Exotic Club Seeks Machines – Is it Gambling?

Newburyport News

Interesting piece about whether a “sweepstakes machine” that allows people to play blackjack and poker for a prize is just a vending machine or is it considered gambling.

That’s the question Salisbury selectmen are pondering after tabling a request for a business license by Dan Brown of New Bedford’s Nutel Communications. Nutel is seeking the license to put two sweepstakes machines at Ten’s Show Club at Salisbury Beach Center, a “gentlemen’s” nightclub, as the website defines it.

The machines work differently than traditional slot machines, but they allow people to play games of chance and, if they win, collect receipts bearing the points or credits amassed while playing. Players then go to someone on site and redeem their receipts for prizes. In this case, the prize would be a phone card, Brown said.

Gambling consists of three elements: prize, price and chance. The sweepstakes machines arguably have all three elements, and therefore could be deemed gambling machines.

Town Manager Neil Harrington advised the board that if they consider going forward with the license request, they should hold a public hearing before they take a vote since the machines are so controversial. Harrington also said that should the machines prove to be illegal, they could pose the potential of jeopardizing Ten’s liquor license.

This is not Salisbury’s first exposure to sweepstakes machines. On March 31, 2009, after a three-month undercover investigation, Salisbury police, with the help of the FBI, raided five local convenience stores with similar machines, this time supplied by King’s Pre-Paid Phone Card. They seized more than $10,000 in cash and about 10 machines but found no phone cards on the premises.

King’s Pre-Paid Phone Card later filed suit against Salisbury, claiming their machines were legal. The town backed down, returning money and machines, and dropping the charges. But the raid sent a warning that’s kept similar machines out of town.

The experience left town officials leery. Acting police Chief Richard Merrill, who did his own research on the legality of the machines, agreed they’re intended to skirt the state’s restrictions against gambling. No matter what they’re called or what players get after playing — money or the equivalent in phone card minutes — they meet all three gambling elements, Merrill said.

Even though Brown assured selectmen there are about 50 machines in operation throughout the state with no problems, selectmen tabled the issue. They will consult legal counsel to have their concerns addressed.

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