to us that the 

fact that skill in operating the particular machine is helphl in attaining the 

end sought does not take the machine out of the type defined by the [Johnson Act]. 

With regard to the machines herein [so-called "digger" machines] there is 

at least an element of chance involved.. . 

U.S. v. 24 Digger Merchandising Machines, 202 F.2d 647, 650 (1953). 

Discussion 

As referenced above, Broward Vending Inc. made several modifications to the Reels of 

Slull game previously determined to be a class III gaming device. It is not necessary to address 

all the relevant features of the Challenger 9 game that remain unchanged fiom the Reels of Skill 

game. Consequently, this opinion addresses only those material changes made to Reels of Skill 

that the NIGC deems relevant to the inquiry of whether the resultant Challenger 9 game is a class 

I~~~~ III gaming device. 

The first relevant change made was removal of the "all stop" button fiom the Reels of 

Skill version, which had allowed a player to press one button to stop the movement of the icons in 

all nine windows simultaneously. The game now allows the player an ability to stop each of the 

nine reels individually, one at a time. This change does not materially alter the game fiom its 

original version and, more specifically, has no impact on the substantial element of chance present 

in the game. 

Dr. Kennedy performed tests with human players on two Challenger 9 machines. He 

observed that there was no improvement in performance over time. He concludzd based upon 

recognized theories of skill acquisition that the game is a game of chance and not one that in the 

course of play makes use of human skill. 

Even with the removal of the "all stop" button, there remains an order of 27 icons spinning 

at such a fast rate of speed that virtually any opportunity for a player to interject skill into the 

outcome of the game is eliminated. Broward Vending's assertion that learning to exercise the 

stop control is within normal human capability, and will permit the skilled player to control the 

outcome of play, was substantially undermined by Dr. Kennedy's testing. 

It is noteworthy, though not critical to our findings, that a previously undisclosed feature 
.c~wr. . ,,I I t ,C7.i,.. ( L-IL.~ L-L\.~IZ LL LI '.-la-, I ~J.J.C.L.,Z,..~ LuL.1 \<.L L 'JLL~U L I'L LLIC 

otatlon sp~cd of tfic rcels would increase zs the plzyer v\la~icd a!snger t~me to prcss the stop 

mtton A tcst using slow-speed video playback co~~rmed thisThe rate of speed of the icons, 

developed solely by Broward Vending and represented by Broward Vending to be a constant 27 

icons per 1 5 seconds, actually is not constant AS a player studies and contemplates the icons, in 

a htile effort to memorize the order of the icons as they spin past, the speed at whch the icons 

pass through the window increases, hrther defeating attempts by the player to concentrate and 

memorize the order This tends to validate Dr Kennedy's observation that there was no 

improvement in performance over time, nor would such improvement be likely 

Additionally, we note that while Broward Vending represented that all 9 reels will spin 

indefinetely until the player pushes the stop button to stop each reel, our testing revealed that the 

first reel will occasionally stop by itself, without any opportunity for player input. This certainly 

causes the machine to deliver an unpredictable outcome to the player. 

The second representation made was that the machine contains no feature which serves to 

introduce randomness into the game. To the contrary, however, we found that the machine is 

programmed to perfi-om in a random manner. Slow motion videotaping of the reel spin and stop 

sequence revealed that, after the "STOP button is activated, the reel continues to spin in the 

correct sequence of symbols and stops after a few symbols have passed. However, the number of 

symbols that pass before stopping varies with each reel stopped. The range of symbols passing 

varies from 2 to 8. 

' 

Review of the source code developed by Broward Vending, Inc. indicates that this feature 

is under the deliberate control of a mathematical data table programmed into the source code. It 

introduces a constantly changing element of unpredicability into the player's attempt to employ 

skill in the stopping of the reels. We cannot envision a human piayer who could observe the 

varying stopping outcomes and figure out and then memorize the alternating values contained in 

that data table. 

While this feature hrther interjects randomness into the play of the game, this feature was 

not present in the Reels of Skill game, and consequently was not relied upon in the NIGC's 

determination that Reels of Skill was a game of chance. Challenger 9 is a game of chance with or 

without this feature. 

