Opinion
12-4194-BLS1.
12-17-2012
CITY CYBER CAFÉ, LLC v. Martha COAKLEY, et al.[1]
MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION
THOMAS P. BILLINGS, Associate Justice.
In this action plaintiff City Cyber Café, LLC (" City Cyber") challenges the constitutionality of Section 5B of General Laws, c. 271, which criminalizes the use of video monitors and game-simulating video displays to communicate the results of otherwise lawful sweepstakes promotions. Now before the Court is City Cyber's motion for a preliminary injunction enjoining the defendants from enforcing Section 5B as violating the First and Fourteenth Amendments of the United States Constitution and Articles 6, 7, and 16 of the Massachusetts Declaration of Rights. For the reasons that follow, the motion is DENIED.
BACKGROUND
" By definition, a preliminary injunction must be granted or denied after an abbreviated presentation of the facts and the law." Packaging Indus. Group, Inc. v. Cheney, 380 Mass. 609, 616 (1980). Here, I have considered the Verified Complaint and attached affidavits and exhibits, and the arguments advanced in the parties' briefs. The material facts in the record thus far are as follows.
City Cyber operates three business center/internet stores located in Holyoke, Springfield, and Worcester, Massachusetts. Each store is equipped with computer work stations that provide a variety of computer applications and internet access, and which are available for on-premises use at no charge. The stores also sell Tel-Connect and Inter-Connect prepaid telephone calling card products which provide telephone access, respectively, to the forty-eight contiguous states for about three cents a minute or worldwide telephone access for between about five and twenty cents per minute, depending on the call destination. Purchasers can, at any time, buy additional minutes on either card. The card expires one year after the first use or subsequent purchase, whichever is later.
To promote both the phone cards and the City Cyber brand, City Cyber sponsors a " free" game of chance sweepstakes. Patrons may participate in the sweepstakes in any of three ways: (1) by mail-in request via a hand-written postcard, which requires no purchase and is limited to two hundred " points" per request; (2) by in-person request requiring no purchase, limited to one hundred " points" per person per day; or (3) by a point-of-sale purchase of prepaid telephone time, at the rate of one hundred " points" per one dollar purchase of Tel-Connect or Inter-Connect time. Each point is the electronic equivalent of a paper game piece that reveals a promotional prize that is worth, depending on the specific game piece, between $0 and $4,200. A person can therefore enter the sweepstakes with no purchase, or by buying a phone card.
The electronic game pieces are drawn from a finite pool that is pre-loaded into servers in each of the stores. The plaintiff's computer system assigns to each participant the number of pieces commensurate with that participant's transaction. Each participant in the sweepstakes, regardless of how he or she enters, receives an account number. For participants who buy a phone card, the account number is encoded on a magnetic strip on the card.
Participants can find out whether they have won in any of three ways: (1) by asking a store clerk at the point of sale; (2) by sitting at a computer station and choosing a " reveal" option, whereby the results are immediately displayed on the computer screen; or (3) by playing one of a variety of simulated video games, including casino games, which reveal the value of the electronic tickets one at a time or in groups. Playing the game does not alter the outcome of the sweepstakes; the winning (or losing) qualities of any particular game piece remain unchanged, regardless of the method by which the participant enters the sweepstakes or by which the prize is revealed. Thus, whether a participant finds out her prize by asking store employees, accessing the information immediately on the computer, or playing the simulated game, the end result is unchanged.
In this respect, these " entertaining displays" are to games as WWE is to wrestling.
Prior to opening its stores in 2009, the plaintiff sought and received the assurance of local law enforcement officials, including the Massachusetts State and local police and the Hampden County District Attorney's office, that the sweepstakes promotion did not violate any laws. On August 1, 2012, however, Governor Patrick signed into law House Bill 3765 (St.2012, c. 187), which created Section 5B. Section 5B went into effect on October 30, 2012, and makes it unlawful to " conduct a sweepstakes through the use of an entertaining display, including the entry process or the reveal of a prize, " or to promote such a sweepstakes. An " entertaining display" is defined as " any visual information, capable of being seen by a sweepstakes entrant, that takes the form of actual game play or simulated game play." The full text of Section 5B is reprinted in the Appendix to this decision.
