934 N.W.2d 18
Wis. Ct. App.2019Background
- Quick Charge Kiosk LLC and Jeremy Hahn operated coin-operated phone-charging kiosks that also offered a video chance game; $1 buys one minute charging + 100 play credits, credits redeemable at $1 per 100 credits.
- Machines have RNG-driven video games, can be played without charging, and printed receipts allow redemption of remaining credits for cash at face value.
- State Attorney General concluded the Machines were unlawful gambling machines; municipalities and state agents removed or sought removal of Machines from locations.
- Quick Charge sued seeking declaratory judgment that its Machines fit the lottery/in-pack chance promotion exception (Wis. Stat. §100.16(2)) and thus were lawful under the lottery definition (Wis. Stat. §945.01(5)).
- Attorney General moved for summary judgment that the Machines are illegal gambling machines under Wis. Stat. §945.01(3); trial court granted summary judgment for the AG and this appeal followed.
Issues
| Issue | Quick Charge's Argument | Attorney General's Argument | Held |
|---|---|---|---|
| Whether the in-pack chance promotion exception (§100.16(2)) removes “consideration” so Machines are not gambling machines under §945.01(3) | §100.16(2) exemption applies and thus no consideration exists; Machines are exempt lotteries | §100.16(2) is referenced only in the lottery definition (§945.01(5)), not in the gambling-machine subsection; exception does not apply to §945.01(3) | Exception does not apply to gambling machines; §100.16(2) cannot be imported into §945.01(3) |
| Whether “consideration” in the gambling-machine definition should be interpreted the same as in the lottery definition | The term must be read consistently across §945.01 subsections; lottery definition’s special meaning applies to gambling machines | The lottery definition expressly limits its definition to that subsection; different subsections can (and do) define terms differently | Court held the definitions differ; gambling-machine subsection’s consideration is ordinary meaning and is not limited by lottery subsection |
| Whether the Machines involve “consideration” under §945.01(3) | Machines are structured as in-pack chance promotions so there is no consideration | Even without §100.16(2), the Machines require payment/recompense (charging time and credits redeemable for cash) and thus involve consideration | Machines involve consideration (ordinary meaning: payment/reward) for §945.01(3) |
| Whether the Machines are a lottery (§945.01(5)) or a gambling machine (§945.01(3)) | Machines are lotteries (an enterprise conducting a chance promotion) and so qualify for the in-pack exception | Machines are contrivances/machines; statutory language, prior precedent, and structure treat mechanical devices as gambling machines | Court held Machines are gambling machines (contrivances), not lotteries (enterprises), and thus unlawful under §945.01(3) |
Key Cases Cited
- Kalal v. Circuit Court for Dane County, 271 Wis. 2d 633, 681 N.W.2d 110 (2004) (statutory interpretation begins with plain language; give effect to every word)
- State v. Hahn, 221 Wis. 2d 670, 586 N.W.2d 5 (1998) (treated video poker as a gambling machine)
- State v. Lake Geneva Lanes, Inc., 22 Wis. 2d 151, 125 N.W.2d 622 (1963) (applied gambling-machine provision to pinball machine)
- Augsberger v. Homestead Mut. Ins. Co., 359 Wis. 2d 385, 856 N.W.2d 874 (2014) (different words in statute presumed to have different meanings)
- Bohrer v. City of Milwaukee, 248 Wis. 2d 319, 635 N.W.2d 816 (2001) (distinguishing lotteries from mechanical schemes)
- A.O. Smith Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 588 N.W.2d 285 (1998) (undeveloped arguments may be deemed abandoned)
- State v. Pettit, 171 Wis. 2d 627, 492 N.W.2d 633 (1992) (court need not address undeveloped arguments)