Filed 6/25/15




      IN THE SUPREME COURT OF CALIFORNIA


THE PEOPLE ex rel. LINDA GREEN, as           )
DISTRICT ATTORNEY, etc.,                     )             S217896, S217979
                                             )
                Plaintiff and Respondent,    )
                                             )             Ct.App. 5 F065450
                v.                           )
                                             )
KIRNPAL GREWAL,                              )                Kern County
                                             )        Super. Ct. Nos. CV-276959,
                Defendant and Appellant.     )         CV-276958, CV-276961,
                                             )          CV-276603, CV-276962
[And four other cases.*]                     )               (Consolidated)
                                             )


        Slot machines, sometimes called ―one-armed bandits‖ (although younger
users might wonder why), have long been outlawed in California. Under review
are devices that resemble traditional casino-style slot machines in some ways and
offer users the chance to win sweepstakes prizes. Because they employ modern
technology, the devices differ from traditional slot machines in some ways. We
must decide whether the devices come within the statutory definition of a ―slot




____________________
*      People ex rel. Green v. Walker (No. F065451); People ex rel. Green v.
Stidman (No. F065689); People ex rel. Green v. Nasser (No. F066645); People ex
rel. Green v. Elmalih (No. F066646).
machine or device‖ in Penal Code section 330b.1 We conclude they do and affirm
the judgments of the Court of Appeal, which reached the same conclusion.
                      I. FACTS AND PROCEDURAL HISTORY
       These facts are taken largely from the Court of Appeal opinions authored
by Justice Kane.
       In these cases, which we have consolidated for argument and this opinion,
the People of the State of California, by and through the District Attorney of Kern
County, filed civil actions against defendants Kirnpal Grewal, John C. Stidman,
Phillip Ernest Walker, Kamal Kenny Nasser, and Ghassan Elmalih, operators of
Internet cafés in Kern County. Three distinct, albeit similar, devices operated at
several Internet café businesses are at issue here. We will first describe the
businesses and devices as they existed at the time of the hearings in the superior
court, then the procedural background.

       A. The A to Z Café; the OZ Internet Café and Hub
       Defendant Kirnpal Grewal owned the A to Z Café, and defendant Phillip
Ernest Walker owned the OZ Internet Café and Hub (the OZ), both in Bakersfield.
The record shows, and the parties agree, that Grewal‘s business operated a
sweepstakes system essentially identical to that of the OZ. Accordingly, we will
discuss the OZ‘s system.
       Among other products, the OZ sold computer and Internet time (hereafter,
Internet time) on computer terminals on its premises. The OZ promoted the sale
of Internet time and other products with a sweepstakes giveaway implemented

1      All further statutory citations will be to the Penal Code unless otherwise
indicated. As will be seen, section 330b refers to a ―slot machine or device.‖
However, we will sometimes refer to what the section proscribes as simply a slot
machine.



                                          2
through a software system that a company known as Figure Eight Software
provided. Participants in the sweepstakes had the chance to win cash prizes
varying from small amounts to a top prize of $10,000 as set forth in the
sweepstakes‘ odds tables.
       OZ customers could purchase Internet time for $10 per hour. When a
customer purchased Internet time, an employee assigned the customer a personal
identification number (PIN). The employee created an account by which the
customer could access the computers and Internet as well as play sweepstakes
computer games. Customers were not charged for Internet time while they were
playing the computer sweepstakes games. At the time of purchase, the customer
received 100 ―sweepstakes points‖ for each dollar spent. Walker stated that
―[c]ustomers purchase product[s] consisting mostly of computer and Internet time
at competitive prices and receive free sweepstake points in addition to the product
purchased.‖ Additionally, a customer might receive 100 free sweepstakes points
every day that the customer came into the OZ, and first-time customers received
500 additional sweepstakes points. These sweepstakes points could be ―used to
draw the next available sequential entry from a sweepstake contest pool.‖ This
could be done and the result revealed in one of three ways: (1) asking an OZ
employee to reveal a result, (2) pushing an instant reveal button at the computer
station, or (3) playing computer sweepstakes games at the computer terminals that
appeared similar to common games of chance.
       The sweepstakes rules provided that no purchase was necessary to enter the
sweepstakes. According to Walker, noncustomers could obtain free sweepstakes
entries by asking an employee at the OZ or by mailing in a request.
       According to Walker, to access the computers, customers had to sign a
―Computer Time Purchase Agreement‖ form. On the form, the customers had to
acknowledge that they understood the following matters before using the OZ

                                         3
computers: (1) that they were purchasing computer time and (2) the sweepstakes
computer games were ―not gambling,‖ but were a ―promotional game‖ in which
all winners were predetermined. On the form, the customers affirmed that they
understood ―[t]he games have no [e]ffect on the outcome of the prizes won,‖ but
were merely an ―entertaining way to reveal [their] prizes and [they] could have
them instantly revealed and would have the same result.‖
       Walker‘s declaration explained what happened when a customer used the
sweepstakes computer game: ―If a customer utilizes the pseudo-interactive
entertaining reveal interface the customer can encounter some games that have
appearances similar to common games of chance.‖ However, before any
―spinning wheels or cards‖ appeared on the screen, ―the sweepstakes entry has
already been drawn sequentially from a pool of entries and is predetermined.
There is no random component to the apparent action of the images in the
interface even though it simulates interactivity. Instead, the images will display a
result that matches the amount of any prize revealed in the entries. [Citation.] [¶]
As told to the customer in the rules and in disclaimers, the pseudo-interactive
interface does not ‗automatically‘ or ‗randomly‘ utilize any play to obtain a
result.‖
       Walker also described in greater detail the operation of the software system
the OZ used to run the sweepstakes. His declaration stated that under that
software system, the issue of whether customers had won a cash prize was
determined when their entries were drawn from a sweepstakes pool. Each such
entry had a previously assigned cash prize of zero or greater. Entries were drawn
sequentially from one of 32 sweepstakes pools (also called ―multiple finite deals
of entries‖) that the software company created. The software company
prearranged the entries in each pool in a set order or sequence, and the OZ had no
control over that order or sequence or the corresponding results. Access to a

                                          4
particular sweepstakes pool was determined by how many points customers chose
to use (or bet) at any one time. Each pool had its own prizes and its own separate
sequence of entry results. When customers selected a sweepstakes pool, the
software system assigned them the next available entry result in that pool, in
sequence. At that point, the result was established and could not be affected by
the computer game play, which merely revealed the established result. Walker
stated that a specific sequential entry would yield the same result regardless of the
method the customers used to draw and reveal it.