The third representation made by Broward Vending, Inc. is that the game has no retention 

ratio. Our testing has revealed otherwise. A mathematician at GLI was asked to examine the 

payout table of Challenger 9, together with the source code provided by Broward Vending, and to 

compile a standard slot machine type payout percentage sheet. He did so and discovered that 

Challenger 9 has a mathematical retention ratio which is dramatically in favor of the "house". 

Therefore, it will retain a fixed percentage of all mo~es inserted over the mathematical cycle of 
The fina! relevant change made by Eroward Vending was the removal of the anomaly 

found in the "Reels of Skill" game, which caused the order of the icons to change randomly. 

Our testing has revealed that this representation is correct; the order of the icons does not 

randomly change on the Challenger 9 game. However, the correction of this feature does not 

alter our opinion that the game is a gambling device. In the Reels of Skill administrative 

litigation, the Recommended Decision of the Presiding Official, which was adopted in relevant 

part by the MGC in its Decision and Order, found that "even without the anomaly, there was "an 

element of chance in the operation of the game sufficient to render it a gambling device." In the 

Matter of Choctaw Nation of Oklahoma. et, al., Recommended Decision, dated June 29, 1998. 

Based on the foregoing analysis, we find that games of this type, and Challenger 9 in 

particular, introduce a substantial element of chance into the play of the game. The changes made 

by Broward Vending do not alter the basic character of the game which involves icons spinning at 

a fast rate of speed and a player relying on chance rather than "skill" to obtain a winning 

combination. 

Conclusion 

We find that the Challenger 9 game is a Class JJI game under IGRA and may be played 

IawfUly on Indian lands only pursuant to a tribal-state compact. 

-' 

By letter dated June 16, 1999, John Bailey of Broward Vending advise6 the NIGC that 

your company has reintroduced Challenger 9, in several versions, to Indian Country. Please be 

advised that, unless offered pursuant to an approved tribal-state compact, I will recommend 

issuance of a Notice of Violation for this play at each location. Any current operation of the 

game on Indian lands not conducted pursuant to a tribal-state compact must cease immediately. 

Furthermore, the June 16, 1999, .letter states that: 

In our ongoing endeavors to produce a chance-fiee video game for prizes, we have 

pursued continous software development and at this time have in our inventory several 

more recently developed versions with artwork and stop delay features that differ fiom 

8 It is interesting to note that the payout percentage table compiled by GLI shows that, as a 

player inserts more coins into the machines, the chance of winning actually decreases. For 

instance, when one coin is inserted, the payout percentage is 119.46%, however with the insertion 

of 18 coins, the payout percentage decreases to 59.32%. By way of example, New Jersey law 

requires slot machines to pay out at least 83%. We are aware of no regulatory jurisdictions 

which would authorize a game where payout diminishes with the insertion of additional coins. 

Certainly, a player who is playing a purported "skill" game should be guaranteed tlldt his chances 

will get no worse the more he plays. 'II' 

7 
Because we find that Challenger 9 is a gaming device which contains a substantial element of 

chance, any changes made to the game which are not relevant to the element of chance would not 

alter our opinion. Moreover, the MGC does not expect to undertake flrther review of any 

subsequent versions of the Challenger 9 game for purposes of issuing hrther advisory opinion as 

we cannot conceive of a way to mod@ a reel stop game of this type to eliminate a substantial 

element of chance. 

If you have any questions regarding this opinion, please contact Maria Getoff, Attorney, at 

(202) 632-7003. 

Barry W. rando on 

General Counsel 

- cc: Kevin DiGregory, U. S. Department of Justice 

Jim Simon, U. S. Department of Justice 

Leslie Singer, U. S. Department of Justice 

Steve Wasserman, U.S. Department of Justice 

Edward Passarelli, U. S. Department of Justice 

Bill Lewis, Texas Attorney General's Office 

Janet M. Henthorn, Office of ~on~rissman J.C. Watts 

All Oklahoma Gaming Tribes 

John Bailey, Broward Vending, Inc. via telefax