Case Title: Quick Charge Kiosk LLC v. Kaul

Citation: 

Docket Number: 2018AP000947

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2020-06-12T00:00:00Z

Document:
2020 WI 54 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2018AP947 
 
 
 
COMPLETE TITLE: 
Quick Charge Kiosk LLC and Jeremy Hahn, 
          Plaintiffs-Appellants-Petitioners, 
     v. 
Josh Kaul, in his official capacity as Attorney 
General, 
          Defendant-Respondent. 
 
 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 388 Wis. 2d 525,934 N.W.2d 18 
PDC No:2019 WI App 51 - Published 
 
 
OPINION FILED: 
June 12, 2020   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
April 27, 2020   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit    
 
COUNTY: 
Milwaukee   
 
JUDGE: 
John J. DiMotto   
 
 
 
JUSTICES: 
 
HAGEDORN, J., delivered the majority opinion for a unanimous 
Court.  
NOT PARTICIPATING: 
        
 
 
 
ATTORNEYS: 
 
 
For 
the 
plaintiffs-appellants-petitioners, 
there 
were 
briefs filed by Ohioma Emil Ovbiagele, Samantha Huddleston, and 
OVB Law & Consulting, S.C., Milwaukee. There was an oral 
argument by Ohioma Emil Ovbiagele. 
 
For the defendant-respondent, there was a brief filed by 
Colin T. Roth, assistant attorney general; with whom on the 
brief was Joshua L. Kaul, attorney general. There was an oral 
argument by Colin T. Roth. 
 
2020 WI 54 
 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2018AP947 
(L.C. No. 
2016CV6655) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Quick Charge Kiosk LLC and Jeremy Hahn, 
 
 
Plaintiffs-Appellants-Petitioners, 
 
 
v. 
 
Josh Kaul, in his official capacity as Attorney 
General, 
 
 
Defendant-Respondent. 
 
 
FILED 
 
JUN 12, 2020 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
HAGEDORN, J., delivered the majority opinion for a unanimous 
Court. 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed. 
 
¶1 
BRIAN HAGEDORN, J.   Quick Charge Kiosk LLC is the 
commercial owner of kiosks that enable customers to pay for an 
opportunity to win (or lose) money through a video game based on 
chance.  After its kiosks were deemed illegal gambling machines 
by the attorney general and law enforcement, Quick Charge and 
its owner brought this declaratory judgment action. 
¶2 
Quick Charge asserts that its kiosks are not gambling 
machines 
because 
they 
do 
not 
satisfy 
the 
consideration 
No.  2018AP947 
 
2 
 
requirement under the gambling machine definition in Wis. Stat. 
§ 945.01(3) (2017-18).1  Quick Charge points to the definition of 
consideration for lotteries under § 945.01(5) and an exception 
from that definition for "in-pack chance promotions" under Wis. 
Stat. § 100.16(2).  This same definition and exception should 
apply to gambling machines, Quick Charge contends, suggesting 
its kiosks are legally compliant in-pack chance promotions.  
Further, Quick Charge argues there is no consideration even if 
the ordinary legal definition of consideration applies because a 
free play option is available.  We disagree with these 
arguments. 
¶3 
While the lottery statute expressly excludes in-pack 
chance promotions from its definition of consideration, the 
gambling machine statute does not.  The logical implication of 
this textual distinction is that meeting the requirements of an 
in-pack chance promotion does not exempt a mechanical device 
from the consequences of being an illegal gambling machine.  
Moreover, consideration is present here because the kiosks can 
be used exactly like a standard gambling machine notwithstanding 
a free play option also being available.  That is, customers can 
pay for an opportunity to obtain something of value by chance.  
We therefore hold that Quick Charge's kiosks meet the definition 
of a gambling machine under Wis. Stat. § 945.01(3). 
 