       B. I Zone Internet Café
       Defendant John C. Stidman owned the I Zone Internet Café (I Zone) in
Bakersfield. Among other products, I Zone sold Internet time to the public for $20
per hour, which customers could use on computer terminals located on the I Zone
premises. To promote the sale of Internet time and its other products, I Zone
offered a sweepstakes to customers when they made a purchase. Noncustomers
might also enter the sweepstakes; that is, no purchase was necessary to enter. To
enter a sweepstakes without purchasing Internet time or other products, a person
could receive up to four free entries from the cashier each day on request. Four
additional entries were available by mailing a form with a self-addressed, stamped
envelope. A company known as Capital Bingo provided a computer software
system that effectuated the sweepstakes.
       Under the software system, a purchaser of Internet time or other products at
I Zone received sweepstakes points for each dollar spent. A customer also
received sweepstakes points for the first purchase of the day and for being a new
customer. The customer received a white plastic card with a magnetic strip, which
an I Zone employee activated at the register. A customer swiping the card at an
open computer terminal was given the option of using the Internet function or



                                           5
playing sweepstakes computer games. If the customer chose the games, the time
playing them did not reduce the Internet time available. Both options were touch-
screen operated and did not require a keyboard or mouse.
       In playing the sweepstakes computer games, I Zone customers used their
sweepstakes points in selected increments (simulating bets) on games with names
such as Buck Lucky, Tropical Treasures, or Baby Bucks. According to the I Zone
sweepstakes rules, each increment level available for play ―represents a separate
sweepstakes.‖ Gambling-themed games resembling slot machines were
prominently displayed on the I Zone terminals. According to a detective
investigating the business, ―[i]t appeared the subjects were playing casino-style
slot machine games on the computers. . . . The audible sounds were that of casino-
style slot machines.‖ The detective noted that on one occasion, no one was on the
Internet, but instead ―all the people using the computer terminals were playing the
sweepstakes games.‖ Participants in the sweepstakes had a chance to win cash
prizes ranging from small amounts to a top prize of $3,000.
       In contending the sweepstakes games were not slot machines, Stidman
presented evidence and argument regarding how they functioned. His position
was that the computer sweepstakes games were merely an entertaining way for
customers to reveal a sweepstakes result. A customer could also reveal a
sweepstakes result by other means, such as by using a special function on the
computer terminal or by asking an I Zone employee at the register to print out a
result on paper. As Stidman described it, ―[e]ach time a customer reveals the
results of a sweepstakes entry, [regardless of the means used], the next available
sweepstakes entry in the ‗stack‘ is revealed,‖ in sequence, from a prearranged
stack of entries. The ―next available sweepstakes entry‖ contains a predetermined
result that would be the same regardless of which method was used to reveal it.
Thus, when the customer engaged the sweepstakes computer games, the outcome

                                         6
was determined by the particular sweepstakes entry that was being revealed at that
time, not by the workings of the game itself. That is, the game simply revealed the
predetermined result of the next sequential sweepstakes entry.
       Stidman provided further documentary evidence of how I Zone‘s software
system conducted the sweepstakes. This evidence indicated there were three
distinct servers: (1) the ―Management Terminal,‖ (2) the ―Point of Sale
Terminal,‖ and (3) the ―Internet Terminal.‖ As Stidman‘s counsel summarized in
the trial court, ―It is at the Management Terminal where all sweepstakes entries are
produced and arranged. Each batch of sweepstakes entries has a finite number of
entries and a finite number of winners and losers. Once a batch of sweepstakes
entries is produced at the Management Terminal, it is ‗stacked‘ . . . and then
transferred to the Point of Sale Terminal in exactly the same order as when it left
the Management Terminal. Each time a customer reveals the results of a
sweepstakes entry, either at the Internet Terminal or at the Point of Sale, the next
available sweepstakes entry in the ‗stack‘ is revealed. In other words, the Internet
Terminal simply acts as a reader and displays the results of the next sequential
sweepstakes entry in the stack as it was originally arranged and transferred from
the Management Terminal — it is never the object of play. In fact, exactly the
same results [are displayed] for a specified sweepstakes entry whether the
customer chooses to have the results displayed in paper format at the Point of Sale
Terminal or in electronic format at an Internet Terminal.‖ Stidman‘s evidence
indicated that neither the Point of Sale Terminal nor the Internet Terminal had a
random number generator and could not be ―the object of play,‖ since those
servers could not influence or alter the result of a particular sweepstakes entry, but
merely displayed that result.




                                          7
       C. Fun Zone Internet Café; Happy Land
       Defendant Kamal Kenny Nasser owned stores called the Fun Zone Internet
Café, and defendant Ghassan Elmalih owned a store called Happy Land. The
stores sold, among other things, Tel-Connect and Inter-Connect prepaid telephone
cards. Defendants Nasser and Elmalih promoted the sale of telephone cards at
their stores by offering sweepstakes to their customers. Phone-Sweeps, LLC
(Phone-Sweeps), a company based near Toronto, Canada, furnished the Tel-
Connect and Inter-Connect telephone cards. Phone-Sweeps also provided the
computer software system that operated defendants‘ sweepstakes programs,
including the computer sweepstakes games.
       When customers purchased telephone cards or more time on their existing
cards, they received 100 sweepstakes points for each dollar spent on prepaid
telephone time. Thus, a customer purchasing $20 in telephone time would receive
2,000 sweepstakes points with the purchase. Noncustomers could receive
sweepstakes points; that is, no purchase was necessary to enter. Persons over the
age of 18 who entered defendants‘ stores could receive 100 free sweepstakes
entries or points for that day. Additionally, free points could be received by
mailing in a request form.
       Customers could use their points by playing sweepstakes computer games
on the terminals provided on the premises. Time spent on the terminals playing
the computer sweepstakes games did not reduce the customers‘ available
telephone time. Initially, customers gained access to the computer sweepstakes
games by swiping their telephone card into an electronic card reader at the
computer terminal. More recently, customers manually entered the account
number shown on the back of the telephone card at the terminal keyboard.
       Once the computer sweepstakes games were displayed, the customer was
presented with a number of slot machine-style games activated by a touch screen.


