THE PEOPLE ex rel. LISA S. GREEN, as District Attorney, etc., Plaintiff and Respondent,
KIRNPAL GREWAL, Defendant and Appellant. [And four other cases.[*]]
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Superior Court of Kern County, Nos. CV-276959, CV-276958, CV-276961, CV-276603, CV-276962 (Consolidated), William D. Palmer, Judge. Court of Appeal, Fifth Appellate District, No. F065450.
Weston, Garrou & Mooney, John H. Weston, G. Randall Garrou and Jerome H. Mooney for Defendants and Appellants Kirnpal Grewal and Phillip Ernest Walker.
William H. Slocumb, Christopher T. Reid; Hunt Jeppson & Griffin and Tory E. Griffin for Defendant and Appellant John C. Stidman.
Steven Graff Levine; Dowling Aaron, Daniel K. Klingenberger, Lynne Thaxter Brown and Stephanie Hamilton Borchers for Defendants and Appellants Kamal Kenny Nasser and Ghassan Elmalih.
Downey Brand, Stephen J. Meyer, Tory E. Griffin and Kelly L. Pope for Net Connection Hayward, LLC, as Amicus Curiae on behalf of Defendants and Appellants.
Lisa S. Green, District Attorney, Gregory A. Pulskamp and John T. Mitchell, Deputy District Attorneys, for Plaintiff and Respondent.
Kamala D. Harris, Attorney General, Sara J. Drake, Assistant Attorney General, and William L. Williams, Jr., Deputy Attorney General, for Attorney General for the State of California as Amicus Curiae on behalf of Plaintiff and Respondent.
Mark L. Zahner; and Gary Koeppel, Deputy District Attorney, for California District Attorneys Association as Amicus Curiae on behalf of Plaintiff and Respondent.
Mayer Brown and Donald M. Falk for Viejas Band of Kumeyaay Indians and Lytton Rancheria of California as Amici Curiae on behalf of Plaintiff and Respondent.
Matthew J. Geyer; Bien & Summers, Elliot L. Bien and Jocelyn S. Sperling for GTech Corporation as Amicus Curiae on behalf of Plaintiff and Respondent.
Liner, Joseph R. Taylor and Tiffany R. Caterina for California Gaming Association as Amicus Curiae on behalf of Plaintiff and Respondent.
Reed Smith, Paul D. Fogel and Dennis Peter Maio for California State Lottery as Amicus Curiae on behalf of Plaintiff and Respondent.
Opinion by Chin, J., with Cantil-Sakauye, C. J., Werdegar, Corrigan, Liu, Cuéllar, and Kruger, JJ., concurring.
[189 Cal.Rptr.3d 688] [352 P.3d 276]
Slot machines, sometimes called " one-armed bandits" (although younger users might wonder why), have long been outlawed in California. Under review are devices that [352 P.3d 277] resemble traditional casino-style slot machines in some ways and offer users the chance to win sweepstakes prizes. Because they employ modern technology, the devices differ from traditional slot machines in some ways. We must decide whether the devices come within the statutory definition of a " slot machine or device" in Penal Code section 330b.  We conclude they do and affirm the judgments of the Court of Appeal, which reached the same conclusion.
I. Facts and Procedural History
These facts are taken largely from the Court of Appeal opinions authored by Justice Kane.
In these cases, which we have consolidated for argument and this opinion, the People of the State of California, by and through the District Attorney of Kern County, filed civil actions against defendants Kirnpal Grewal, John C. Stidman, Phillip Ernest Walker, Kamal Kenny Nasser, and Ghassan Elmalih,
operators of Internet café s in Kern County. Three distinct, albeit similar, devices operated at several Internet café businesses are at issue here. We will first describe the businesses and devices as they existed at the time of the hearings in the superior court, then the procedural background.
