'Sweepstakes' games at Internet cafes are illegal, state high court rules

California Supreme Court decides 'sweepstakes' games amount to illegal slot machines

Computerized “sweepstakes” games that have been available in some Internet cafés in California are illegal under state gambling law, the California Supreme Court ruled unanimously Thursday.

The cafes, often located in strip malls, gas stations or convenience stores, sell time on the Internet or the telephone to customers, who then play the games.

Café owners argued the sweepstakes games were legal because the results were predetermined by computer software, not by the machines customers used.

The court said it didn’t matter because the result still amounted to chance.

When someone “plays a game to learn the outcome, which is governed by chance, the user is playing a slot machine,” Justice Ming W. Chin wrote for the court.

“In each instance, the business sold a product (either Internet time or telephone cards) and, along with the product, provided the opportunity to play sweepstakes games, with the possibility of winning substantial cash prizes.”

The ruling stemmed from attempts by prosecutors in Kern County to shut down the games. Lower courts ruled they amounted to illegal gambling, and the owners of the cafes appealed.

In the meantime, the Legislature passed a law prohibiting sweepstakes games. Gov. Jerry Brown signed it last year.

According to the American Gaming Assn., a trade group representing the casino industry, the games have been offered in 12 states and have generated more than $10 billion annually.

The group, which opposes the sweepstakes operations, said customers buy Internet access and phone cards only for the purpose of playing the games, which “closely mimic the experience of traditional slot and video poker machines.”

Twitter: @mauradolan

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