                                         8
The customers selected, based on available increments (such as 25, 50, or 100),
how many points to use at one time. The customer either lost the points played, or
was awarded additional points (called ―winning points‖), which the system tracked
and displayed on the screen. If the customer finished with a positive number of
winning points, the points were redeemable at one dollar per 100 points at the
register. For example, 2,400 winning points would result in a cash prize of $24.
According to an odds table, within each pool of entries there were entry results
that ranged from $0.01 to $4,200 (based on redeemable points won). Customers
not wishing to play the sweepstakes games could ask the cashier to do a ―Quick
Redeem‖ at the register to reveal an immediate result.
       The system used to operate the sweepstakes program and computer
sweepstakes games was an integrated system that formed a network of computers
and servers. The main Phone-Sweeps server was located in Canada and was
electronically connected to the servers in Nasser‘s and Elmalih‘s places of
business. The server used in each place of business was, in turn, electronically
connected to each of the numerous computer terminals that the customers used at
that place of business to play the computer sweepstakes games.
       Each sweepstakes consisted of a finite pool or batch of entries. Depending
on the size of the retail store, the number of entries in a sweepstakes pool could be
as high as 65 million. The Phone-Sweeps main server in Canada created the
pools. The main server randomized the entries in each pool, put them into a set
sequential order, and then delivered the pool in that sequential order to the ―Point
of Sale‖ computer (or server) in the stores. Neither Nasser nor Elmalih, nor their
customers could change the sequence or contents (i.e., results) of the entries. The
main server in Canada could detect when the pool in any particular store was
nearing the end, and then it created a new pool, in the same manner, and delivered
it to the Point of Sale computer (or server).

                                          9
       Customers playing the computer sweepstakes games simply received and
obtained the results of the next available entry or entries, in sequence. Thus, the
outcomes were predetermined by sequential entries, not by how the customers
played the games. Customers could not impact the result that was determined by
the next available entry. Additionally, neither the sweepstakes servers (i.e., the
Point of Sale computers) nor the terminals where the computer sweepstakes games
were played contained a random number generator or any other way to randomize
or alter the sequence of the entry results.
       There was evidence that over a one-year period, customers actually used 31
to 32 percent of the total telephone time that Phone-Sweeps sold through its
licensees.

       D. Procedural Background
       In May and June 2012, the Kern County District Attorney‘s Office filed on
behalf of the People separate civil actions against each of the five defendants. The
complaints alleged that the defendants had violated antigambling provisions of the
Penal Code in operating their respective businesses and sought injunctive and
other relief under Business and Professions Code section 17200. The pleadings
cited provisions relating to unlawful lotteries (§ 319) and unlawful slot machines
or gambling devices (§§ 330a, 330b, 330.1). The superior court held evidentiary
hearings on the People‘s motions for preliminary injunctions. It granted
preliminary injunctions prohibiting each defendant, pending further order of the
court, ―from operating any business that includes any type of ‗sweepstakes,‘ ‗slot
machines,‘ or ‗lottery‘ feature.‖ It entered formal written orders granting the
preliminary injunctions against Grewal, Stidman, and Walker on August 1, 2012,
and against Nasser and Elmalih on November 26, 2012.




                                          10
       Each defendant appealed separately from the preliminary injunction. The
Court of Appeal consolidated the appeals of Grewal, Stidman, and Walker, and,
separately, the appeals of Nasser and Elmalih. In two separate opinions, the Court
of Appeal affirmed the trial court orders. In each matter, it found the sweepstakes
operations were illegal slot machines under section 330b. We granted each of the
defendants‘ petitions for review. After the briefing was complete, we consolidated
the two appeals for purposes of oral argument and opinion.
                                  II. DISCUSSION
       The sweepstakes operations at issue here were similar to each other,
although they varied in some respects. In each instance, the business sold a
product (either Internet time or telephone cards) and, along with the product,
provided the opportunity to play sweepstakes games, with the possibility of
winning substantial cash prizes. Customers could also receive a limited number of
free sweepstakes entries per day or could receive more by mailing in a request
form. The customer had the option of either obtaining an instant sweepstakes
result or playing games at a computer terminal to reveal the result. To begin
playing the sweepstakes games, the customer would swipe a magnetic card or
enter a number at a computer terminal. Those choosing to play the games had a
choice of games resembling slot machines or casino-style games. The
sweepstakes operation was an integrated whole, with an outside company
supplying the software to operate the game. The outside company‘s software,
which was connected to the computer terminals at the business, predetermined the
result of each game. Neither employees at the business nor the customers
themselves had any control over the outcome. The games themselves merely
revealed the predetermined result; they had no influence on that result.
       The district attorney alleged that each of the sweepstakes operations
violated several antigambling provisions, including three that concern slot

                                         11
machines. (§§ 330a, 330b, 330.1.) The definitions of slot machines in these
provisions are similar but not identical. (Hotel Employees & Restaurant
Employees Internat. Union v. Davis. (1999) 21 Cal.4th 585, 593-594; People ex
rel. Lockyer v. Pacific Gaming Technologies (2000) 82 Cal.App.4th 699, 703,
fn. 6 (Pacific Gaming Technologies).) The Court of Appeal focused on section
330b, finding it ―[a]rguably the broadest of the three.‖ It found that the operations
at issue here were illegal slot machines under that section. Defendants challenge
that finding in this court. Accordingly, the only provision before us on review is
section 330b, and we will also focus on that section.
       Section 330b, subdivision (a), makes it unlawful to possess ―any slot
machine or device, as defined in this section.‖2 Subdivision (d) of that section
provides the definition: ―For purposes of this section, ‗slot machine or device‘
means a machine, apparatus, or device that is adapted, or may readily be
converted, for use in a way that, as a result of the insertion of any piece of money
or coin or other object, or by any other means, the machine or device is caused to
operate or may be operated, and by reason of any element of hazard or chance or