                                                 
1 All subsequent references to the Wisconsin Statutes are to 
the 2017-18 version. 
No.  2018AP947 
 
3 
 
I.  BACKGROUND 
¶4 
Jeremy Hahn owns Quick Charge Kiosk LLC, a company 
that places what Quick Charge describes as cellphone charging 
kiosks in various convenience stores and gas stations throughout 
the state.  Resembling in Hahn's words a "penny video poker 
game," Quick Charge constructs the kiosks by modifying standard 
gambling machine equipment purchased from third parties to 
enable a cellphone charging functionality. 
¶5 
A customer who puts money into a Quick Charge kiosk 
receives two potential benefits.  First, the kiosk gives the 
customer credits to play a video game on the kiosk's screen with 
a chance to win a cash prize.  For every dollar inserted, a 
customer receives 100 credits.  Customers wager the credits 
throughout different rounds and either win or lose those credits 
based on the game's results.  These results are determined by a 
random number generator.  If all credits are not lost, the 
customer can print out a ticket representing his or her 
winnings.  That ticket is redeemable for cash from the store 
where the kiosk is located.  If all credits are lost, the 
customer receives no cash prize and cannot continue playing the 
video game without inserting more money.  The kiosks' video game 
pays out around 65% of all money inserted. 
¶6 
Inserting money into a kiosk also allows a customer to 
charge a cellphone using the kiosk's attached charging cord.  
Charging time is based on the amount deposited——$1 earns you one 
minute of charging time.  Quick Charge has two different styles 
of kiosks, and their cellphone charging functionalities work 
No.  2018AP947 
 
4 
 
differently.  If customers use a "Quick Charge" kiosk only for 
charging a phone, they can redeem the unused video game credits 
for cash after the charging time expires——100 unused credits 
equals $1.  In other words, charging can be done at no net cost.  
A "Pow'R Up" kiosk, on the other hand, requires the customer to 
play the video game at least once in order to redeem any 
credits. 
¶7 
Soon after these kiosks debuted in retail locations, 
the Attorney General opined that they were illegal gambling 
machines as defined by Wis. Stat. § 945.01(3).  Several kiosks 
were then seized by law enforcement for violating the statutory 
prohibition on gambling machines. 
¶8 
Quick Charge, along with its owner, responded with a 
declaratory judgment action naming the Attorney General in his 
official capacity.  It sought a declaration that the kiosks 
complied with the in-pack chance promotion exception under Wis. 
Stat. § 100.16(2) and thus were not in violation of any gambling 
laws under Wis. Stat. ch. 945.  The circuit court granted 
summary judgment in the Attorney General's favor, declaring the 
kiosks illegal gambling machines.2  The court of appeals affirmed 
that decision, Quick Charge Kiosk LLC v. Kaul, 2019 WI App 51, 
¶1, 388 Wis. 2d 525, 934 N.W.2d 18, and we granted Quick 
Charge's petition for review. 
 
                                                 
2 The Honorable John J. DiMotto, Milwaukee County Circuit 
Court, presided. 
No.  2018AP947 
 
5 
 
II.  STANDARD OF REVIEW  
¶9 
We review a summary judgment decision de novo, 
applying 
the 
same 
methodology 
as 
the 
circuit 
court 
but 
benefitting from the analyses of both courts below.  Eichenseer 
v. Madison-Dane Cty. Tavern League, Inc., 2008 WI 38, ¶30, 308 
Wis. 2d 684, 748 N.W.2d 154.  Summary judgment is appropriate 
when there is no genuine issue of material fact and "the moving 
party is entitled to judgment as a matter of law."  Wis. Stat. 
§ 802.08(2).  The parties agree on the material facts, but 
dispute questions of statutory interpretation and application.  
These are issues of law we review independently.  Heritage 
Farms, 
Inc. 
v. 
Markel 
Ins. 
Co., 
2012 
WI 26, 
¶24, 
339 
Wis. 2d 125, 810 N.W.2d 465. 
 
