(CN) - The California Supreme Court affirmed a ruling that computerized sweepstakes games at several Kern County Internet cafes are illegal slot machines.
The cafes sold Internet time and prepaid phone cards and gave sweepstakes entries to customers who bought them.
Computers used software to select winners from a predetermined pool of entries. Customers could find out if they won by playing the sweepstakes games, asking an employee, or by pushing an instant reveal button on the computer.
The Kern County District Attorney filed five civil actions against five café owners in May 2102, calling the games illegal gambling and illegal slot machines under sections 330a, 220b and 330.1 of the Business and Professions Code.
The café owners claimed the sweepstakes promotions were not slot machines because winners were predetermined rather than randomly generated by the computer during game play.
The Superior Court sided with the state and granted preliminary injunctions against all five cafes.
The Court of Appeal upheld the injunctions, finding the sweepstakes games illegal slot machines under section 330b.
A unanimous seven-judge panel of the California Supreme Court affirmed on June 25.
Section 330b defines a slot machine as any device that allows a player to use money or credits to play a game of chance for a prize, regardless of whether the device has other purposes.
Justice Ming W. Chin noted that several courts have used this definition to determine that devices similar to those used in the defendants' Internet cafes constitute illegal slot machines.
The court rejected defendants' claim that the computers are not slot machines because players don't insert physical money into a slot. Playing the games using an account or PIN number or by swiping a card obtained after ostensibly buying Internet time or a phone card is comparable to putting money in a slot, the court said.
The defendants cited Trinkle v. California State Lottery (2003) 105 Cal. App. 4th 1401, which stated that using vending machines to dispense lottery tickets did not count as operating illegal slot machines.
But that case has little bearing here because the California State Lottery is authorized to sell lottery tickets in vending machines that dispense them in the order they were loaded, whereas the defendants' computer games are part of a system that "taken as a whole, operates to determine winners and losers," the supreme court said.
Arguments that the devices are not slot machines because the sweepstakes software predetermines which entries will win, rather than generating new chances to win each time the game is played, failed to persuade the Court of Appeal because players still do not control whether they win or lose, the Court of Appeal ruled.
The supreme court panel agreed, pointing out that otherwise Vegas-style slot machines would be legal, if they were programmed with software that predetermined the sequence of winners.
"As the Court of Appeal aptly analogized, 'whether a deck of cards was shuffled the day before, or at the moment the player sits down at the table and places a bet, it is still a matter of chance whether the ace of spades is the next card dealt," Chin wrote.
Claims that the defendants' devices are not slot machines because players can click an instant reveal button rather than play the game also fail for because the option to play still exists, even if it is not chosen.
Because the defendants' systems intentionally mimic the experience of playing a casino-style slot machine, and the record shows that customers bought the Internet time or phone cards primarily as a means to play the sweepstakes games, the systems therefore count as illegal slot machines under the law.
Though committee reports from recent legislation amending the Business and Professions Code state that Internet cafes offering free entries into a sweepstakes promotion are probably not operating illegal lotteries, those reports have little bearing here because the issue is illegal slot machines, not lotteries, Chin wrote.
More to the point, the "judicial, not legislative, branch interprets statutes, and a legislative belief regarding the meaning of earlier legislation has little weight. Nothing in the Legislature's recent action prevents us from applying section 330b's plain language," Chin added.
Chief Justice Tani G. Cantil-Sakauye and Justices Kathryn M. Werdear, Carol A. Corrigan, Goodwin H. Liu, Mariano-Florentino Cuellar and Leondra R. Kruger concurred.
John H. Weston with Weston, Garrou & Mooney of Los Angeles, Tory E. Griffin with Hunt, Jeppson & Griffin of Roseville and Steven Graff Levine of Santa Monica represented the defendants.
Gregory A. Pulskamp, Deputy District Attorney for Kern County argued for the People.
No one immediately returned requests for comment.
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