Chuck E. Cheese’s sued for illegal gambling

May 20, 2011

Vegas CEC SignKids today seem to grow up so fast.

For example, kids didn’t play slot machines when I was young, but that’s all changed now.

Just ask Denise Keller, a California mom who’s suing Chuck E. Cheese’s for providing gambling machines in its establishments.

These gambling machines are not slot or video poker machines that you’d find in Vegas, but machines that dispense tickets to the player when a game is won.

The player may then exchange these tickets for prizes, and these tickets may also be purchased directly.

According to the complaint, what makes these machines illegal is that they are not predominantly “games of skill,” meaning that there is more luck involved in winning tickets than skill.

The complaint actually specifies several games that it claims are illegal and describes why they are so.

Like many others reading this, I don’t think this suit will really go anywhere.

However, I think this suit will be unsuccessful not because it’s completely baseless, but because courts aren’t equipped to handle these kind of issues.

For instance, Keller is suing under multiple theories of fraud, not under a criminal or regulatory statute with a provision that allows for private civil actions.

Keller is asserting that Chuck E. Cheese’s defrauded her by not disclosing its games as gambling machines before she did business with them, and that if she had known, she wouldn’t have done so.

To determine that Chuck E. Cheese’s is guilty of fraud, the court would first need to determine that Chuck E. Cheese’s games are illegal gambling machines, which would be a massive expansion of the definition and actions probably outside of the court’s scope.

So for argument’s sake, are these games gambling machines in the traditional sense?

Probably not.

Would they be gambling machines if tickets could be exchanged for cash, rather than prizes?

Almost certainly.

It is this level of insulation between the money that comes out of a parent’s pocket and the prize that is redeemed with tickets that makes the difference (and also explains Chuck E. Cheese’s high profitability).

In many other ways, these restaurants are very similar to casinos.

Many of the games that the complaint lists have fixed odds that determine the outcome of the game before it even starts.

The games also attempt to elicit the same psychological high from the player as a slot machine.

“Jackpots” are prominently displayed across many machines throughout the arcade, enticing a player to attempt a win at it.

With all of these similarities, is the difference between redeeming tickets for a stuffed animal and the $1.25 it’s actually worth sufficient to distinguish Chuck E. Cheese’s from a casino?

Maybe. Maybe not.

Either way, it’s a policy question that isn’t for the courts.

It would be more appropriate to bring this issue to legislators.

It would be even more appropriate, though, to try a little parenting.

Yes, it is easy to let the flashing machines babysit a kid for awhile, but if you feel so strongly that these establishments encourage children to gamble that you’re willing to sue, just don’t bring your kids there.

Until there’s an actual legal remedy, that’s probably going to be the best way to keep your kids away from it.