2       In its entirety, section 330b, subdivision (a), provides: ―It is unlawful for
any person to manufacture, repair, own, store, possess, sell, rent, lease, let on
shares, lend or give away, transport, or expose for sale or lease, or to offer to
repair, sell, rent, lease, let on shares, lend or give away, or permit the operation,
placement, maintenance, or keeping of, in any place, room, space, or building
owned, leased, or occupied, managed, or controlled by that person, any slot
machine or device, as defined in this section.
        ―It is unlawful for any person to make or to permit the making of an
agreement with another person regarding any slot machine or device, by which the
user of the slot machine or device, as a result of the element of hazard or chance or
other unpredictable outcome, may become entitled to receive money, credit,
allowance, or other thing of value or additional chance or right to use the slot
machine or device, or to receive any check, slug, token, or memorandum entitling
the holder to receive money, credit, allowance, or other thing of value.‖



                                         12
of other outcome of operation unpredictable to him or her, the user may receive or
become entitled to receive any piece of money, credit, allowance, or thing of
value, or additional chance or right to use the slot machine or device, or any check,
slug, token, or memorandum, whether of value or otherwise, which may be
exchanged for any money, credit, allowance, or thing of value, or which may be
given in trade, irrespective of whether it may, apart from any element of hazard or
chance or unpredictable outcome of operation, also sell, deliver, or present some
merchandise, indication of weight, entertainment, or other thing of value.‖
(§ 330b, subd. (d).)
       We must decide whether the defendants‘ sweepstakes operations come
within this definition. We are not the first court to grapple with this definition in
recent years. Numerous courts have found devices similar to the ones here to be
slot machines under this definition.
       As the Court of Appeal summarized in Grewal below: ―California courts
have found section 330b to prohibit a variety of devices where prizes may be won
based on chance. In People ex rel. Lockyer v. Pacific Gaming Technologies,
supra, 82 Cal.App.4th 699, a vending machine that dispensed telephone cards for
$1 included a ‗sweepstakes‘ feature with audio-visual displays resembling a slot
machine. When customers purchased a phone card for $1, they were given a
chance to win a cash prize of up to $100. A ‗preset computer program‘
determined the results. (Id. at pp. 701-702.) The Court of Appeal held the
vending machine was a prohibited slot machine under the plain language of
section 330b, because ‗[b]y the insertion of money and purely by chance (without
any skill whatsoever), the user may receive or become entitled to receive money.‘
(Pacific Gaming Technologies, at p. 703.) Similarly, in Trinkle v. Stroh [(1997)]
60 Cal.App.4th 771, a jukebox that dispensed four songs for $1 was found to be a
prohibited slot machine or device under section 330b because the operators also

                                          13
received a chance to win a cash jackpot. (Id. at pp. 779-781; see Score Family
Fun Center, Inc. v. County of San Diego (1990) 225 Cal.App.3d 1217, 1221-1223
[holding that an arcade video game that simulated card games violated § 330b
because operators could, as a matter of chance, win free games or extended
play].)‖
       A recent federal case applying California law to an Internet sweepstakes
game provides another example. (Lucky Bob’s Internet Café , LLC v. California
Department of Justice (S.D. Cal., May 1, 2013, No. 11-CV-148 BEN (JMA)) 2013
U.S. Dist. LEXIS 62470, 2013 WL 1849270 (Lucky Bob’s).)) Lucky Bob‘s facts
were similar to those of this case in many respects.
       As the Lucky Bob’s court described it, ―Customers were given 100 entries
to the Sweepstakes for every $1 of purchased internet time. [Citation.] In
addition, each customer was entitled to 100 free entries for every 24-hour period.
[Citation.] Customers were also able to mail a request for $1 worth of
sweepstakes entries to World Touch Gaming, but this option was never used.
[Citation.] [¶] Purchased internet time was loaded onto a player card, which the
customer swiped into an electronic card reader located at an assigned computer
terminal. [Citation.] The user would then select a method for revealing his
winnings from the monitor located at the terminal. First, a customer could
immediately reveal whether he won a prize. [Citation.] Second, a customer could
play one of the seventeen casino-style games, then reveal whether he had won a
prize at the end of the game. [Citation.] Many of these casino-style games are
commonly associated with slot machines. [Citation.] [¶] Plaintiffs‘ equipment
operated a sweepstakes gaming system that was manufactured and licensed by
World Touch Gaming, Inc. [Citation.] The World Touch Gaming system
predetermined prize outcomes based upon chance as set forth in predefined odds
tables for the gaming system, prior to when customers revealed their game entries

                                         14
on player terminals. [Citation.] Based upon the odds tables, a game‘s overall
financial outcome would be set at the time the pool of outcomes was generated.
[Citation.] The system would then sequentially assign entries to patrons from the
pool. [Citation.] Playing the casino-type games could not change the game
entries‘ prize values.‖ (Lucky Bob’s, supra, 2013 U.S. Dist. LEXIS 62470 at pp.
*2-*3, 2013 WL 1849270, at p. *1.)
       The cash prizes in Lucky Bob’s ranged from 10 cents to $3,000. The
players did not use most of the Internet time they purchased. ―At Lucky Bob‘s, a
total of $1,225,055 was spent for 204,176 hours of internet time and 97.375% of
the total purchased internet time was unused.‖ (Lucky Bob’s, supra, 2013 U.S.
Dist. LEXIS 62470 at p. *3, 2013 WL 1849270, at p. *2.)
       Relying heavily on Pacific Gaming Technologies, supra, 82 Cal.App.4th
699, the Lucky Bob’s court found the device at issue to be an illegal slot machine
under section 330b. (Lucky Bob’s, supra, 2013 U.S. Dist. LEXIS 62470 at pp. *6-
*10, 2013 WL 1849270, at pp. *2-*4.)
       In finding the devices at issue here to be slot machines, the Court of Appeal
relied primarily on section 330b, subdivision (d)‘s plain language. Doing so was
appropriate, because the language the Legislature chooses best indicates its intent.
(People v. Cook (2015) 60 Cal.4th 922, 935.) We agree with the Court of
Appeal‘s application of the statutory language to the facts.
       As the Court of Appeal discussed in the Grewal opinion, ―The first element
specified in the statute is that ‗as a result of the insertion of any piece of money or
coin or other object, or by any other means, the machine or device is caused to
operate or may be operated . . . .‘ (§ 330b, subd. (d), italics added.) Defendants
argue that this element is lacking because no coin or similar object was inserted
into a slot by customers at the computer terminal to cause the sweepstakes
computer games to operate. We reject that argument. Here, the insertion of a PIN

