May 16, 2011
Chuck E Cheese's, Gambling & Breach of Contract
Posted by Christine Hurt

Like most reasonable parents, I am no fan of Chuck E Cheese's.  Fortunately, we haven't lived in a city with one in quite awhile, so we have been spared outings and birthday parties there.  There are lots of reasons to avoid it:  it's loud, the food is not great, and the soda cups are really small.  And, though I've run no controlled experiments, I've yet to take kids there and not have one of them run a fever a few days later.  And, unless you have the will power to let every visit end in screams and tears, you will spend many, many dollars on tokens to be used on games, while your mediocre pizza gets colder and even more mediocre.

Pizza is a sideline; here's the business plan.  You buy tokens to use on the games, and sometimes if you win, coupons will spew out of the machine.  If you save coupons, you can turn them in for "prizes" (euphemism for "plastic crap").   Big huge prizes are on display, but unless your child saves their coupons for several years, you will choose from a small bouncy ball and a key chain.  Basically, for every hundred dollars you spend on tokens, a very successful ten year-old can yield you about $8 retail in plastic crap, which must cost the store about $.75.  Now, other kid-friendly eateries have adopted this model, which definitely brings (little) people in even when the food is not fourstar.  In Texas, Gattitown is bigger (Merry-go-Round) and has better food.  And a lot of even higher-end, grown-up places like Dave & Buster's  also work on this scheme.  In Champaign, a local restaurant family has a successful high-end eatery with this model (and mini-bowling!).

If the pizza is not enough to sue Chuck E Cheese over, Denise Keller of California has filed a (purported) class-action lawsuit against CEC Entertainment, Inc. alleging that many of the token-eating games at her hometown CEC are actually gambling devices similar to slot machines.  Unlike traditional Skee-ball or Pop-a-Shot games which require skill (much more than most children have), these are pure games of chance.  Here's a video of the Wheel of Fortune game  and the Deal or No Deal game that may be the ones Ms. Keller cites in her complaint.  Sure enough, Section 330a and 330b of the California Penal Code make it unlawful to possess "slot machines," which are defined broadly as basically any machine that you put something of value into, then through the operation of pure chance, you may receive something else of value.  Voila!  Half the arcade games in these token-to-plastic crap eateries!

So, two things.  First, this is not the first time anyone has told CEC or other kiddie arcades this.  Apparently, the Supreme Courts of both Mississippi and Alabama have that these types of devices (like the "Quarter Pusher") are gambling devices.  In Mississippi, the legislature let them off the hook with a "low-stakes" exception.  As I've learned in trying to research and write in this area, once you start to think in terms of gambling, then every decision seems to be an illegal wager.  Particularly at these places, where you must buy the tokens, the games are like slot machines.

The second thing is how does Ms. Keller turn what is basically a violation of the Penal Code into a civil class action worthy of a contingent-fee attorney?  Well, in her complaint, she alleges an unfair or illegal business practice, a demand for rescission of an illegal contract and a declaratory judgment that the games are illegal.  There you go. 

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