Notably, Section 5B does not criminalize the act of conducting or promoting sweepstakes or lotteries, a subject addressed elsewhere in the General Laws. Rather, it prohibits the communication of the result to the participant via an actual or simulated video game.
Various other sections of Chapter 271— especially, section 7— impose criminal penalties for running or promoting lotteries. " The ‘ essence of a lottery is a chance for a prize for a price.’ " Commonwealth v. McLaughlin, 307 Mass. 230, 232 (1940) (citation omitted). The " price" element is missing where no purchase or payment is required and where those who receive their chance in exchange for purchasing a product " gain[ ] no advantage whatsoever over those who received their game pieces without making any purchases." Mobil Oil Corp. v. Attorney General, 361 Mass. 401, 407 (1972). " [W]hether or not a particular scheme amounts to a lottery" — e.g., perhaps, one in which product-purchasers are eligible to receive many more chances than non-purchasers— " depends upon the particular facts and circumstances of each case." Id. at 406.
As a result of the passage of Section 5B, the plaintiff, in light of the potentially substantial penalties associated with a violation, chose to close its stores. It has laid off twenty-seven employees and estimates that it is losing $60,000 a week in profits. The Verified Complaint, filed on November 16, 2012, seeks preliminary and permanent injunctions enjoining the defendants from enforcing Section 5B, and declaratory judgment to the effect that Section 5B is void as repugnant to the First Amendment and Article 16.
I denied the plaintiff's request for a temporary restraining order on November 16, 2012, with a reference to Knox v. MSPCA, 12 Mass.App.Ct. 407, 408-409 (1981) and cases cited.
DISCUSSION
A. Standard for Injunctive Relief.
Under the familiar balancing test set forth in Packaging Indus. Group, 380 Mass. at 617, a preliminary injunction is warranted only when the moving party establishes both a likelihood of success on the merits of the claim, and a substantial risk of irreparable harm in the absence of an injunction. Once these elements are established, the Court must balance the threatened harm against the harm that an injunction will inflict on the opposing party. Id. In balancing those considerations, " [w]hat matters as to each party is not the raw amount of irreparable harm the party might conceivably suffer, but rather the risk of such harm in light of the party's chance of success on the merits." Id. " Only where the balance between these risks cuts in favor of the moving party may a preliminary injunction properly issue." Id. " [T]he significant remedy of a preliminary injunction should not be granted unless the plaintiff[ ] ha[s] made a clear showing of entitlement thereto." Student No. 9 v. Board of Educ., 440 Mass. 752, 762 (2004). See also Landry v. Attorney General, 429 Mass. 336, 343 (1999) (remedy of a preliminary injunction " should not be grant[ed] unless [the plaintiffs] by a clear showing, carrie[d their] burden of persuasion").
The defendants argue that a higher standard for injunctive relief is warranted, where the Court's use of its injunctive and equitable powers could interfere with the pursuit of criminal prosecutions. They rely on Norsica v. Board of Selectmen of Provincetown, 368 Mass. 161, 167 (1975), where the Supreme Judicial Court held that a court of equity cannot " interfere in the enforcement of penal statutes even though invalid unless there be exceptional circumstances and a clear showing that an injunction is urgently necessary to afford adequate protection to rights of property so as to circumvent great and irreparable injury until the validity of the particular penal statute is sustained." Such exceptional circumstances exist when the plaintiff has shown
" that unless relief is granted a substantial right of the plaintiff will be impaired to a material degree; that the remedy at law is inadequate; and that injunctive relief can be applied with practical success and without imposing an impossible burden on the court or bringing its processes into disrepute."Bunker Hill Distributing, Inc. v. District Attorney for the Suffolk District, 376 Mass. 142, 146 (1978), quoting Kenyon v. Chicopee, 320 Mass. 528, 534 (1946). That one may be injured in respect to his business by prosecution for an alleged crime is not, by itself, a sufficient reason for an injunction to issue against criminal prosecution. Id.