                                          15
[or, in Nasser, an account number] or the swiping of a magnetic card at the
computer terminal in order to activate or access the sweepstakes games and
thereby use points received upon paying money at the register (ostensibly to
purchase a product) plainly came within the broad scope of the statute. The statute
expressly includes the catchall phrase ‗by any other means.‘ (§ 300b, subd. (d),
italics added.) Even though a coin, money or object (e.g., a token) was not
inserted into a slot, the games were commenced by other means analogous thereto
which effectively accomplished the same result and, therefore, this element is
satisfied.
       ―The second element of a ‗slot machine or device‘ articulated in section
330b is that ‗by reason of any element of hazard or chance or of other outcome of
operation unpredictable by him or her, the user may receive or become entitled to
receive any . . . money . . . or thing of value . . . .‘ (§ 330b, subd. (d), italics
added.) This language describes the so-called chance element — that is, the
requirement that any potential to win a prize must be based on hazard, chance or
other outcome of operation unpredictable to the user of the machine or device.
       ―Here, it is clear that defendants‘ customers may become entitled to win
prizes under the software systems implementing defendants‘ computer
sweepstakes games based on ‗hazard or chance or of other outcome of operation
unpredictable‘ to the user. (§ 330b, subd. (d).) That is, we agree with the People
that the chance element is satisfied. Under California gambling law, ‗ ―[c]hance‖ ‘
means that ‗winning and losing depend on luck and fortune rather than, or at least
more than, judgment and skill.‘ (Hotel Employees & Restaurant Employees
Internat. Union v. Davis, supra, 21 Cal.4th at p. 592.) Since customers playing
defendants‘ computer sweepstakes games can exert no influence over the outcome
of their sweepstakes entries by means of skill, judgment or how well they play the



                                            16
game, it follows that we are dealing with systems that are based on chance or
luck.‖ (Fn. omitted.)
       In arguing their devices are not slot machines, defendants rely primarily on
Trinkle v. California State Lottery (2003) 105 Cal.App.4th 1401 (State Lottery).
That case involved a claim that the California State Lottery‘s ―use of electronic
vending machines to dispense SCRATCHERS lottery tickets is an illegal use of
slot machines.‖ (Id. at p. 1403.) The game of Scratchers is a lottery that the
California State Lottery is specifically permitted to operate. (See Western Telcon,
Inc. v. California State Lottery (1996) 13 Cal.4th 475, 481-482, 495.) The
California State Lottery sells the Scratchers lottery tickets in stores, sometimes
using vending machines to do so. (State Lottery, at pp. 1403-1405.)
       The Court of Appeal in State Lottery, supra, 105 Cal.App.4th 1401,
reached what the Court of Appeal in Grewal aptly described as the ―unsurprising
conclusion that a vending machine that simply dispenses California State Lottery
tickets in the sequential order that they were loaded into the machine is not an
unlawful slot machine.‖ That conclusion was undoubtedly correct. The tickets
themselves were part of a lottery, itself a game of chance. But the California State
Lottery is permitted to operate the lottery. Selling the tickets in vending machines,
rather than from a sales clerk behind a counter, did not make the process an
additional game of chance.
       The Legislature has specifically authorized the California State Lottery to
dispense lottery tickets in vending machines. (Gov. Code, § 8880.335.) That
section, however, authorizes using vending machines only if ―neither the operation
or functioning of the ticket dispenser nor the operation or functioning of any
component, subcomponent, part, chip, or program of the ticket dispenser, or of any
device in direct or indirect communication with the ticket dispenser, may affect
the probability that a ticket that is dispensed will have a prize value other than a

                                          17
null prize value.‖ (Id., subd. (b), italics added.) In other words, the Legislature
authorized lottery ticket vending machines, but not machines integrated into a
system that, taken as a whole, operates to determine winners and losers.
Defendants here are doing something beyond what the California State Lottery is
permitted.
       Thus, State Lottery, supra, 105 Cal.App.4th 1401, is distinguishable from
this case. Defendants, however, latch onto certain language in State Lottery that,
they argue, makes their devices lawful. The State Lottery court described one of
the statutory elements as being that ―the operation of the machine is unpredictable
and governed by chance . . . .‖ (State Lottery, at p. 1410, italics added.) It is
unclear how significant the point is to this case, but as the Court of Appeal in
Grewal noted, ―section 330b, subdivision (d), refers to chance ‗or‘ unpredictable
outcome.‖ ―[U]se of the word ‗or‘ in a statute indicates an intention to use it
disjunctively so as to designate alternative or separate categories.‖ (White v.
County of Sacramento (1982) 31 Cal.3d 676, 680.)
       More significantly, State Lottery has language indicating that, for a device
to be a slot machine, the machine the customers operate must itself generate the
element of chance at the time of operation, somewhat like the spinning wheels of
the original mechanical slot machines. (State Lottery, supra, 105 Cal.App.4th at
pp. 1411-1412.) Defendants argue that their devices are not slot machines because
the machines the customers operate to obtain the result do not themselves generate
the element of chance at the time of operation. The element of chance has already
been generated, and customers playing the games merely receive the next result in
a previously arranged, sequential order.
       The Court of Appeal in Grewal disagreed with the suggestion (unnecessary
to State Lottery‘s holding) that the computer terminal which customers use to play
the sweepstakes games must itself generate the chance or unpredictable outcome

