Quick Charge Kiosk LLC v. Josh Kaul
944 N.W.2d 598
Wis.2020Background
- Quick Charge Kiosk LLC (owned by Jeremy Hahn) modified commercial gambling-machine equipment into kiosks that provide a pay-to-play video game (chance-based, RNG-determined payouts) and a cellphone-charging function.
- For each $1 inserted a customer gets 100 credits to play the game (game pays out ~65%); unused credits on some kiosks can be redeemed for cash; some kiosks require at least one play to redeem credits.
- The Attorney General and law enforcement concluded the kiosks were illegal "gambling machines" under Wis. Stat. § 945.01(3); several kiosks were seized.
- Quick Charge sued for a declaratory judgment, arguing the kiosks are lawful because (1) the lottery definition of "consideration" (Wis. Stat. § 945.01(5)) and its in-pack chance promotion exception (Wis. Stat. § 100.16(2)) apply, and (2) availability of free-play options negates "consideration."
- The circuit court granted summary judgment to the Attorney General; the court of appeals affirmed; the Wisconsin Supreme Court granted review and affirmed the lower courts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether kiosks satisfy the "consideration" element of the gambling-machine definition in Wis. Stat. § 945.01(3) | Kiosks do not involve consideration because the lottery definition (§ 945.01(5))—which exempts in-pack chance promotions under § 100.16(2)—should control, and free-play options remove consideration | "Consideration" for gambling machines should be given its ordinary/legal meaning; the lottery exception for in-pack chance promotions does not apply to § 945.01(3); free plays do not eliminate consideration when patrons pay to play | The court held the kiosks satisfy "consideration": customers pay money/credits in exchange for a chance to win value, so the element is met and the kiosks are gambling machines |
| Whether the § 945.01(5) lottery definition and its § 100.16(2) in-pack promotion exception apply to § 945.01(3) gambling machines | Quick Charge: same-word usage means the lottery definition and its exceptions should govern gambling machines too | Attorney General: the statute text confines the lottery definition and its exceptions to lotteries; gambling-machine subsection contains no cross-reference | The court held textual and structural clues show the lottery exception applies only to lotteries, not to gambling machines; no exemption for the kiosks |
| Whether availability of free-play options negates "consideration" | Free-play mechanisms (mail-in certificates, company-paid plays) mean patrons need not pay, so no consideration exists | Free plays do not change the fact that the machine can be used as a pay-to-play gambling device; the statute covers a contrivance that "for a consideration affords the player an opportunity..." | The court held free-play availability is insufficient to negate consideration where paying customers can exchange money for a chance to win; free plays do not make the device non-gambling |
Key Cases Cited
- Kalal v. Circuit Court for Dane Cty., 271 Wis. 2d 633 (2004) (statutory-interpretation principles; common and ordinary meaning)
- State v. Cox, 382 Wis. 2d 338 (2018) (term-consistency principle applies only ‘‘absent textual or structural clues’’)
- Eichenseer v. Madison–Dane Cty. Tavern League, Inc., 308 Wis. 2d 684 (2008) (summary-judgment standard and de novo review)
- DOR v. River City Refuse Removal, Inc., 299 Wis. 2d 561 (2007) (discussion of legal definitions of consideration)
- Mueller v. TL90108, LLC, 390 Wis. 2d 34 (2020) (apply accepted legal meaning when a term has a distinct legal meaning)
- Barber v. Jefferson Cty. Racing Ass'n, 960 So. 2d 599 (Ala. 2006) (supporting authority that free-play availability does not alone eliminate consideration)