That said, the plaintiff in this case has alleged a violation of its right to free speech under the First Amendment. The Court may entertain a " pre-enforcement challenge to a statute carrying criminal penalties ... when the plaintiff has alleged an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by [the] statute, and there exists a credible threat of prosecution." Rhode Island Ass'n. of Realtors, Inc. v. Whitehouse, 199 F.3d 26, 30-31 (1st Cir.1999); see also City of Lakewood v. Plain Dealer Publ. Co., 486 U.S. 750, 759 (1988) (when a statute poses a risk to the exercise of free speech, a facial challenge is permissible, if not preferable, as long as the law has a sufficiently close nexus to expression, or to conduct commonly associated with expression, " to pose a real and substantial threat of the identified censorship risks"). In this case, the plaintiff has raised a colorable enough claim under the First Amendment and Article 16, and has made a plausible enough showing of irreparable harm, to merit a closer look.
B. Likelihood of Success on the Merits.
Much in this case depends on whether reporting the results of a game of chance via an " entertaining display" is appropriately characterized as protected speech, or as conduct falling under the police power; that is, " the Legislature's power to enact rules to regulate conduct, to the extent that such laws are ‘ necessary to secure the health, safety, good order, comfort, or general welfare of the community.’ " Goodridge v. Department of Public Health, 440 Mass. 309, 322 (2003) (citation omitted). " Statutes that impose criminal penalties on constitutionally protected speech are strictly scrutinized, and a law prohibiting a substantial amount of protected expression is unconstitutional on its face." Commonwealth v. Kenney, 449 Mass. 840, 847 (2007). Regulation of conduct, on the other hand, is subject to deferential " rational basis" review, and normally requires only a showing that the statute " bears a real and substantial relation to the public health, safety, morals, or some other phase of the general welfare." Cote-Whiteacre v. Department of Public Health, 446 Mass. 350, 366 (2006), quoting Coffee-Rich, Inc. v. Commissioner of Pub. Health, 348 Mass. 414, 422 (1965) and Sperry & Hutchinson Co. v. Director of the Div. on the Necessaries of Life, 307 Mass. 408, 418 (1940).
As noted at the outset of this decision, City Cyber challenges Section 5B under the First Amendment to the United States Constitution and under Articles 6, 7, and 16 of the Massachusetts Constitution. The connection of Article 6 (prohibiting inherited titles and offices) or 7 (asserting the people's " right to institute government; and to reform, alter, or totally change the same") to the issues in this case is not further explicated in the motion papers, and eludes me.
The reference to Article 16— " The right of free speech shall not be abridged" — on the other hand, is spot on. Although the SJC has expanded Article 16's protections beyond those of the First Amendment in at least one context, see Mendoza v. Licensing Bd. of Fall River, 444 Mass. 188, 201 (2005) (adult entertainment), I have assumed here that the two are coextensive for purposes of this case.
Both sides agree, as they must, that the particular form of expression in this case— a video game, rather than a political broadside or the great American novel— does not disentitle it to consideration under First Amendment.
Like the protected books, plays, and movies that preceded them, video games communicate ideas— through many familiar literary devices (such as characters, dialog, plot, and music) and through features distinctive to the medium (such as the player's interaction with the visual world). That suffices to confer First Amendment protection.Brown v. Entertainment Merchants Ass'n., __ U.S. __, 131 S.Ct. 2729, 2733 (2011) (affirming injunction against enforcement of California law prohibiting sale or rental of violent video games to minors).
Nor, however, does the fact that a particular activity involves expression or communication mean, in and of itself, that it is properly characterized as protected speech for constitutional purposes.
