Our local VFW has been approached by a company called E-Center who is represented by attorney Billy W. Boone of Abilene. I have seen the brochure, but not yet received the company's supporting documents. The brochure features slot type machines that accumulate credits. We have repeatedly put 8 liner businesses out of business and have appreciated their contributions to our forfeiture fund, but the VFW requires a little more finesse. Has anyone dealt with either E-Center or Mr. Boone?

Rex, I have dealt with Boone and the "sweepstakes" some. Call me at 325-235-8639.

We, too, are facing that issue. In the immense packet of material they've sent us so far, one of the notable pieces of information is the petition in a federal lawsuit filed against the DA and the sheriff in Del Rio for purported violation of E-Store's First Amendment rights. While I am relatively unimpressed with the legal merit of the suit, it is a cautionary tale about speaking frankly with this group about your intended course of procedure.

You are correct that "sweepstakes" law introduces something of a new wrinkle into the analysis otherwise applicable to 8-liners. Specifically, as I see it, the question becomes something of the reverse as it applies to 8-liners. That is, the relevant question becomes not the prize available at the back end (there's no question about that), but rather the consideration that may or may not be paid on the front end. As a philosophical matter, I'd be interested in hearing from others who are looking at this same problem.

For those of you not familiar with the "sweepstakes" scheme as it is used with 8 Liners, it goes like this:

First, you have to understand the premise that a legal "sweepstakes" differs from an illegal "lottery." A "lottery" is where a participant pays consideration for a chance to win something of value. (The definition of a lottery is the basis for all of our gambling prohibitions.) In a "sweepstakes," the participant is not required to pay consideration for the chance to win a prize. Instead, the chance to win a "sweepstakes" is used as an incentive to attract a consumer to the sweepstakes operator's business. An example is Coke offering a cash prize to people who discover a lucky number under the cap of a Coke bottle. The consumer buys the Coke and gets the chance to win for no additional consideration. Consumers may request a "free" chance to enter by making a request to Coke. Therefore, the dollar you insert into a Coke machine is not consideration for the chance to win the sweepstakes prize...it is consideration for the Coke. The "chance to win" is given to the consumer for free...thus no consideration has been paid for the chance to win the prize (thing of value.) Charitable sweepstakes 8 Liner operators will often analogize their operations to the Coke machine example, illustrated above. They call their machines "charitable donation acceptance stations."

In the 8-Liner sweepstakes scheme, a player makes a "charitable donation" to the operator of the game, who has previously incorporated as, or associated with, a 501(c)(3) non-profit charity. The player receives a receipt for the donation, usually with instructions to use it to obtain a tax deduction. The player is then given a "free" opportunity to enter a "sweepstakes" which offers the player the opportunity to win cash. The "sweepstakes" is determined by playing an 8 Liner machine. Typically, the player gets 100 chances to win for each dollar "donated" to charity. "Free" opportunities to play the "sweepstakes" without making a donation are made available, usually by sending a self-addressed, stamped envelope to the operator, or by making a request to the operator for a limited number of "free" entries available per day.

With regard to the "charity," the operator typically promises to give all of the money to some charity...after deducting his overhead, operating expenses, cost of sweepstakes prizes, machine rentals, advertising costs, payroll expenses, building rentals, utilities, vehicle expenses, etc. the operations are often promoted by companies who charge rent on the machines, based on a percentage of money raised for the charity.

With regard to the "sweepstakes" aspect of this operation, I would suggest you read Jester v. State, 64 SW3d 553 (Tex. App. -- Texarkana 2001, no writ.) In Jester, the "sweepstakes" was used to promote the sale of long distance phone cards. Players bought a phone card...apparently attracted to the business by the offer of asweepstakes prize...then got to try for the prize by playing an 8 Liner. The State put on evidence to show that the players did not place any value on the long distance phone cards...often putting them into the trash or dropping them onto the floor, immediatley after purchasing them. This is analogous to a consumer buying a Coke, looking under the lid, and pouring the Coke on the ground. Players interviewed by the investigating officers stated that they did not even know they could use the phone cards. The Court in Jester found that the State had presented sufficient evidence to show that the "sweepstakes" promotion was a sham designed to conceal the illegal 8 Liner gambling activity.

The challenge with an illegal "charitable sweepstakes" scheme is in gathering sufficient evidence to convince a judge/jury that the offer of a tax deduction is a sham...that players do not value, keep, or attempt to use the receipt they receive for tax purposes. It might also be necessary to prove that the charity is itself a sham, by showing that it does not actually serve a charitable purpose.

Keep in mind that is theoretically possible to have a "legal" 8 Liner sweepstakes...just as it is theoretically possible to operate a "legal" 8 Liner operation. The devil is in the details...and in how much time and effort you can devote to investigating one of these operations.

What the federal suits for injunctions demonstrate is that the operators are prepared to sue if you advise them up front that their scheme is illegal and that they should not open in your jurisdiction. If you choose to talk to these folks, I suggest that you limit your comments to general advice to follow the law and seek independent legal opinions. Do not tell them that if they open, you will shut them down...unless you enjoy giving the civl folks in your office something to do.

I would be happy to discuss any of this with you in a more private venue. I would also be interested in your thoughts and suggestions.

I received one of these packets as well, if anyone has more information on this topic, please email me.

Like others on this forum, I have shut down gaming parlors in the past.

John

Hello to All,

I am a film student at the University of Texas at Arlington. This semester, I am producing and directing a short film that involves the robbery of a game room.
I have not been able to find very many still in business, and was curious if there was a serious crackdown in the last few years. It seems I saw them all over not too long ago.
I was also curious if one can rent 8-liners, or have a good majority been destroyed? And if so, how would I go about renting a few? I do not need it them be functional, but I do need the lights on the machines to work.

And I apologize if I have abused this forum.

Thanks,

Christopher Mangus

Check your email.