Government
BY KAMERYN GRIESSER
Cities seek to regulate game rooms, sweepstakes machines
By utilizing exceptions in the state law, sweep- stakes machines have gained popularity as an entertainment option among bars, restaurants and game rooms in the Austin metro. Now, following the lead of other cities throughout the state, Lakeway and Hutto are taking action to regulate them. The context Despite bearing resemblance to gambling devices—which are illegal in Texas—state law regard- ing sweepstakes machines has been carved out by various state court rulings over the years. This has left open the possibility for their legality, granted the primary purpose of the transaction is to receive a product or give a donation—not to play a game. Chere Proler, the owner of Spinners Gameroom in Lakeway, said she sells prepaid phone cards which allow patrons to play the machines. “You’re paying for a product and then the game is just entertainment,” said Proler, who opened the game room in 2017. What o cials are saying State law allows cities and counties to regulate game room establishments through zoning and permitting. On March 18, the city of Lakeway passed an ordinance which created a special use permit for game rooms. “Before, we were requiring them to get a special use permit under the auspices of an arcade,” Lake- way City Manager Joseph Molis said. “That’s a bit of an antiquated model that we didn’t think was neces- sarily applicable to these types of environments.” The ordinance also limits the number of game room permits in the city, their proximity to other game rooms, and their distance from community centers such as churches and schools. Molis said the ordinance will allow Lakeway o cials to keep track of the existing establishments and their activities. A Lakeway resident for over 30 years, Proler said she welcomes more regulation and clear direction from the city in hopes that it will reduce the nega- tive stigma surrounding game rooms. “It’ll keep ri ra out,” Proler said. “We live in a nice clean city. We want to keep it that way. We don’t want a whole city full of game rooms.” Molis said the city is only aware of three game room establishments currently operating in the Lakeway area. Following Lakeway’s ruling in March, o cials in the city of Hutto passed a similar ordinance in May that goes a step further by clarifying that true
At the Lucky Hippo game room in Hutto, patrons can give donations to play on the sweepstakes machines.
COURTESY LUCKY HIPPO
sweepstakes machines are not illegal gambling devices and outlining a procedure for regular inspections. John Montgomery, owner of Hutto’s Lucky Hippo game room, said he is in support of local e orts to regulate the game rooms, and is hopeful they can change public perception of the businesses as crime-riddled, dark and secretive. “We don’t want to be a stigma on the community,” Montgomery said. “That’s why we go and talk to elected o cials and law enforcement—because we don’t want to ru e feathers.” The bigger picture O cials from Lakeway and Hutto conrmed the reason for the new ordinance has to do with the Texas Supreme Court’s refusal to review a case pertaining to the legality of certain game room machines in December. According to the Texas Municipal League, a legal research organization for municipal governments, the previous ruling of the lower appellate courts has given cities more leverage to dene the terms of a legal loophole called the “fuzzy animal exception.” While the Texas Penal Code denes gambling as any game of chance that, for a payment, a ords the player a prize of value, the fuzzy animal exception is intended to allow children’s games, like those at Chuck E. Cheese, to award the player noncash prizes of a limited value. Game rooms use this loophole to o er
What are sweepstakes machines?
While details vary across operators and devices, the basic principles of sweepstakes machines tend to be the same, according to legal experts with the Texas Municipal League:
Winning entries claim either a noncash prize or redeem points for cash at the counter. sweepstakes entries; game outcomes are predetermined, requiring no skill or chance. Points are used to play casino- style games that reveal winning A patron donates, purchases a product or completes an in-person request and receives “points” for each sweepstakes entry.
SOURCE: TEXAS MUNICIPAL LEAGUE COMMUNITY IMPACT
redeemable gift certicates that can be cashed out, TML representative Amber McKeon-Mueller said in a statement. For this reason, many still believe game room machines operate within a legal gray area. In recent years, state lawmakers have introduced several bills to regulate or legalize gambling devices, but many of them have failed. If legislation to amend the constitution passes in the legislative ses- sion, voters get the nal say in November elections.
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