" [I]t has never been deemed an abridgment of freedom of speech or press to make a course of conduct illegal merely because the conduct was in part initiated, evidenced, or carried out by means of language, either spoken, written, or printed." ... [T]he State does not lose its power to regulate commercial activity whenever speech is a component of that activity.Ohralik v. Ohio State Bar Ass'n., 436 U.S. 447, 456 (1978) (citation omitted); accord, Bulldog Investors General Partnership v. Secretary of the Commonwealth, 460 Mass. 647, 700-01 (2011); Zora v. State Ethics Commission, 415 Mass. 640, 651 (1993).
A handful of recent decisions have considered the question of whether a prohibition resembling Section 5B, applied to a business like City Cyber's, offends the First Amendment. In Hest Technologies, Inc v. State of North Carolina, 725 S.E.2d 10 (N.C.App. 2012), a divided panel of the Court of Appeals of North Carolina answered in the affirmative. There, the plaintiff brought a declaratory judgment action seeking a declaration that a statute identical to Section 5B in all material respects was an unconstitutional regulation of protected speech, and to enjoin the state from enforcement. Id. at 12. As the Commonwealth in this case has done, the State argued that the statute regulated conduct, not expression. Id. at 12-13.
The majority found that although the statute indeed regulated some conduct, the broad manner in which it did so was " problematic." Id. at 13. Noting that the First Amendment protects both " the creation and dissemination of information, " Sorrell v. IMS Health, Inc., __ U.S. __, 131 S.Ct. 2653, 2667, 180 L.Ed.2d 544, 558 (2011) and video games, Brown, supra, the court reasoned that " banning the dissemination of sweepstakes results cannot be characterized as merely a regulation of conduct .... [the statute] directly regulates protected speech under the First Amendment." 725 S.E.2d at 13 (emphasis in original). It concluded that the statute was " unconstitutionally overbroad, " where the definition of " entertaining display" encompassed all forms of video games, from simple simulations to more complex games.
Judge Hunter, in dissent, noted that the video games were proscribed only when used to announce the results of a sweepstakes, and therefore concluded that " the statute merely regulates conduct and not speech" and that it was a lawful exercise of the police power. 725 S.E.2d at 16. The Hest case is presently on appeal to the North Carolina Supreme Court. See Hest Technologies, Inc. v. State, 731 S.E.2d 836 (2012).
The United States District Courts for the Middle District of Florida and the Middle District of Pennsylvania have held otherwise. In Allied Veterans of the World, Inc. v. Seminole County, Florida, 783 F.Supp.2d 1197, 1200 (M.D. Fla.2011; J. Antoon, II, J.) (" Allied Veterans I ") and Allied Veterans of the World, Inc. v. Seminole County, Florida, 2011 WL 3958437 (M.D.Fla. Sept. 8, 2011) at *1 (" Allied Veterans II "), aff'd, 468 Fed.Appx. 922 (11th Cir. March 21, 2012), the court considered a request for preliminary injunction against enforcement of a county ordinance prohibiting the use of " simulated gambling devices." These were defined as " any device that, upon connection with an object, is available to play or operate a computer simulation of any game, and which may deliver or entitle the person or persons playing or operating the device to a payoff." Customers purchased computer internet time for which they received a proportional number of entries into a sweepstakes. Participants could learn the results in the same three ways as participants in City Cyber's sweepstakes.
After the Allied Veterans I decision, the plaintiffs appealed; the U.S. Supreme Court decided the Brown case; and the plaintiffs sought reconsideration in the district court of Allied Veterans I, and/or a stay pending appeal. Judge Antoon denied both requests in Allied Veterans II. The Eleventh Circuit Court of Appeals affirmed, albeit without directly confronting the speech vs. conduct issue. Allied Veterans of the World, Inc. v. Seminole County, Florida, 468 Fed.Appx. 922 (11th Cir. March 21, 2012). The case remains pending in the district court.