III.  DISCUSSION 
¶10 Quick Charge disputes that its kiosks are illegal 
gambling machines under Wis. Stat. § 945.01(3)(a).  The statute 
defines a gambling machine as "[1] a contrivance [2] which for a 
consideration [3] affords the player an opportunity to obtain 
something of value, [4] the award of which is determined by 
chance, even though accompanied by some skill and whether or not 
No.  2018AP947 
 
6 
 
the 
prize 
is 
automatically 
paid 
by 
the 
machine."  
§ 945.01(3)(a).3 
¶11 Of these four criteria, Quick Charge contests only the 
consideration requirement.4  It does so on two grounds.  First, 
Quick Charge looks to the lottery subsection which, along with 
the gambling machine definition, is found in Wis. Stat. 
§ 945.01. 
 
The 
lottery 
subsection 
contains 
a 
statutory 
definition of consideration, and includes an exception from that 
definition for "in-pack chance promotions" under Wis. Stat. 
§ 100.16(2).  § 945.01(5)(b)2.g.  Quick Charge argues that this 
same definition and exception should apply to the consideration 
requirement for gambling machines and that its kiosks are in-
pack chance promotions under § 100.16(2).  Second, Quick Charge 
asserts 
that 
its 
kiosks 
do 
not 
meet 
the 
consideration 
requirement for gambling machines anyway because a free play 
option is available. 
                                                 
3 While Wis. Stat. § 945.01(3) defines a gambling machine, 
other statutes set forth the applicable criminal penalties.  For 
example, Wis. Stat. § 945.03(1m)(e) dictates that anyone who 
"[s]ets up for use for the purpose of gambling or collects the 
proceeds of any gambling machine" is guilty of a felony.  And 
anyone who "[p]ermits a gambling machine to be set up for use 
for the purpose of gambling in a place under his or her control" 
is guilty of a misdemeanor under Wis. Stat. § 945.04(1m)(b). 
4 As for the other elements, it is clear that Quick Charge's 
kiosks are contrivances (mechanical devices) that afford an 
opportunity to obtain something of value by chance. 
Wisconsin 
Stat. 
§ 945.01(3)(b) 
also 
provides 
three 
exceptions to the gambling machine definition.  Quick Charge 
does not argue that its kiosks meet any of them. 
No.  2018AP947 
 
7 
 
¶12 Wisconsin Stat. § 945.01(5)(a) defines a lottery as 
"[1] an enterprise [2] wherein for a consideration [3] the 
participants are given an opportunity to win a prize, [4] the 
award of which is determined by chance, even though accompanied 
by some skill."  On its face, this definition is virtually 
identical to the gambling machine definition except for its 
application to an "enterprise" rather than to a "contrivance."  
However, the different subsections contain one other notable 
distinction.  Unlike gambling machines under § 945.01(3), the 
lottery subsection specifically defines "consideration" and 
expressly contains nine exceptions from that definition.  See 
§ 945.01(5)(b).5  One of those exceptions is "[u]sing a chance 
promotion exempt under s. 100.16(2)."  § 945.01(5)(b)2.g. 
¶13 Wisconsin Stat. § 100.16, found within a chapter 
addressing marketing and trade practices, sets forth a separate 
albeit related prohibition.  Subsection (1) prohibits selling 
items with the representation or pretense that a prize might be 
included with the purchase (i.e., a prize sale).  § 100.16(1).  
Subsection (2) then states that "[t]his section"——that is, 
§ 100.16 and its proscription of prize sales——"does not apply to 
                                                 
5 Wisconsin Stat. § 945.01(5)(b)1. provides:   
"Consideration" in this subsection means anything 
which is a commercial or financial advantage to the 
promoter or a disadvantage to any participant, but 
does not include any advantage to the promoter or 
disadvantage to any participant caused when any 
participant learns from newspapers, magazines and 
other periodicals, radio or television where to send 
the participant's name and address to the promoter. 
No.  2018AP947 
 
8 
 
an in-pack chance promotion," followed by seven criteria that 
must be met to qualify for this exception.  § 100.16(2).6  Thus, 
                                                 
