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A woman got pulled over for speeding by a California Highway Patrol motorcycle officer.
When he walked up to her window and opened his ticket book she said, "I bet you're going to sell me tickets to the Highway Patrol Ball."
He replied, "No, Ma'am, highway patrolmen don't have balls."
There followed a moment of silence while she smiled and he realized what he had said. Without saying another word, he closed his book, got back on his motorcycle and left."
Be clear and simple.
djechlin's answer here, and an interesting Snopes article explain the psychological and social dimensions of the double meaning in the punchline. But the basic situation, the underlying meaning of "buying tickets to the Policeman's Ball", rests on some cultural presuppositions which these don't explain.
From the end of the 19th century forward it became common to raise funds for the families of fallen police officers by selling tickets to an annual "Policeman's Ball", an evening of dancing and drinking.
Such tickets were of course sold by officers to residents and businesses on their individual beats; and where the police were corrupt, this became an instrument of extortion: police offered "protection" not only from criminals but also from legal prosecution in return for the purchase of tickets—and many simply pocketed the proceeds, or shared the proceeds among cooperating officers.
Eventually, when automobiles became common, this shake-down system was extended to traffic offenses: motorists could buy their way out of court appearances (and out of the associated 'points' which might lead to having their drivers licenses suspended, and would certainly lead to higher premiums for their automobile insurance) by paying the officer who stopped them, the whole being spoken of euphemistically as the innocent and indeed praiseworthy act of "buying a ticket to the Policeman's Ball."
I had seen Dad get nabbed […] when the family drove me to Cleveland to report to the Indians during my high school vacation in the summer of 1936. A cop pulled us over in Indiana for breaking the speed limit.
He walked up to the car and asked Dad, “Would you like to buy a couple of tickets to the Policeman’s Ball?” Dad said sure. He knew what he was doing. He rather have them instead of a speeding ticket.
Dad bought the tickets and we headed to Cleveland, hundreds of miles from the site of the Policeman’s Ball.
—Now Pitching, Bob Feller
So when the lady says "I bet you're going to sell me tickets to the Highway Patrol Ball", she is in effect offering to bribe the patrolman.
The patrolman declines the bribe with the words "Highway patrolmen don't have balls"—meaning literally that the CHiPs don't sponsor such an annual fundraiser and figuratively that CHiPs are incorruptible.
Unfortunately (as the comments have told you) his words also bear a third sense: that highway patrolmen have no balls = "testicles". When he realizes what he has said the patrolman is so embarassed he simply closes his book (of 'tickets' or summons forms) and walks away.
A ball is a type of fancy party, and it's common that prestigious organizations, say all Los Angeles police officers, will hold one every year. The woman was just trying to get the man to say "Highway patrol officers don't have balls." There is some sarcasm in that being a highway patrol officer is not a prestigious job. The man chose to respond to this insult literally, as the woman baited. But mostly her line is just setting the man up for the punch line. It's more similar to the joke:
A: Can you get me an updog?
B: What's updog?
A: Not much, you?
He takes the bait and says
No, Ma'am, highway patrolmen don't have balls.
"Balls" is slang for "testicles," and implies both masculinity and bravery, i.e. "to have the balls to do something (scary)".
The man felt embarrassed for saying this and rather than write her a ticket, he chose to leave. I think the joke is misogynist in the sense that it's even more embarrassing or unusual for a woman to trick a man like this than if another man did it.
It is well-known that police officers have discretion to give the pulled over person a warning, a ticket, or just ignore the situation entirely. Some perceive this as corrupt, and there are many American jokes that take advantage of the fact that the police officer can somehow be "defeated" by a display of wit.