It does not appear that customers were offered the option to play for free. The opinion does not address whether this fact caused the sweepstakes to violate the Florida gambling law.
Judge Antoon, following the approach of the dissent in Hest, held that the ordinance regulated conduct, not speech. " None of the video games at issue is banned on its own, " he observed; " only the playing of such a game in conjunction with the possibility of a payoff is banned." Allied Veterans I at 1202. " [U]nlike the regulation in Brown, ... the Ordinance in no way bans access to the games. The games at issue here can be made, distributed, played, and accessed by anyone without violating the Ordinance." Allied Veterans II at *1. The requested injunction was therefore denied.
A different judge of the same court reached the same conclusion as in Allied Veterans, on somewhat different facts. In Crisante v. Coats, 2012 WL 1565424 (M.D. Fla. May 2, 2012; E. Kovachevich, J.), as here, customers of the plaintiffs' internet cafe could enter a sweepstakes for free by mail or in person, or by buying prepaid phone cards. Id. at *1. They could access the results by asking the point of sale clerk or by playing a simulated video game. While players could interact with the game, the results were predetermined.
The plaintiffs, faced with a threat of prosecution under Florida's gambling laws, argued that the use of computers to communicate the results of a contest, promotion or sweepstakes via entertaining video games was protected expression under the First Amendment. Id. at *4. Judge Kovachevich disagreed, however, following Judge Altoon's approach and finding that like the Seminole County ordinance, " any potential enforcement of Florida's gambling laws pursued by Defendants here restricts conduct, not speech." She therefore dismissed the First Amendment claim with prejudice. Id. at *11.
Finally, in Telesweeps of Butler Valley, Inc. v. Kelly, 2012 WL 4839101 (M.D. Pa. October 10, 2012; R. Mariani, J.), the court considered the constitutionality of a Pennsylvania statute very similar to Section 5B. As in the City Cyber Cafes, Telesweeps patrons could enter a sweepstakes in three ways— by requesting up to 100 points per day in person, requesting up to 200 points by mail, or buying phone cards— and could discover the results either from the cashier or by playing the game. Id. at *2. The results were predetermined and could not be influenced either by the mode of entry or the manner in which the game was played. Id.
Judge Mariani concluded that the statutorily prohibited activity constituted gambling, because the statute incorporated the elements of consideration (direct or indirect), a chance to win, and a reward . Id. at *5. He distinguished Brown, where the games contained plots and storylines, from simulated gambling programs that merely display results via " simplistic games." Id. at *6. He went on to discuss Hest, opining that the majority had " placed too great an emphasis on the phrase ‘ entertaining display" in isolation from others." Id. at *9. He agreed with the dissent that the statute regulated conduct rather than speech, and that it survived rational basis review. Id.
Judge Mariani noted that with a 25-point minimum " bet" for the simulated games, a walk-in customer could play up to four games for free; after that, s/he was required to " pay to play" by purchasing phone cards. 2012 WL 4839101 at *9. This met Pennsylvania's definition of illegal gaming. Id., citing Commonwealth v. Wintel, Inc., 829 A.2d 753, 758 (Pa.Commw.Ct.2003). So far as I know, this precise issue— the legality of a lottery where paying participants may buy many more chances than are allowed to non-paying walk-ins— has not been addressed under Massachusetts law. See footnote 3, supra, and contrast Commonwealth v. Webb, 68 Mass.App.Ct. 167, 171 (2007) (holding that an internet café 's " prominently featured opportunity to play the games for free, without any related purchase, for an unlimited number of times, defeat[ed] the requisite statutory element that a price be paid"; emphasis supplied).