6 Wisconsin Stat. § 100.16 provides:   
(1) No person shall sell or offer to sell anything by 
the representation or pretense that a sum of money or 
something of value, which is uncertain or concealed, 
is enclosed within or may be found with or named upon 
the thing sold, or that will be given to the purchaser 
in 
addition 
to 
the 
thing 
sold, 
or 
by 
any 
representation, pretense or device by which the 
purchaser is informed or induced to believe that money 
or something else of value may be won or drawn by 
chance by reason of the sale. 
(2) This section does not apply to an in-pack chance 
promotion if all of the following are met:   
(a) Participation is available, free and without 
purchase of the package, from the retailer or by mail 
or toll-free telephone request to the sponsor for 
entry or for a game piece. 
(b) The label of the promotional package and any 
related advertising clearly states any method of 
participation and the scheduled termination date of 
the promotion. 
(c) The sponsor on request provides a retailer with a 
supply of entry forms or game pieces adequate to 
permit free participation in the promotion by the 
retailer's customers. 
(d) The sponsor does not misrepresent a participant's 
chances of winning any prize. 
(e) The sponsor randomly distributes all game pieces 
and maintains records of random distribution for at 
least one year after the termination date of the 
promotion. 
(f) All prizes are randomly awarded if game pieces are 
not used in the promotion. 
(g) The sponsor provides on request of a state agency 
a record of the names and addresses of all winners of 
No.  2018AP947 
 
9 
 
an in-pack chance promotion is not a standalone provision.  It 
is a statutory exception to an illegal prize sale.  And, 
connecting 
this 
with 
Quick 
Charge's 
argument 
here, 
the 
legislature has also provided that an in-pack chance promotion 
is an exception to what might otherwise be considered an illegal 
lottery.  Wis. Stat. § 945.01(5)(b)2.g. 
¶14 Quick Charge contends its kiosks are in-pack chance 
promotions under Wis. Stat. § 100.16(2).  If so, they lack 
consideration as defined for lotteries.  The crux of Quick 
Charge's 
theory 
is 
that 
the 
statutory 
definition 
of 
consideration for lotteries should also be used for gambling 
machines.  If the same definition is used and the kiosks are in-
pack chance promotions, then the kiosks are not illegal gambling 
machines.  While creative, this theory runs headlong into basic 
principles of statutory interpretation. 
¶15 It is true that when a particular term is used 
throughout a chapter, we usually understand it to carry the same 
meaning each time.  Bank Mut. v. S.J. Constr., Inc., 2010 WI 74, 
¶31, 326 Wis. 2d 521, 785 N.W.2d 462.  But this principle only 
applies "absent textual or structural clues to the contrary."  
State v. Cox, 2018 WI 67, ¶17, 382 Wis. 2d 338, 913 N.W.2d 780 
(citation omitted).  Here, contrary clues abound. 
¶16 While 
the 
legislature 
expressly 
defined 
"consideration" for purposes of a lottery, exceptions and all, 
                                                                                                                                                             
prizes valued at $100 or more, if the request is made 
within one year after the termination date of the 
promotion. 
No.  2018AP947 
 
10 
 
it did not do the same for gambling machines.  And the separate 
gambling provisions are found in the exact same section of the 
Wisconsin Statutes.  To make its point crystal clear, the 
legislature provided that the lottery provision's definition of 
consideration, 
including 
its 
exclusion 
of 
in-pack 
chance 
promotions, applies only to "this subsection," meaning lotteries 
under Wis. Stat. § 945.01(5).  Nothing in the gambling machine 
provision cross-references lotteries under § 945.01(5) or in-
pack chance promotions under Wis. Stat. § 100.16(2). 
¶17 This textual language is far more than a tip; it is a 
dead giveaway.  The legislature explicitly excluded in-pack 
chance promotions from the definition of an illegal lottery, but 
not an illegal gambling machine.  The natural reading, and 
indeed the only reasonable one, is that the legislature meant 
the exception to apply to lotteries, and not gambling machines.  
Therefore, even if the kiosks met the requirements for in-pack 
chance promotions as defined in Wis. Stat. § 100.16(2), a 
question we do not need to answer here,7 nothing in any of the 
relevant statutes exempts the kiosks from the consequences of 
                                                 