                                           18
at the time the customer plays the game. ―Section 330b only requires that prizes
may be won ‗by reason of any element of hazard or chance or of other outcome of
operation unpredictable by him or her . . . .‘ (§ 330b, subd. (d).) Under this broad
wording, if the entries are arranged in a particular order beforehand, rather than
rearranged each time the game is played, it will still suffice. Either way, the next
sequential entry/result that is dealt out by the software system will be, from the
perspective of the player, by ‗chance or of other outcome of operation
unpredictable by him or her . . . .‘ (Ibid.) [¶] . . . The mere fact that winnings
are based on a predetermined sequence of results programmed into the software
system, rather than on a randomly spinning wheel (or the like), does not change
the nature and character of devices herein, which as integrated systems function as
slot machines.‖ (Fns. omitted.)
       The Court of Appeal ―treat[ed] each defendant‘s complex of networked
terminals, software gaming programs and computer servers as a single, integrated
system. Under section 330b, subdivision (d), an unlawful ‗ ―slot machine or
device‖ ‘ is not limited to an isolated or stand-alone piece of physical hardware,
but broadly includes ‗a machine, apparatus, or device that is adapted‘ for use as a
slot machine or device. (Italics added.) As defined in dictionaries, the ordinary
meaning for the term ‗apparatus‘ includes ‗a group or combination of instruments,
machinery, tools, or materials having a particular function‘ (Random House
Webster‘s College Dict. (1992) p. 66), as well as ‗[t]he totality of means by which
a designated function is performed or a specific task executed‘ (Webster‘s II New
College Dict. (2005 (3d ed.) p. 54). Here, each defendant‘s system of gaming
software, servers and computer terminals plainly operated together as a single
apparatus. (§ 330b, subd. (d).) While it is true that the end terminals or computer
monitors used by patrons — if considered in isolation — may not intrinsically or
standing alone contain all the elements of a slot machine, in each case they are part

                                         19
of an integrated system or apparatus wherein the various parts or components
work together so as to operate in a manner that does constitute an unlawful slot
machine or device.‖ 3
       We agree. Indeed, a contrary view would mean that, again to quote the
Court of Appeal, ―even a casino-style slot machine would be legal as long as it
was operated by a computer system that had previously arranged the sequence of
entry results in a fixed order. Such a computer system might conceivably
frontload hundreds of millions of discrete entry results into a predetermined
sequence. A customer using that device would be surprised to learn that merely
because there is a preset sequence, he is not playing a game of chance.‖ The
Legislature cannot have intended and, more importantly, section 330b‘s language
does not permit, the conclusion that a business in California may lawfully operate
traditional Las Vegas-style slot machines — with spinning wheels and everything
else one associates with slot machines — merely by inserting into them software
created elsewhere that presets the results. As the Court of Appeal aptly
analogized, ―whether a deck of cards was shuffled the day before, or at the
moment the player sits down at the table and places a bet, it is still a matter of
chance whether the ace of spades is the next card dealt.‖
       From all this, and as applicable here, we think the core elements of section
330b, subdivision (d), can be distilled as follows: A device that (1) rewards
purchasers of usable products, including but not limited to, telephone and Internet
time, with sweepstakes points, and (2) allows those purchasers to redeem their

3      We note that under some circumstances slot machines may be seized and
ultimately disposed of. (§ 330.3.) Section 330.3 does not cross-reference section
330b, subdivision (d)‘s definition of a slot machine. We express no opinion on the
separate question of to what extent the integrated components of a slot machine
under section 330b may be subject to seizure under section 330.3.



                                          20
sweepstakes points by playing games that award cash or other prizes of value, is a
slot machine, where that device, (3) standing alone or used in conjunction with
other electronic or mechanical components, (4) when operated by insertion of a
PIN, account number, or magnetic card, or by any other means, (5) awards cash or
other prizes of value to users, or entitles those users to such cash or other prizes of
value, and (6) does so by arranging or prearranging winning sweepstakes entries in
a manner that is unpredictable to the user.
       Pacific Gaming Technologies, supra, 82 Cal.App.4th 699, supports this
conclusion. As the Court of Appeal in Grewal explained, in Pacific Gaming
Technologies, ― ‗[a] preset computer program determine[d] the results of the
sweepstakes.‘ (Id. at p. 702.) The machine or device in that case (a ‗VendaTel‘
that distributed a telephone card to each customer while entering them in a chance
to win a prize) had a ‗ ―10 percent payout structure‖ ‘ where it would ‗pay[] out
$500 in prizes for every $5,000 paid into the machine‘ with ‗ ―predetermined
winners‖ spread out over a period of time.‘ (Id. at p. 702, fn. 4.) Under those
facts, the Court of Appeal held that the users of the device became entitled to
receive cash prizes ‗purely by chance (without any skill whatsoever).‘ (Id. at p.
703, italics added.) The same is true here. Even if the sequence of entries has
been electronically frontloaded into defendants‘ integrated system, patrons win
cash prizes based upon ‗hazard or chance or of other outcome of operation
unpredictable by [the patron]‘ in violation of section 330b, subdivision (d).‖ The
court in Lucky Bob’s, supra, 2013 U.S. Dist. LEXIS 62470, 2013 WL 1849270,
reached a similar conclusion.
       Defendants argue that the devices are not slot machines because the
element of consideration is lacking. Again, we agree with the Court of Appeal‘s
response to this argument. ―We find the argument unpersuasive. Unlike section
319 (regarding lotteries), section 330b does not directly specify that consideration

                                          21
is an element. Therefore, it would seem that as long as the express statutory
elements of section 330b are satisfied, no separate showing of consideration is
needed. In other words, to the extent that consideration is a factor under section
330b, it is simply subsumed by the existing statutory elements. Since those
elements were shown here, nothing more was required. (Trinkle v. Stroh, supra,
60 Cal.App.4th at pp. 780-781.) Other cases have essentially followed this
approach by concluding that even if consideration is necessary in slot machine
cases, its existence will be found where a connection exists between purchasing a
product from a vending machine or device and being given chances to win a prize.
(Id. at pp. 781-782; People ex rel. Lockyer v. Pacific Gaming Technologies, supra,
82 Cal.App.4th at pp. 705-706.) ‗ ―Once the element[s] of chance [and prize]‖ ‘
are added to a vending machine or device, it is reasonable to assume that ‗ ―people
are no longer paying just for the product regardless of the value given that product
by the vender.‖ ‘ (Trinkle v. Stroh, supra, at p. 782; accord, People ex rel.
Lockyer v. Pacific Gaming Technologies, supra, at pp. 704-707.) That is the case
here as well, since points are given to play the computer sweepstakes games on
defendants‘ terminals based on dollars spent in purchasing products — that is, the
elements of chance and prize are added to the purchase.‖
       ―[T]his construction reflects the Legislature‘s recognition ‗that once the
elements of chance and prize are added to a vending machine, the consideration
paid from the player-purchaser‘s perspective is no longer solely for the product.‘
[¶] . . . An otherwise illegal machine does not become legal merely because it
plays music, gives a person‘s weight, vends food, etc.‖ (Trinkle v. Stroh, supra,
60 Cal.App.4th at p. 782 [quoting the trial court in that case].)
       Defendants Nasser and Elmalih argue the systems do not operate by hazard
or chance or some other unpredictable operation because users have the option of
obtaining an immediate result without playing any of the computer games. This