A. The A to Z Café ; the OZ Internet Café and Hub
Defendant Kirnpal Grewal owned the A to Z Café, and defendant Phillip Ernest Walker owned the OZ Internet Café and Hub (the OZ), both in Bakersfield. The record shows, and the parties agree, that Grewal's business operated a sweepstakes system essentially identical to that of the OZ. Accordingly, we will discuss the OZ's system.
Among other products, the OZ sold computer and Internet time (hereafter, Internet time) on computer terminals on its premises. The OZ promoted the sale of Internet time and other products with a sweepstakes giveaway implemented through a software system that a company known as Figure Eight Software provided. [189 Cal.Rptr.3d 689] Participants in the sweepstakes had the chance to win cash prizes varying from small amounts to a top prize of $ 10,000 as set forth in the sweepstakes's odds tables.
OZ customers could purchase Internet time for $ 10 per hour. When a customer purchased Internet time, an employee assigned the customer a personal identification number (PIN). The employee created an account by which the customer could access the computers and Internet as well as play sweepstakes computer games. Customers were not charged for Internet time while they were playing the computer sweepstakes games. At the time of purchase, the customer received 100 " sweepstakes points" for each dollar spent. Walker stated that " [c]ustomers purchase product[s] consisting mostly of computer and Internet time at competitive prices and receive free sweepstake points in addition to the product purchased." Additionally, a customer might receive 100 free sweepstakes points every day that the customer came into the OZ, and first-time customers received 500 additional sweepstakes points. These sweepstakes points could be " used to draw the next available sequential entry from a sweepstake contest pool." This could be done and the result revealed in one of three ways: (1) asking an OZ employee to reveal a result, (2) pushing an instant reveal button at the computer station, or (3) playing computer sweepstakes games at the computer terminals that appeared similar to common games of chance.
The sweepstakes rules provided that no purchase was necessary to enter the sweepstakes. According to Walker, noncustomers could obtain free sweepstakes entries by asking an employee at the OZ or by mailing in a request.
According to Walker, to access the computers, customers had to sign a " Computer Time Purchase Agreement" form. On the form, the customers had
to acknowledge that they understood the following matters before using the OZ computers: (1) that they were purchasing computer time and (2) the sweepstakes [352 P.3d 278] computer games were " not gambling," but were a " promotional game" in which all winners were predetermined. On the form, the customers affirmed that they understood " [t]he games have no [e]ffect on the outcome of the prizes won," but were merely an " entertaining way to reveal [their] prizes and [they] could have them instantly revealed and would have the same result."
Walker's declaration explained what happened when a customer used the sweepstakes computer game: " If a customer utilizes the pseudo-interactive entertaining reveal interface the customer can encounter some games that have appearances similar to common games of chance." However, before any " spinning wheels or cards" appeared on the screen, " the sweepstakes entry has already been drawn sequentially from a pool of entries and is predetermined. There is no random component to the apparent action of the images in the interface even though it simulates interactivity. Instead, the images will display a result that matches the amount of any prize revealed in the entries. [Citation.] [¶ ] As told to the customer in the rules and in disclaimers, the pseudo-interactive interface does not 'automatically' or 'randomly' utilize any play to obtain a result."
Walker also described in greater detail the operation of the software system the OZ used to run the sweepstakes. His declaration stated that under that software system, the issue of whether customers had won a cash prize was determined when their entries were drawn from a sweepstakes pool. Each such entry had a previously assigned cash prize of zero or greater. Entries were drawn sequentially [189 Cal.Rptr.3d 690] from one of 32 sweepstakes pools (also called " multiple finite deals of entries" ) that the software company created. The software company prearranged the entries in each pool in a set order or sequence, and the OZ had no control over that order or sequence or the corresponding results. Access to a particular sweepstakes pool was determined by how many points customers chose to use (or bet) at any one time. Each pool had its own prizes and its own separate sequence of entry results. When customers selected a sweepstakes pool, the software system assigned them the next available entry result in that pool, in sequence. At that point, the ...