Supreme Court considers gambling statutes in phone-charging lawsuit

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The Wisconsin Supreme Court is weighing what should rightfully be considered a gambling machine under state statute.

The high court heard oral arguments in Quick Charge Kiosk LLC v. Josh Kaul on Monday. The case involves a dispute of first impression over the statutory interpretation and application of three statutes related to gambling.

Quick Charg Kiosk LLC operates phone-charging machines in gas stations and other retail locations throughout Wisconsin. When a customer puts a dollar in the machine, he or she receives 100 credits to play a video-chance game and one minute of device-charging time. The customer can’t keep playing the game after the charging time ends, but he or she can redeem the remaining credits for cash, at a rate of 100 credits for each dollar.

The lawsuit began in 2016 after several municipalities, including the City of Greenfield and Brown County, ordered Quick Charge to remove the machines, saying they were illegal gambling devices. A Milwaukee County Circuit Court agreed, ruling that the charging machines were gambling machines under § 945.01(3) and unlawful under ch. 945.

Quick Charge appealed, but the Court of Appeals upheld the lower court’s decision. Quick Charge then petitioned the state Supreme Court to review whether the specific definition of consideration should apply both to gambling machines and lotteries; if the ability to use the machines for free negates the element of consideration under Wisconsin’s gambling-machine definition; and if a statute governing marketing promotions applies to electronic devices used to facilitate a marketing promotion.

Ohioma Emil Ovbiagele, counsel for Quick Charge, compared the charging machine to a “buy one, get one free” promotion. He said customers are paying for the chance to play the game, while the product — electricity to charge a device — is always free.

“The way this was devised was to get people used to the idea of plugging their phones into charging boxes randomly place, especially in the age of cybersecurity concerns,” Ovbiagele said.

Colin Roth, assistant attorney general, said he didn’t believe there was actually a product offered by the charging machine. Both he and Ovbiagele discussed questions about a series of hypothetical situations involving buy-one, get-one-free promotions for sandwiches at a fast-food restaurant and whether those should be considered gambling under state statute.

“I think all these hypotheticals are really a red herring here in the sense that I have not yet heard really a single argument from the other side that clearly explains how these machines that we’re dealing with here in this case do not fit the definition of gambling machines under 945.01 sub 3,” Roth said.

Ovbiagele argued the Court of Appeals decision meant electronic devices can’t be paired with legal sweepstakes. He said that means a phone could be defined as a gambling machine if a person used an app offering a marketing promotion.

“There’s nothing in the statute that says the machine itself has to be the thing that’s determining chance,” Ovbiagele said. “What this leads to is an ad hoc interpretation and implementation by the state picking and choosing when it should prosecute.”

Roth argued the plain language of the law was clear and the devices met the elements of the statute defining gambling machines.

“Part of the consideration that you deposit money into the machine for a spin at the wheel is for the chance to win more money,” Roth said. “You simply can’t ignore that fact.” Follow @WLJReporter