Elaut USA Takes Jersey Jack Pinball To Court / ASCAP Renews Targeting of Arcade Venues

arcadehero February 3, 2015 8
Elaut USA Takes Jersey Jack Pinball To Court / ASCAP Renews Targeting of Arcade Venues

Well this is a great way to start February (while rolling my eyes). Fortunately I will have a new venue story up soon, as soon as I get some more details about it. In the meantime:

Elaut USA Vs. Jersey Jack Pinball – First off, an intra-industry lawsuit. It hit the newswires yesterday that Elaut, maker of very high end crane machines and some other electro-mechanical games has filed a lawsuit in the State of New Jersey against the former CEO of the company Jack Guarnieri, the former CFO Michael Carle and the company of Jersey Jack Pinball. Their claim is that more than $1.6 million was diverted from Elaut’s coffers to Mr. Guarnieri and the JJP company using “accounting tricks”. Given it is now a live lawsuit there isn’t much commentary coming along, except for this which Mr. Guarnieri gave to Replay Magazine (it should also be noted that he is a contributor to Replay Magazine, much like myself but I have no connection to Mr. Guarnieri otherwise):

“I left the employ of Elaut USA more than three years ago.  The complaint alleges that I, while employed at Elaut USA, took money for myself and for Jersey Jack Pinball, Inc., to which I was not entitled.  I have categorically denied these allegations in response to this complaint, and I categorically deny them now.  The complaint is utterly without merit. I intend to vigorously defend this matter and anticipate that when the truth emerges, I will be fully vindicated as to each and every allegation.”

As for what this will mean, it depends on how it shakes out. I still think innocent until proven guilty is what should lead anything, given the tendency of social media to drive witch hunts. All we know for sure in regards to JJP right now is that they have yet to release The Hobbit Pinball which was supposed to release in December. At trade shows I hear whispers of financial problems for the company but without evidence that is all conjecture. Defending a lawsuit though is not free but they also can take years to sort out. For now we will just have to wait and see.

ASCAP Back To Targeting Arcades – ASCAP might sound like something that can be badly misinterpreted in any number of ways but they are the 800lb juggernaut of the music entertainment industry, making patent trolls look tame by comparison of how they go about the court system, making a habit of attacking small entertainment venue owners who do not have the resources to fight back.  They gained some infamy by trying to collect fees from mobile phone providers for ringtones played in public; the last time they were busy bothering people making an honest living in the arcade industry was going after arcade operators with a Guitar Hero Arcade on site trying to get licensing fees. This ended up making sure Guitar Hero Arcade was removed from production and from some locations that did not want to fight it; Raw Thrills had plans to expand on GHA with more hardware (a drum set add-on) but the fallout of the situation led to the cancellation of those ideas.

Well, ASCAP is back, with arcades in their crosshairs once again.Now they have broadened the scope beyond just a title like Guitar Hero to include everything that plays music from any band on their list (which is not obscure by any means). They have sent a letter to Arcade Odyssey in Miami, FL detailing the demands, here is what the owner of AO, Rick Medina shared about it:

I thought this might be of interest to all arcade owners out there, I just got a rather interesting email from ASCAP – THE AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS – basically they are arguing that I cannot have a dancing game, pinball or any arcade machine that plays any music from any artist listed in their huge repertoire without paying them a royalty per year, I mentioned that these songs were licensed for the machines in order to be used in an entertainment venue, but he insisted that you can only listen to the music in those games if you have the arcade machines in your home or private residence and not in a business. I have reached out to stern and Andamiro since those were 2 that he had mentioned to see what their legal depts. come back with, I will keep all of you posted since it looks like a witch hint may be developing and I expect many other arcades will begin to receive similar letters shortly. Funny how all of this has started because we hosted a K-pop event around the Andomiro machine for the gamers to come and play around it on that day, and they mentioned that also, shame on me for doing something so low and underhanded like that.

Why was Stern mentioned? Because of music pinball games like AC/DC, Metallica or The Rolling Stones of course. I do not see how ASCAP has a strong case as all operators are under this impression when they buy a game with a license that the license covers that particular operation including imagery and music. When I have discussed licensed music with game developers before, they foot the bill for that and work things out with the label or artist to their satisfaction. This places arcades in a similar boundary as movie theaters, where those are exempted when a movie will play a song because it is licensed by the studio. ASCAP supposedly exists to facilitate musicians getting paid for their work but if that angle is already resolved by the content creator/developer, then it should be a resolved point. ASCAP getting their way on venue fees in this manner would mean ‘double taxation’ is at play (and that’s not including any local taxes/fees some ops have to pay because their city or county levies such fees just for owning a machine). On top of that, arcade and pinball games are not jukeboxes (the music can be cut off when the player dies or loses a life/ball, depending upon the game) and in any public arcade, the sound from one game is going to be blending with the constant cacophony that the rest of the games generate.  If we use a venue like AO as an example, it’s like having 60 radios going on at the same time, plus the chatter of the customers. It is not the same thing as a nightclub or a restaurant with a jukebox where one song at a time is pumped out over loudspeakers to drive the mood.

Given that there are some trade organizations out there that are supposed to protect the industry from a legal standpoint – AAMA, AMOA, DNA Association – I imagine that this is an area where they can get involved so that it is not just single ops out there fending for themselves. Hopefully things end up on the beneficial end for our industry once the dust settles.

What are your thoughts about all of this?


8 Comments »

  1. Jordan F February 3, 2015 at 2:52 pm - Reply

    I honestly wouldn’t put it past Andamiro to have skipped over licensing Pump it Up songs for public use. It wouldn’t be the first time they’ve messed up with music licensing.

  2. Toby February 3, 2015 at 2:53 pm - Reply

    That’s insane! A music license should be all that you need.

  3. membrane February 3, 2015 at 4:06 pm - Reply

    Posted to hacker news, where they hate ascap. https://news.ycombinator.com/item?id=8994129

  4. Sara Zielinski February 3, 2015 at 5:34 pm - Reply

    That is insane, the game was obviously meant to be put in an arcade and play music to attract the customers. There are a lot of DDR machines around and they make a lot of money for the arcade owners as there is still a good DDR machine scene out there.

  5. swampy February 4, 2015 at 6:48 am - Reply

    ASCAP is pure scum. When I was in the business, I had to pay a license fee for each jukebox I had. That didn’t stop ASCAP from sending threatening letters to the owners of the locations where my equipment was installed. A couple of the locations were paid visits by ASCAP goons, and I got a few frantic phone calls. I told them to point to the license tag on the jukebox and to tell the goon to go pound sand.

    They’re extortionists, pure and simple.

  6. voltz February 5, 2015 at 11:37 pm - Reply

    unreal…

    This is exactly the kind of reasoning why I keep telling people the RIAA and their ilk needs to be abolished.

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