I agree with the Allied Veterans, Crisante, and Telesweeps courts, and with the dissent in Hest, that what is regulated here is conduct, not speech. " The suppression of gambling lies within the domain of the police power of the Commonwealth, and the exercise of this power, which began [more than] three centuries ago, has been governed by statutes of State wide application." Commonwealth v. Wolbarst, 319 Mass. 291 (1946); see Mobil Oil Corp. v. Attorney General, 361 Mass. 401, 413 (1972) (sweepstakes). To acknowledge that the Legislature's posture toward games of chance has evolved appreciably since our beginnings as a Puritan theocracy is not to doubt its power to draw lines, balance competing interests, and make reasoned judgments concerning the welfare of the citizens of Massachusetts. Such judgments might include, for example, a prohibition against all lotteries of any description, or against those without a genuine free entry option (as G.L. c. 271, § 7 prohibits), or against those conducted in a manner deemed conducive to underage patronage and/or the sorts of predation, deception, violent and nonviolent crime, and addiction associated with casino-style gambling, but without casino-style licensure and regulation.
To be sure, on the most simplistic level, Section 5B distinguishes between lawful and unlawful activity based on the manner of communicating a piece of information, which naturally calls the First Amendment and Article 16 to mind. I agree with the judge in Telesweeps, however, that this focus " place[s] too great an emphasis on the phrase ‘ entertaining display’ in isolation from others." Telesweeps at *9. It is not expression per se, but expression as an incidental part of the conduct of a game of chance, that is banned. " ‘ Plaintiffs are free to allow anyone to play their video games so long as the video games are not used to conduct or promote sweepstakes.’ " Id., quoting Hest, 725 S.E.2d at 17 (Hunter, J., dissenting).
None of the video games at issue is banned on its own— only the playing of such a game in conjunction with the possibility of a payoff is banned. Therefore, [the plaintiff is] free to provide the video games to [its] patrons and [its] patrons are free to play them— and thus make and receive whatever protected message is communicated by the video game— so long as the games are not associated with a payoff.Allied I,
783 F.Supp.2d at 1202. All that would be missing is the announcement that the player had, or had not, won a monetary prize in a game of chance.
That separating the " entertaining display" from the sweepstakes might rob it of much of its entertainment value only highlights the essential nature of the beast. All gambling requires communication, both to play and to announce the winner. Although this is speech of a sort, " it is totally divorced from a purpose of expressing ideas, impressions, feelings, or information unrelated to the game itself." Id. The use of " entertaining displays" that Section 5B prohibits is the equivalent of such announcements as a blackjack dealer's " Twenty-one!, " a slot machine's three cherries, or the croupier's " Your winnings, sir" spoken to Captain Renault, and it deserves no more protection than these. See Telesweeps at *6, citing There to Care, Inc. v. Comm'r. of Indiana Dep't. of Revenue, 19 F.3d 1165, 1167-68 (7th Cir.1994).
In short: although Section 5B regulates conduct that has both " speech" and " non-speech" elements, its " purpose ... is entirely unrelated to the suppression of free expression, " and any limitation of First Amendment and Article 16 freedoms is " entirely incidental." Zora, 415 Mass. at 651. It is therefore a regulation of conduct, not speech, and falls within the Legislature's traditional police power.
Finally, City Cyber's overbreadth argument overlooks the fact that " [t]he overbreadth doctrine is not applied in commercial speech cases because the concern that speech will be chilled is much weaker in the case of a commercial speaker." Bulldog Investors, 460 Mass. at 677, citing Bates v. State Bar of Ariz., 433 U.S. 350, 380-381 (1977). Even if the doctrine were available, moreover, Section 5B prohibits " entertaining displays" (be they simulated casino games, Angry Birds, or Super Mario Brothers) only when used to announce the results of a sweepstakes; i.e., only conduct. " Invalidation for overbreadth is strong medicine that is not to be casually employed, " United States v. Williams, 553 U.S. 285, 292 (2008) (citations and internal quotation marks omitted), and it has no legitimate application here. See Telesweepstakes at *12-*13.