                                          22
circumstance does not negate the elements that make the computer games illegal
slot machines. The fact that users need not swipe a card or enter a number into the
computer terminal and then play a casino-style game in order to obtain a result,
does not make the system any less of a slot machine when they do swipe the card
or enter the number and do play the casino-style game. When the user, by some
means (here swiping a card or entering a number), causes the machine to operate,
and then plays a game to learn the outcome, which is governed by chance, the user
is playing a slot machine.
       Two additional circumstances in this case tend to confirm that defendants
were actually conducting gambling enterprises of the type section 330b is intended
to control. First, although a device need not generate a random outcome at the
time of play, we think it significant that these systems are specifically designed to
cultivate the impression that the user may receive a reward ―by reason of any
element of hazard or chance or of other outcome of operation unpredictable by
him or her.‖ (§ 330b, subd. (d).) In contrast, a lottery ticket vending machine is
transparent insofar as the design itself conveys to the customer that the dispenser
has nothing to do with the chance element. A customer can watch the next ticket
fall from its holder, a straightforward proposition imbued with no particular
suspense; the appearance of chance comes into play only once the lottery ticket is
in hand. This distinction would seem to track the central policy rationale for
categorizing defendants‘ systems as slot machines. They are attempts to recreate
the sensation of playing with a device that itself generates the chance element.
       Second, it is clear defendants‘ customers were not merely buying the
product that made them eligible to play the sweepstakes games — Internet or
telephone time — but also, and perhaps primarily, the sweepstakes games. In
Lucky Bob’s, the record showed that most of the Internet time ostensibly sold was
never used. (Lucky Bob’s, supra, 2013 U.S. Dist. LEXIS 62470 at p. *3, 2013 WL

                                         23
1849270, at p. *2.) The record here is not as clear, but at least sometimes,
customers who ostensibly bought Internet time seemed to spend more time playing
the games than using the Internet. The evidence shows that customers who
ostensibly bought telephone cards never used some two-thirds of the purchased
telephone time. It is true, as defendants argue, that the businesses offered a
limited number of sweepstakes entries for no charge. But the customers were
nonetheless clearly paying, at least in part, and, it appears, in large part, for the
opportunity to play the casino-style sweepstakes games and win cash prizes. Or,
as the People put it, defendants‘ ―sweepstakes are actual games of chance played
for money by patrons to win cash prizes.‖
       Defendants make various other arguments against finding the devices to be
slot machines. They argue the Court of Appeal violated principles of stare decisis
in not following State Lottery, supra, 105 Cal.App.4th 1401. But nothing about
stare decisis prevents courts from fairly distinguishing cases. State Lottery is
entirely distinguishable. Indeed, the various cases finding similar devices to be
slot machines, which we are following, are closer on point.
       Defendants claim they had insufficient notice that their devices would be
deemed slot machines. They argue the so-called rule of lenity, ―whereby courts
must resolve doubts as to the meaning of a statute in a criminal defendant‘s favor‖
(People v. Avery (2002) 27 Cal.4th 49, 57), mandates a finding that the devices are
legal. The rule of lenity exists to ensure that people have adequate notice of the
law‘s requirements. But the rule applies only when two reasonable interpretations
of a penal statute stand in relative equipoise. ―[A]lthough true ambiguities are
resolved in a defendant‘s favor, an appellate court should not strain to interpret a
penal statute in defendant‘s favor if it can fairly discern a contrary legislative
intent.‖ (Id. at p. 58.) Here, there is no relative equipoise. We can fairly discern



                                           24
the Legislature‘s intent. The devices at issue clearly come within section 330b,
subdivision (d)‘s definition of a slot machine.
       Defendants also argue that any ruling that their devices are slot machines
would be ― ‗an unforeseeable judicial enlargement of‘ ‖ a criminal statute that may
only be applied prospectively. (People v. Whitmer (2014) 59 Cal.4th 733, 742.)
But all that we are reviewing at this time is the trial court‘s issuance of the
preliminary injunctions. An injunction operates in the future; it ―is aimed at
preventing future conduct — conduct after the issuance of the injunction.‖ (Cal-
Dak Co. v. Sav-On Drugs, Inc. (1953) 40 Cal.2d 492, 496.) We express no view
on what other remedy, if any, might be appropriate in this case.
       Defendants also argue that the Legislature‘s inaction signals its approval of
State Lottery, supra, 105 Cal.App.4th 1401. They note that the Legislature has
amended section 330b multiple times since that decision but has not overruled it.
―In some circumstances, legislative inaction might indicate legislative approval of
a judicial decision.‖ (People v. Whitmer, supra, 59 Cal.4th at p. 741.) It is unclear
how this concept would apply here because the Legislature has overruled neither
State Lottery, which is distinguishable, nor any of the cases finding devices similar
to the ones here to be illegal slot machines. For purposes of discussion, we may
assume that the Legislature‘s failure to overrule State Lottery might indicate its
approval of that case‘s holding. But that holding was that the California State
Lottery may sell lottery tickets in vending machines. The Legislature‘s inaction
does not signal approval of all of the analysis leading to that holding, and certainly
not approval of defendants‘ view of how that analysis applies to this case.
       Defendants assert that the devices here have features in common with
sweepstakes operated by national companies like Coca-Cola and McDonalds, and
that a holding that the devices here are illegal slot machines would mean those and
similar sweepstakes are also illegal slot machines. How similar the devices here

                                          25
are to other sweepstakes, and whether other sweepstakes would meet all of the
elements set forth in section 330b, subdivision (d), is beyond the scope of this
case. Such questions would have to be decided in a case in which someone claims
some other sweepstakes system is an illegal slot machine. Like a New Mexico
court confronted with a similar argument, ―we will not substitute our sufficiency
of the evidence analysis with an evaluation of the numerous other sweepstakes-
type promotions conducted in New Mexico [or California] by other national
companies who are not defendants in this proceeding.‖ (State v. Vento (N.M.App.
2102) 286 P.3d 627, 634.)
       The parties also note that, during the pendency of this case, the Legislature
amended Business and Professions Code section 17539.1 in a way that appears to
prohibit sweepstakes games like those of this case. (Stats. 2014, ch. 592, § 1,
chaptering Assem. Bill No. 1439 (2013-2104 Reg. Sess.).)4 The meaning and
application of this amendment is beyond the scope of this opinion. But its
existence does not make this matter moot; we are deciding whether the trial court


