A man walks into a bar (no, it’s not the beginning of a joke) and notices a machine with a brightly flashing screen. He goes up to the machine, puts a dollar in the slot and out comes a coupon worth $2 for him to use later. Then the screen suddenly transforms into what looks like a typical casino slot machine display. The reels spin around, three cherries pop up, and he’s a winner! The machine prints out a winning ticket and he exchanges it with the bartender for his cash winnings.
That’s certainly gambling, right? Actually, under the right circumstances, it’s probably not gambling in the eyes of Illinois law. It’s probably legal. As with so many things, you cannot judge a book by its cover—spinning reels and payouts does not a gambling machine make.
Illinois law allows that certain things that would normally be considered gambling are completely legal. An obvious example is the Illinois Lottery. People gamble lots of money on the Illinois Lottery in hopes to win even more money and the legislature allows it. Certain charitable games and raffles are other types of gambling which the Illinois legislature has deemed to be legal. Most people understand those common exceptions to the normal gambling laws. What some people might not realize, though, is that Illinois law also makes another very important exception for games where money can be won, but no payment or purchase is required to participate. It’s not gambling under Illinois law.
What was the legislature thinking when it made that type of game legal? The answer is simple: sweepstakes. Every year across the country, businesses sponsor thousands of games and contests where people can win thousands or even millions of dollars, and it’s all completely legit. Companies sponsor these sweepstakes as a way to drum up business and create excitement for their products. It’s so common that most people would not even consider that it might be a form of gambling in the first place.
Probably the most popular of these contests is the McDonald’s Monopoly sweepstakes. If a customer buys a hamburger, he also gets a Monopoly game piece which reveals either an instant win or a property to add to his game board.
Computers have even brought sweepstakes into the modern age. It used to be that people would mail in their magazine subscriptions, along with their free entries for the sweepstakes, to Publishers Clearing House and wait weeks for the big announcement on television. But now Publishers Clearing House has modernized, going online to let its customers play games as part of its sweepstakes. It even allows people to play what look like traditional slots and table games normally found in a casino, all for valuable prizes including cash.
So, what does all of this mean here in Illinois? It means that many more businesses can get in the act of sweepstakes and promotions. It also means that what might look like a gambling machine might actually not be considered gambling in the eyes of the law. As noted before, the law says that games that pay out money are not considered gambling under the Illinois Criminal Code as long as no payment or purchase is required to participate. This is a shorthand reference to the Illinois Prizes and Gifts Act, which also specifically allows that businesses can giveaway prizes or money as part of a sweepstakes where no payment is required to participate. The Illinois legislature has recently clarified that video gaming devices are legal if the device is used in an activity which is not considered gambling under the Illinois Criminal Code. In other words, if a video gaming machine is doing something that is allowed under the law (like an electronic sweepstakes or promotion where no purchase is necessary) it is not an illegal gaming machine. There are some other rules which apply to these types of promotional games, but the main thing which differentiates games like these from illegal gambling is the ability to enter the sweepstakes for free.
So, let’s take another look at our winner at the bar. When he put his money into the machine, he received back something of value. In this case, it was a coupon worth $2. The coupon purchase is the same as purchasing a hamburger from McDonald’s, a magazine subscription from Publishers Clearing House, or any other item of value. Then the machine gave the man free entries into a sweepstakes where he could win some money. It’s just like when McDonald’s gives out a Monopoly game piece or when Publishers Clearing House lets its customers play games (including slots simulations) on its website. When the man at the bar sees the reels spin around on the screen and the three cherries line up to make him a winner, it’s just a fun and interesting way to reveal the outcome of his free entry into the sweepstakes.
There might be confusion at this point because in every example above, the player makes an initial purchase of a coupon, a hamburger, or a magazine before he gets entered into the sweepstakes and gets to play the game. At first glance, it might seem like his purchase is a payment for a chance to win and, thus, not a true and legal sweepstakes. It’s important to remember, though, that in all of the above examples the money did not buy any entries. The initial purchase is solely to buy a product of real value: a coupon, a hamburger, or a magazine. Entries into the sweepstakes are free and merely incidental to a purchase.
Most importantly: all true and legal sweepstakes in Illinois must allow for a free method of entry. If you read the fine print of most sweepstakes rules, you’ll see, “NO PURCHASE NECESSARY.” All good sweepstakes rules should also let a customer know how to enter for free. Normally, the traditional method of obtaining free entries is to send a self-addressed stamped envelope or a postcard request to the company. Any machine or contest that does not provide a free method of entry is not a legal sweepstakes.
Electronic product promotion machines are a new technology which represents a brand new opportunity for smaller businesses to run exciting promotions and sweepstakes just like the big companies do. It also presents a great way for retailers and restaurants to partner with these companies to open new revenue streams, too, by agreeing to place these types of terminals (also known as promotional kiosks) in their place of business.
And because electronic product promotion is not gambling, it opens up that opportunity to a wider range of businesses. Remember, under Illinois’ Video Gaming Act, video gaming terminals can only be placed in fraternal organizations, truck stops, or taverns that sell alcohol for consumption on premises. Electronic product promotion kiosks have no such restrictions right now. So, they can be placed in liquor stores, restaurants with no liquor license, convenience stores, dollar stores, laundromats...the sky is truly the limit.