Fifth Appellate District Affirms Preliminary Injunctions Prohibiting Internet “Sweepstakes” Café Operations

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Businesses that sell computer “time” in exchange for entries into on-line sweepstakes games likely violate California’s antigambling laws, the Fifth District Court of Appeal held last week.  In People v. Grewal (CON F065450/F065451/F065689), the Court upheld three preliminary injunctions that prohibit “sweepstakes” operations at Internet café businesses in Kern County.  The injunctions were previously granted to the Kern County District Attorney against specific businesses. Read the full opinion here.

The opinion offers additional legal support for the many cities and counties in California enacting ordinances prohibiting – or heavily regulating – Internet cafés offering sweepstakes games.  The businesses give customers “credits” toward playing the on-line games in exchange for purchasing “time” on computer terminals.  If a customer wins, they typically receive their cash prize at the counter.  Most of the games resemble casino-style slot machines.   The California Attorney General and Bureau of Gambling Control consider such businesses to be illegal gambling operations.

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