Slots on the sly?

Phone card machines called gambling devices

Slot machines on Beacon Hill may be in legislative purgatory, but similar devices that allow people to play for cash are popping up across the state.

The devices ostensibly sell high-priced phone cards, but their true purpose appears to be to let people play video games that can win them cash. Police officials say the devices are basically gambling machines, but the owners say the equipment is perfectly legal.

At the China Roma restaurant across from City Hall in Revere, an employee referred to the three devices in the dining room as slot machines. Patrons insert a dollar and get back a tiny piece of paper with a personal identification number on it that can be used to make long distance phone calls to North and South America. They also receive the chance to play a video game that requires them to press a series of buttons in an attempt to make spinning icons line up. If they are successful, they receive a receipt that can be redeemed for cash at the restaurant.

Revere Police Chief Terence Reardon says the machines skirt the law. “They are disguised as phone card dispensers, but are actually a ruse for gambling as far as I am concerned,” he says. “It’s a sham.”

But Thomas Butters, the attorney for King’s Prepaid Phone Cards in Billerica, the owner of the devices at China Roma, says they are vending machines, not slot machines.  

“The difference is we’re selling something that has value,” Butters says. “When people put a dollar in, they’re buying a phone card.  They then are given the opportunity to play the game and win some money.  The purpose of the promotional games supports the sale of the phone cards. That’s why it’s all quite legal.”

The devices at China Roma are confusing to use.  For example, they offer conflicting information on how many calling minutes are being purchased. One of the video screens promised 30 minutes of calling time for $1, while the card itself indicated the cost was five minutes for $1. The card actually lasted five minutes, which works out to 20 cents a minute, five to eight times what most calling cards charge. The phone cards at China Roma also carry an expiration date of one month, but patrons are not told that until after they buy the card.

After the phone card is issued, patrons can play a sweepstakes game on the same machine for no additional money, but no instructions or rules are provided on how to play the game. The video screen resembles a bingo card of sorts with icons like cherries and watermelons that spin vertically when a button is pushed. When another button is pushed, the spinning comes to a halt.  If identical icons line up three-in-a-row vertically, horizontally, or diagonally the player wins. The payout increases if multiple alignments occur, but the payout amounts and odds of winning are not provided.

The machines do have a notice that tells users that they can play for free — that is, without having to buy a phone card – by pressing a “free-play” button.  When I pressed the button, out came a piece of paper that required me to supply 15 pieces of information like my name, address, phone number, and, oddly, the name and phone number of my closest relative not living with me. A photo ID is required and I also had to sign the form affirming that I was over 18.

Even with a completed form in hand, I didn’t get to play for free. The waitresses had no idea what to do with the form and no one else was available to help me. Few if any players apparently bother to fill out the form. One woman feeding dollar bills into a nearby machine said she knew nothing about the free-play process. She had won $125 the previous day, she said. The owner of China Roma could not be reached for comment.

Butters, the attorney representing King’s Prepaid Phone Cards, says the devices at China Roma and other locations don’t meet the standards courts have used for identifying illegal lotteries. Lotteries involve three essential elements: a game of chance, payment of some consideration to play the game of chance, and a prize. Remove any one of these elements and there is no lottery.  Butters says his client’s devices don’t satisfy the payment requirement because users are actually buying the phone card with the money they insert, although no patrons at China Roma said they used the calling cards.

Users can also play the video game for free, which was the key to a 2007 Appeals Court decision upholding the legality of the machines in Fall River. In that case, Nutel Communications of New Bedford was initially convicted of running an illegal lottery. But the Appeals Court reversed the decision, ruling that the devices did not represent an illegal lottery because people could play the game for free — in other words, there was no consideration being paid to play the game.

“The Commonwealth’s suggestion that the ‘free play’ option was illusory is without evidence to support it,” the court ruled.  “The investigating officers made no attempt to take advantage of the free-play option, and gave no testimony concerning any unsuccessful efforts by any other patrons to play for free.”  The state Supreme Judicial Court upheld the Appeals Court decision.

When officials at the state Lottery Commission expressed concern to Attorney General Martha Coakley about the spread of the phone card machines, Richard Grundy, chief of Coakley’s crime bureau, told them last year that it was not possible to make a blanket determination about their legality and each situation would have to be reviewed separately based on the facts specific to the case.

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The machines are popping up in Revere, Chelsea, and elsewhere across the state, but one community had success in shutting them out. In Salisbury last year, police seized a total of 10 King’s Prepaid Phone Card machines and $20,000 in cash from four local convenience stores.  King’s then sued the town, seeking an injunction and the return of the equipment and the money.

After Superior Court Judge Kenneth Fishman denied King’s request for an injunction, the parties decided to reach a settlement that called for the police to return the video machines and the $20,000, and for King’s to steer clear of Salisbury with the machines they were using. “It was a good outcome for the town,” says Police Chief David L’Esperance.