What Is a “Simulated Gambling Device”?
How Colorado Confuses Those Trying to Understand Skill vs. Chance
Legal columnist Tom Fricke
by Tom Fricke
Until the 2015 legislative session, the Colorado law that told you what amusement redemption you can offer was straightforward, mostly reasonable and intelligible. The state’s gambling crime law was clear that the following was okay:
“Bonafide contests of skill … in which awards are made only to entrants.”
There was no limit on the prize you could offer. Even cash wasn’t prohibited. The state’s jurisprudence had established that the gambling crime statute prohibited only games in which chance predominated in winner determination. The Attorney General of Colorado had even attempted to define the predominance standard with the following four-part test:
1. Whether without skill it would be impossible to win the game,
2. Whether the general public, not experts, have the capacity to solve the problems presented,
3. Skill must control the final result, not just one part of the larger scheme, and
4. The participants must be informed of the criteria used in selecting winners.
Only the liquor rules remained problematic. They prohibit “devices defined as slot machines pursuant to Colorado Revised Statutes 44-30-103 (30)(a).” Except for cranes, the section referred to in the liquor regulation defines a slot machine as a game machine with payment and a prize awarded,
“by reason of the skill of the player or application of the element of chance, or both.”
The regulation then gives you a “pass” on “games of skill” for awarding “things of value.” The regulation has no restriction on the permissible prize. What’s not prohibited is permitted. Accordingly, under the liquor regulation, there’s no prohibition of cash as a prize. The statute’s exception for “bonafide contests of skill” applies. The regulation gives you a list of 10 example games that are allowed. They’re mostly skill-only games like air hockey and roll downs.
A rule of interpretation provides that anything not listed in statutory example terms has to be the same kind of game as the example terms, except for one thing. The regulation also says that the list of permitted games is not limited to the example terms. This means that anything else allowed by the exception in the criminal law as a skill-predominant “bonafide contest of skill” would also be allowed.
Since the Colorado “default” standard of prohibition, namely, predominance of chance, does not require elimination of chance inherent in the machine, are you good to go with a mixed game of chance and skill in a Colorado bar? Well, depending on what you decide to operate, the answer may lie in the sensibilities of the administrative law judge and your willingness to enforce your rights.
Had enough? There’s more and it is even more absurd. Usually, to understand what you can offer you would look at the criminal gambling statute and the liquor regulation. Colorado makes you also look at the state’s casino law for the definition of a slot machine. However, since May, 2015 when the legislature added a new chapter to the state’s crimes code, you also have to look at the Rubik’s Cube of game prohibitions: the chapter separate from the gambling crime chapter that prohibits “simulated gambling devices.”
That masterpiece of legislative fog defines an “electronic gaming machine” as a video game that people use in a “sweepstakes.” It says that your equipment is an “electronic gaming device,” even if the game played on it is a game of skill. Then it defines a “sweepstakes” as any game for a prize. The statute prohibits operating a “simulated gambling device” for a prize and goes on to define “prize” as any value except for single-play merchandise redemption entitlement not more than $25.
Never mind that the statute says that a “simulated gambling device” is one that “displays simulated gambling displays,” but never tries to define the core term of the statute. Rather, the scrivener of this statute wrote that the term, “simulated gambling device” just means any game for a prize, too. It may be that covertly, and/or through incompetent legislative drafting, Colorado has enacted a statewide redemption prize limit of $25 merchandise per single play.
I don’t think this statute will ever be litigated, though. I checked just now. No dispute about the state’s prohibition of “simulated gambling devices” or awards of cash or of merchandise entitlement more than $25/single play has reached the Colorado Court of Appeal. That could be because the assistant prosecutor with a dispute over cash as a prize or sevens and cherries in the video would have such difficulty understanding this turgid statute that the unfortunate public servant with such a case would find a way –– any way –– to resolve the dispute other than reliance on the Colorado prohibition as “simulated gambling devices.”
Attorney Tom Fricke specializes in the law of redemption. He has served the amusement game trade for more than three decades in various roles including in-house counsel for a national FEC chain, trial and transactional attorney for many businesses and as an expert witness on the law of redemption. Tom has also penned hundreds of articles on the subject of redemption regulation, legislation and compliance.
Redemption and the Law is commentary. It is not legal advice. It is intended only to provide useful information on the subject matter covered with the understanding that neither the publisher nor the author is engaged in rendering legal services. If legal advice or other professional or expert assistance is required, the services of a competent professional should be sought. The views expressed in Redemption and the Law are solely those of the author and not the publisher. Author Tom Fricke claims an exclusive trademark in the phrase Redemption and the Law. He can be reached by email at [email protected]; phone 314/322-9526. © Copyright, Thomas F. Fricke 2016, St. Louis, Missouri, USA. All rights reserved worldwide.
