Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 68-94

1968-1 C.B. 511

Full Text

Rev. Rul. 68-94 /1/

A coin-operated vending machine, which requires the insertion of a one-cent coin to operate, dispenses merchandise each time a coin is inserted. However, the machine will at times, by application of the element of chance, dispense certain merchandise that entitles the person playing the machine to receive, from the person who maintains the machine at his place of business, a prize having a retail value of more than five cents, so that the machine is not within the exclusion from the definition of `coin-operated gaming device' provided by section 4462(b)(2) of the Internal Revenue Code of 1954. There is no message or legend of any kind on the machine to indicate to the customer that he will be entitled to a prize if the machine dispenses the certain merchandise.

Held , the machine, as used in the manner above, is a coin-operated gaming device within the meaning of section 4462 of the Code. It is immaterial that there is no message or legend on the machine itself informing the customer that he may be entitled to a prize.

This Revenue Ruling restates under current law the position set forth in M.T. 1, C.B. 1942-1, 279. Therefore, M.T. 1 is hereby superseded.

/1/ Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.