7 In granting the Attorney General summary judgment, the 
circuit court rejected Quick Charge's argument that its kiosks 
met the seven criteria of an in-pack chance promotion under Wis. 
Stat. § 100.16(2).  Below, the court of appeals declined to 
consider those criteria after determining the exception has no 
application under Wis. Stat. § 945.01(3).  Quick Charge Kiosk 
LLC v. Kaul, 2019 WI App 51, ¶¶22, 35 n.9, 388 Wis. 2d 525, 934 
N.W.2d 18.  We do the same here. 
No.  2018AP947 
 
11 
 
the legislature's decision to prohibit and criminalize gambling 
machines.8 
¶18 This brings us to Quick Charge's argument that its 
kiosks otherwise fail to satisfy the consideration requirement 
of the gambling machine definition, which Wis. Stat. § 945.01(3) 
does not further define.  When statutory language is not 
specially defined or technical, it is given its "common, 
ordinary, and accepted meaning."  State ex rel. Kalal v. Circuit 
Court for Dane Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 
N.W.2d 110.  And if a word has a distinct meaning in the law——as 
"consideration" does——it should be given its accepted legal 
meaning.  See Mueller v. TL90108, LLC, 2020 WI 7, ¶19, 390 
Wis. 2d 34, 938 N.W.2d 566.  Black's Law Dictionary defines 
consideration as "[s]omething (such as an act, a forbearance, or 
a return promise) bargained for and received by a promisor from 
a promisee."  Consideration, Black's Law Dictionary (11th ed. 
2019).  We apply this definition here as it is consistent with 
                                                 
8 Quick Charge offers hypothetical in-pack chance promotions 
facilitated by a machine and wonders whether those too would 
constitute prohibited gambling machines——for example, a bottle-
cap promotion in which a soda is purchased in a vending machine 
or 
a 
fast-food 
promotion 
conducted 
online 
or 
through 
a 
smartphone app.  We need not determine the scope of what 
constitutes 
a 
"contrivance" 
or 
might 
otherwise 
meet 
the 
definition of a gambling machine or an in-pack chance promotion 
to conclude that the kiosks here meet the gambling machine 
definition in Wis. Stat. § 945.01(3). 
No.  2018AP947 
 
12 
 
the meaning of consideration in our common law.9  See, e.g., 
Story v. Menzies, 3 Pin. 329, 330-31 (1851) (explaining money 
paid in exchange for credit and a receipt was consideration); 
DOR v. River City Refuse Removal, Inc., 2007 WI 27, ¶¶50-51, 299 
Wis. 2d 561, 729 N.W.2d 396 (discussing various formulations for 
how Wisconsin courts have defined consideration, notably as a 
benefit to the promisor or a detriment to the promisee, and 
mutual promises for future performance). 
¶19 The kiosks' video game function wherein customers pay 
for an opportunity to obtain a cash prize falls within this 
understanding of consideration.  For customers who pay money to 
play the game, consideration occurs in two ways:  The customer 
first inserts money to receive video game credits.  Then the 
customer risks those credits in the video game.  Each step 
involves the customer trading something of value (money or 
credits) to obtain an opportunity to play the game and win 
something 
of 
value. 
 