4      As amended, Business and Professions Code section 17539.1, subd. (a)(12),
prohibits: ―Using or offering for use any method intended to be used by a person
interacting with an electronic video monitor to simulate gambling or play
gambling-themed games in a business establishment that (A) directly or indirectly
implements the predetermination of sweepstakes cash, cash-equivalent prizes, or
other prizes of value, or (B) otherwise connects a sweepstakes player or
participant with sweepstakes cash, cash-equivalent prizes, or other prizes of value.
For the purposes of this paragraph, ‗business establishment‘ means a business that
has any financial interest in the conduct of the sweepstakes or the sale of the
products or services being promoted by the sweepstakes at its physical location.
This paragraph does not make unlawful game promotions or sweepstakes
conducted by for-profit commercial entities on a limited and occasional basis as an
advertising and marketing tool that are incidental to substantial bona fide sales of
consumer products or services and that are not intended to provide a vehicle for
the establishment of places of ongoing gambling or gaming.‖



                                         26
properly issued a preliminary injunction after finding the devices to be illegal slot
machines under section 330b.
       Defendants contend, however, that the recent legislation supports the
argument that their devices are not unlawful slot machines under section 330b.
They cite committee reports expressing the belief that currently the devices might
not be prohibited. For example, one report states, ―As long as there is a legitimate
free method of entry into the sweepstakes or promotion, the consideration element
is absent, and the ‗sweepstakes‘ is not an illegal lottery. According to the Senate
Governmental Organization Committee, it appears that most Internet cafés are not
operating illegal lotteries under California law.‖ (Sen. Rules Com., Off. of Sen.
Floor Analyses, 3d reading analysis of Assem. Bill No. 1439 (2013-2014 Reg.
Sess.) as amended Aug. 21, 2014, p. 3.)
       Aside from the fact that this and similar committee reports refer to illegal
lotteries and not illegal slot machines, at most they indicate a belief that devices
like those of this case might not currently be prohibited, and they suggest the
Legislature amended Business and Professions Code section 17539.1 to ensure
that at least they would be unlawful in the future. The reports do not, and cannot,
restrict our interpretation of section 330b. The judicial, not legislative, branch
interprets statutes, and a legislative belief regarding the meaning of earlier
legislation has little weight. (People v. Cruz (1996) 13 Cal.4th 764, 780-781.)
Nothing in the Legislature‘s recent action prevents us from applying section
330b‘s plain language.




                                          27
                             III. CONCLUSION
     We affirm the judgments of the Court of Appeal.

                                                   CHIN, J.
WE CONCUR:

CANTIL-SAKAUYE, C. J.
WERDEGAR, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.




                                     28
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion People v. Grewal and People v. Nasser
__________________________________________________________________________________

Unpublished Opinion NP opn. filed 3/10/14 – 6th Dist. (Nasser)
Original Appeal
Original Proceeding
Review Granted XXX 224 Cal.App.4th 527 (Grewal)
Rehearing Granted
__________________________________________________________________________________

Opinion No. S217896 & S217979
Date Filed: June 25, 2015
__________________________________________________________________________________

Court: Superior
County: Kern
Judge: William D. Palmer
__________________________________________________________________________________

Counsel:

Weston, Garrou & Mooney, John H. Weston, G. Randall Garrou and Jerome H. Mooney for Defendants
and Appellants Kimpal Grewal and Philip Ernest Walker.

William H. Slocumb, Christopher T. Reid; Hunt Jeppson & Griffin and Tory E. Griffin for Defendant and
Appellant John C. Stidman.

Steven Graff Levine; Dowling Aaron, Daniel K. Klingenberger, Lynne Thaxter Brown and Stephanie
Hamilton Borchers for Defendants and Appellants Kamal Kenny Nasser and Ghassan Elmalih.

Downey Brand, Stephen J. Meyer, Tory E. Griffin and Kelly L. Pope for Net Connection Hayward, LLC,
as Amicus Curiae on behalf of Defendants and Appellants.

Lisa S. Green, District Attorney, Gregory A. Pulskamp and John T. Mitchell, Deputy District Attorneys, for
Plaintiff and Respondent.

Kamala D. Harris, Attorney General, Sara J. Drake, Assistant Attorney General, and William L. Williams,
Jr., Deputy Attorney General, for Attorney General for the State of California as Amicus Curiae on behalf
of Plaintiff and Respondent.

Mark L. Zahner and Gary Koeppel, Deputy District Attorney, for California District Attorneys Association
as Amicus Curiae on behalf of Plaintiff and Respondent.

Mayer Brown and Donald M. Falk for Viejas Band of Kumeyaay Indians and Lytton Rancheria of
California as Amici Curiae on behalf of Plaintiff and Respondent.

Matthew J. Geyer; Bien & Summers, Elliot L. Bien and Jocelyn S. Sperling for GTech Corporation as
Amicus Curiae on behalf of Plaintiff and Respondent.

Liner, Joseph R. Taylor and Tiffany R. Caterina for California Gaming Association as Amicus Curiae on
behalf of Plaintiff and Respondent.

Reed Smith, Paul D. Fogel and Dennis Peter Maio for California State Lottery as Amicus Curiae on behalf
of Plaintiff and Respondent.


                                                    1
Counsel who argued in Supreme Court (not intended for publication with opinion):

John H. Weston
Weston, Garrou & Mooney
12121 Wilshire Boulevard, Suite 525
Los Angeles, CA 90025
(310) 442-0072

Tory E. Griffin
Hunt Jeppson & Griffin
1478 Stone Point Drive, Suite 100
Roseville, CA 95661
(916) 780-7008

Steven Graff Levine
1112 Montana Avenue, #309
Santa Monica, CA 90403
(310) 497-1974

Gregory A. Pulskamp
Deputy District Attorney
1215 Truxtun Avenue, 4th Floor
Bakersfield, CA 93301
(661) 868-1659




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