City Cyber therefore has not shown a substantial likelihood of success on the merits. It has shown that its business has suffered and, absent an injunction, will continue to suffer, but this interest is equaled or outweighed by the Commonwealth's interest in promoting " the public safety, health, morals, and welfare, " Bay State Harness Horse Racing & Breeding Ass'n. v. State Racing Comm'n., 344 Mass. 688, 699 (1962), through lawful regulation of gambling activity.
ORDER
For the foregoing reasons, the plaintiff's Motion for Preliminary Injunction is DENIED.
APPENDIX: TEXT OF G.L. C. 271, § 5B
(a) As used in this section the following words shall, unless the context clearly requires otherwise, have the following meanings:
" Electronic machine or device", a mechanically, electrically or electronically operated machine or device that is: (i) owned, leased or otherwise possessed by a sweepstakes sponsor or promoter, or any sponsors, promoters, partners, affiliates, subsidiaries or contractors thereof; (ii) intended to be used by a sweepstakes entrant; (iii) uses energy; and (iv) capable of displaying information on a screen or other mechanism; provided, that an electronic machine or device may, without limitation: (1) be server-based; (2) use a simulated game terminal as a representation of the prizes associated with the results of the sweepstakes entries; (3) utilize software such that the simulated game influences or determines the winning or value of the prize; (4) select prizes from a predetermined finite pool of entries; (5) utilize a mechanism that reveals the content of a predetermined sweepstakes entry; (6) predetermine the prize results and stores those results for delivery at the time the sweepstakes entry results are revealed; (7) utilize software to create a game result; (8) require deposit of any money, coin or token, or the use of any credit card, debit card, prepaid card or any other method of payment to activate the electronic machine or device; (9) require direct payment into the electronic machine or device, or remote activation of the electronic machine or device; (10) require purchase of a related product having legitimate value; (11) reveal the prize incrementally, even though it may not influence if a prize is awarded or the value of any prize awarded; (12) determine and associate the prize with an entry or entries at the time the sweepstakes is entered; (13) be a slot machine or other form of electrical, mechanical, or computer game; and provided further, that " electronic machine or device" shall also include gambling devices as defined in section 5A.
" Enter" or " entry", the act or process by which a person becomes eligible to receive any prize offered in a sweepstakes.
" Entertaining display", any visual information, capable of being seen by a sweepstakes entrant, that takes the form of actual game play or simulated game play.
" Prize", any gift, award, gratuity, good, service, credit or anything else of value, which may be transferred to a person, whether possession of the prize is actually transferred, or placed on an account or other record as evidence of the intent to transfer the prize.
" Sweepstakes", any game, advertising scheme or plan, or other promotion, which, with or without payment of any consideration, a person may enter to win or become eligible to receive any prize, the determination of which is based upon chance.
(b) It shall be unlawful for any person to knowingly possess with the intent to operate, or place into operation, an electronic machine or device to:
(1) conduct a sweepstakes through the use of an entertaining display, including the entry process or the reveal of a prize; or (2) promote a sweepstakes that is conducted through the use of an entertaining display, including the entry process or the reveal of a prize.
(c) Nothing in this section shall be construed to make illegal any activity which is lawfully conducted: (1) by the state lottery commission, under sections 24, 24A, 27, 27A, 37, 38, and 39A of chapter 10; (2) as pari-mutuel wagering on horse races, whether live or simulcast, under chapters 128A and 128C; (3) as the game of bingo conducted under chapters 10 and 271; (4) as charitable gaming, conducted under chapter 271; or (5) by any retailer whose primary business is the sale of groceries, whereby the sweepstakes is directly related to the sale of groceries and the potential prize provided through the sweepstakes may not be redeemed for cash and may only be used as a discount to reduce the price of items purchased from the retailer.
(d) Any person who violates this section shall be punished by a fine of not more than $250,000 per electronic machine or device placed into operation or by imprisonment in state prison for not more than 15 years, or by both such fine and imprisonment.