This 
bargained-for 
exchange 
is 
a 
paradigmatic example of consideration. 
¶20 Quick Charge does not really argue otherwise.  Rather, 
it focuses on the fact that this is not always the case because 
                                                 
9 The 
definition 
of 
consideration 
under 
the 
lottery 
subsection is merely a lottery-focused gloss on this ordinary 
definition of consideration.  See Wis. Stat. § 945.01(5)(b)1. 
("anything which is a commercial or financial advantage to the 
promoter or a disadvantage to any participant").  That's not 
surprising.  Quick Charge's argument that the same word 
generally has the same meaning is usually correct.  But as 
explained above, that does not mean an exception written into 
one subsection should be copied and pasted into a different 
subsection where the exception does not appear. 
No.  2018AP947 
 
13 
 
customers can play the kiosk's video game without inserting 
their own money.  Although neither has ever been used, Quick 
Charge offers two methods of free play.  Customers can mail a 
form and self-addressed envelope to Quick Charge, and receive in 
return a certificate that can be exchanged at a retail location 
for one dollar to insert into a kiosk.  Customers can also 
request a Quick Charge employee play a dollar's worth of credits 
on their behalf and mail out any resulting winnings. 
¶21 Free play option or not, Quick Charge's argument does 
not overcome the reality that its kiosks can be used as gambling 
machines.  Wisconsin Stat. § 945.01(3) does not define a 
gambling machine as a contrivance whose sole use is gambling.  
It says the opposite, namely, that a "gambling machine is a 
contrivance which for a consideration affords the player an 
opportunity to obtain something of value, the award of which is 
determined by chance."  § 945.01(3) (emphasis added).  Quick 
Charge's kiosks afford such an opportunity when a customer pays 
to play the video game.  And when paying for the chance to win 
something of value, the consideration element is undoubtedly 
No.  2018AP947 
 
14 
 
met.  Simply because a kiosk has uses other than illegal 
gambling does not negate that reality.10 
¶22 In sum, because customers can pay to play a video game 
that awards cash prizes based on chance, Quick Charges' kiosks 
are gambling machines under Wis. Stat. § 945.01(3)(a).  This 
conclusion is not affected by the definition of consideration 
for lotteries under § 945.01(5), or that subsection's exclusion 
of in-pack chance promotions under Wis. Stat. § 100.16(2).  
Likewise, the kiosks are no less gambling machines just because 
they can also be used for non-gambling purposes, including 
                                                 
10 Other jurisdictions have similarly concluded that a free 
play option alone is not decisive evidence regarding whether 
something constitutes a form of illegal gambling.  See, e.g., 
Barber v. Jefferson Cty. Racing Ass'n, 960 So. 2d 599, 612-15 
(Ala. 2006) ("Thus, the readers are slot machines as to those 
who pay to play them.  Are they any less so because a few 
patrons play for free?  We think not. . . .  Gratuitous entries 
obtained by mail or at the race track do not legitimize the 
high-stakes MegaSweeps any more than some opportunity for free 
plays could render innocuous a conventional slot machine."); see 
also 38 Am. Jur. 2d Gambling § 2 ("The opportunity for free 
plays does not negate the element of 'consideration' or obviate 
an inquiry into the purpose and effect of the operation as the 
final proof of consideration."). 
The case Quick Charge cites for countervailing free play 
authority did not actually find a lack of consideration based on 
the availability of such an option.  See Mid-Atl. Coca-Cola 
Bottling Co., Inc. v. Chen, Walsh & Tecler, 460 A.2d 44 (Md. 
1983).  At issue there was a Coca-Cola promotion based on bottle 
caps that could be obtained for free or through the purchase of 
various Coca-Cola products.  Id. at 104.  The Maryland court 
concluded the promotion was not an illegal lottery because there 
was no consideration for the chance to win a prize.  Id. at 108.  
But that was so because no one paid for a chance as the price of 
Coca-Cola products stayed constant before, during, and after the 
promotion——i.e., every chance to win was a gift.  Id.  The same 
cannot be said for Quick Charge's kiosks. 
No.  2018AP947 
 
15 
 
cellphone charging and limited gratuitous use of their video 
game function.  Therefore, Quick Charge's action seeking a 
declaration that its kiosks are not illegal gambling machines 
was correctly denied, and the circuit court properly granted 
summary judgment in the Attorney General's favor. 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
No.  2018AP947 
 
 
 
1