People Ex Rel. Green v. Grewal
189 Cal. Rptr. 3d 686
Cal.2015Background
- Five Kern County internet/phone-card cafes sold products (internet time or prepaid phone time) and gave customers "sweepstakes points" redeemable to reveal cash prizes via on‑site computer terminals.
- External vendors (Figure Eight, Capital Bingo, Phone‑Sweeps) provided networked software/servers that prearranged finite pools of sequential entries with predetermined prize values; terminals only revealed the next entry in sequence.
- Customers obtained points by purchase but could also obtain limited free entries; playing the casino‑style touchscreen games did not consume paid internet/phone time.
- The district attorney obtained preliminary injunctions, contending the integrated systems were unlawful slot machines under Penal Code § 330b; defendants appealed.
- Courts below found the systems constituted slot machines because (1) operation was triggered by a user input analogous to inserting money and (2) prizes were awarded by chance/unpredictable outcome even though outcomes were preset; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the sweepstakes systems are "slot machines or devices" under Penal Code § 330b(d) | Systems meet § 330b(d): user input (PIN/card) operates device and users may win money by chance/unpredictable outcome | Not a slot machine because terminals merely reveal predetermined entries; the terminal does not itself generate chance; likened to lottery vending machines | Held: Systems are slot machines — an integrated apparatus that awards prizes by chance/unpredictable outcome when activated by user input falls within § 330b(d) |
| Whether the lack of a physical coin/token insertion defeats the statute’s operation element | User entry (swipe/PIN/account) is "other means" that causes device to operate under § 330b(d) | Statute requires insertion of coin/object into a slot; electronic access is different | Held: "by any other means" covers electronic activation; element satisfied |
| Whether preset/sequentially arranged outcomes preclude a finding of chance | Even prearranged/sequential pools produce outcomes unpredictable to the user and thus satisfy the chance element | Because outcomes are preset before play, terminal play is only a reveal and not a chance‑generating operation (relying on State Lottery) | Held: Predetermined sequential entries still produce chance/unpredictability from the player’s perspective and fit § 330b(d) |
| Whether consideration or free‑entry options mean the systems are lawful | Consideration is subsumed in § 330b elements where purchase gives entries; free entry option does not negate that customers pay primarily to play | Presence of a no‑purchase method and sale of bona fide products means no unlawful lottery; compares to State Lottery vending machines | Held: § 330b does not require separate proof of consideration beyond its elements; evidence showed patrons paid largely for the opportunity to play, so argument fails |
Key Cases Cited
- People ex rel. Lockyer v. Pacific Gaming Technologies, 82 Cal.App.4th 699 (preset computer program determining sweepstakes outcomes can make a device a prohibited slot machine)
- Trinkle v. Stroh, 60 Cal.App.4th 771 (adding chance/prize to a vending device converts it into an unlawful slot machine-like device)
- Trinkle v. California State Lottery, 105 Cal.App.4th 1401 (vending lottery tickets in sequential order differs from integrated systems that determine winners)
- Hotel Employees & Restaurant Employees Internat. Union v. Davis, 21 Cal.4th 585 (definition and analysis of chance vs. skill in gambling law)
- People v. Whitmer, 59 Cal.4th 733 (principles on retroactive application and limits of judicial enlargement of criminal statutes)