Sunday, March 30, 2014

Coin In, Coin Out

In the past year, a local convenience store in town installed two quarter-pusher machines. The lure of trading one quarter for a handful is always an attraction; but the real draw is the possibility of pushing over a $20 bill-- or a phone card. I first tried this machine with the intent of winning a $20 bill. I didn’t get it, so I stayed away from the electronic bandit, until I came back yesterday with a strategy- win in the short term, then get out. While waiting for the train, I tried it, getting ahead by $1.25 before setting for a $.50 win. In the evening, I sought to repeat my success. No luck (or “outlet for skill”) on either of the two machines: I was $3.00 in the hole. So I decided that the machines were rigged for the house, and I would stay away from those quarter-pushers- unless I was the “house”. But what states allow these quarter-pushers, anyway? On many issues, from raw milk, to first-cousin marriage, to lane-splitting by cyclists, you can find an illustrated map demonstrating state laws. No such map exists for the legality of quarter-pushers (coin-in, coin out). I quickly discovered the reason: the legality of such machines is regulated by states, counties, and down to the town level. At one time, they were prevalent in the resort towns on the Mid-Atlantic shore (Maryland, Delaware, New Jersey and Coney Island, New York). Laws and enforcement have changes. So have the profit motives: States with casinos were most likely to ban common businesses from operating the machines. As a result, some of the more ‘puritan’ states view it more favorably than the pro-gambling states. In more than one case, I read that, even if you have a vending permit for the machine, you could still be running afoul of state law. What did I discover when trying to make a map of my own? The easiest way to determine legality was by reading news articles regarding confiscations of quarter pushers. News articles were most prevalent in Arizona, California, and West Virginia. In many cases, I discovered that the machines flew under the radar, until the local sheriff’s office received a handful of complaints. Because of the localized nature of these laws, the makers and dealers of these machines do not post information (lest they become liable for a customer’s machine being confiscated); instead, asking customers to do their own research. State/ Legality Kansas- Not legal anymore California- No Florida- Iffy; some local sheriffs consider it a game of chance, not skill. Alabama- Not clear-See Code Section 13A-12-76, Bonafide Coin-Operated Amusement Machines. Ohio- Not clear- See Section 2915.01, Gambling Definitions. Wisconsin- Has tolerated establishments operating up to 5 of these machines. Arizona- No Oregon- No Texas- No, but tolerated by some county Sheriffs. Indiana- No South Dakota- No Tennessee- No Missouri- Contradictory laws Minnesota- No West Virginia- Not anymore North Carolina- No Georgia- See Title 48, Section 48-17-1 Virginia- 1992 decision by State ABC allows machines in bars, equipped with both a skill stop and shooter. Did not find a more up-to-date decision. New York- Not allowed in New York City; operating 1-2 machines does not constitute intent of “advancing unlawful gambling) Penal Code, 228.35 So if our local convenience store happens to be running afoul of Nassau County law, at least they won’t be charged with running a gambling ring. In most cases of enforcement, the penalty is simply confiscation of the machines. And, reading online forums, some owners of the machines are willing to play this cat-and-mouse game. Why? The machines are so darn profitable.

Saturday, March 1, 2014

The Loan: Think about it.

Yes, it's been 6 weeks since my last post. I am aware of that. In the meanwhile, February came and went, all 28 days. Of much discussion as of late in the USMMA conversation sphere is "The Loan". The travelling salesmen- or, representatives,- from USAA will be on campus this month to give loans. With USAA, it's do-or-don't. Your next opportunity to borrow from this bank is in November. So USMMA Juniors should be giving some thought to their financial side. And why does this matter? USAA and Navy Federal allows a select group of 20-year-olds to borrow $32,000 at a low interest rate. (1.25% at Navy Federal, and 0.75% at USAA). There is a rhyme and reason for this: When Mids and Cadets at the other Service Academies graduate, they incur moving and living expenses for their first "duty station" before their junior officer pay begins. This is where "Career Starter Loan" gets its name. How can the interest rate be so low? Because of the service requirement at four of the Academies, and at USMMA, the maritime employment requirement. Also, graduates entering the armed forces who take the loan are registered for an "allotment deduction", insuring that USAA or Navy Federal gets their payments on time. While USAA has the lower rate, Nsvy Federal allows Mids take the loan on-demand after starting Junior year. You walk in, and identify yourself on a short form. Signature loan; it takes less than a week to clear. Another benefit to some is that Navy Federal has brick-and-mortar locations around the world (Guam, Japan, Bahrain, anyone?), and most Mids use Navy Federal as their primary bank (credit union). For the large strata of students who live between above the Pell Grant cutoff and comfortable living, there are immediate benefits to taking the loan. This includes plane tickets home for major holidays, the ability to purchase a car, and the ability to stop worrying about being short on cash. While plebe year is the most expensive year fee-wise, Senior year is where the expenses add up: Class ring-- an essential for Deck majors to knock on doors when they choose to work shoreside; Ring Dance, and Graduation Weekend*. From anecdotal evidence, a majority of Mids take the loan in order to finance Senior year. High school job money stretches only so far. * Parental generosity maximizes at this point. It usually declines hereafter. That said, there is no stipulation on how a midshipman spends the loan money. I have crafted itineraries that blow $30,000 in a 3-day weekend (Hint: first-class flight to Europe, party there on Saturday Evening; then fly to Bangkok, and do the same on Sunday evening; then fly back to New York, washed-up with empty pockets, a modern-day prodigal son). That scenario aside, I was informed by one Senior to budget at least $150 per week for going out on weekends. I took that advice with a grain of salt. Others take the loan to invest: For the Class of 2014, stocks were a good option; for this year's Junior Class, a safe option is to arbitrage the low-interest loan with higher-paying long-term CD's.