South Carolina Group Sues Dave & Buster’s, Alleges Illegal Gambling
Credit: Ser Amantio di Nicolao/Wikimedia Commons
A newly-formed advocacy group in South Carolina has sued Dave & Buster’s, alleging that the national entertainment chain’s business model constitutes illegal gambling.
Like many arcades, D&B allows customers to win tickets while playing games. They can then exchange these tickets for prizes. In D&B’s case, that can include electronics with a resale value of hundreds of dollars.
According to SC Citizens For Equal Enforcement of Gambling Laws, LLC, the D&B business model fits key characteristics of illegal gambling. Crucially, the lawsuit says, “whether an activity is gaming/gambling is not dependent upon the relative roles of chance and skill, but whether there is money or something of value wagered on the game’s outcome.”
Because of the high values attached to some of the prizes available at D&B, and because players are encouraged to spend money to try to earn these prizes, the lawsuit contends that D&B is operating a gambling business by South Carolina’s definition.
“Defendant’s redemption gaming machines are precisely the type of machines prohibited by South Carolina law,” the lawsuit said. “Patrons purchase Power Card gaming credits at kiosks for the express purpose of trying to “win” more — in the form of tickets redeemable for valuable prizes — whether by skill or chance.”
Advantage Gamblers Have Targeted Dave & Buster’s
While most people don’t see Dave & Buster’s and immediately think “disguised casino” or “gambling,” it has flirted with the line before.
For one thing, in 2024, D&B partnered with a company called Lucra to pair its arcade games with a betting app. Essentially, players with loyalty accounts at D&B could load money into their digital wallets. They could then use the “Playce It” function to bet against another player on the results of one of the arcade games.
From D&B’s description of Playce It:
“How much money is on the line? That’s up to you. Just create or accept a matchup with another player and get ready for some head-to-head action.”
It’s not clear whether the function gained any traction. D&B still lists Playce It as available in four states, though South Carolina isn’t among them. Despite the lawsuit’s claims, the relative balance of luck and skill does make a difference in some jurisdictions, and D&B relies on the skill element of its games (as well as the peer-to-peer structure) to stay on the right side of the law in Texas, Georgia, Missouri, and California, where Playce It is available.
If there was any doubt about the skill element or the value of the prizes, that combination of factors has given rise to a small community of advantage players targeting D&B, the way sharp bettors target sportsbooks and casinos. WIRED covered the phenomenon in an extensive feature in 2015. In some cases, the mechanics of D&B advantage play are similar to those of slot machines. While a skill element differentiates D&B, having an edge in certain games demands knowledge of the game state, much like evaluating a slot machine that’s primed to deliver a jackpot.
According to the lawsuit, D&B retains almost 92 cents per dollar, meaning the business model returns a microscopic 8% to the player.
Lawsuit Against Dave & Buster’s Seeks Treble Damages
As part of the lawsuit, SC Citizens For Equal Enforcement of Gambling Laws seeks treble damages on all losses of $50 or more by any individual customer at any given visit to D&B. It specifies that a “moiety” of any recovery should go to the plaintiff, while the rest goes to “the county in which the offense shall have been committed,” as per South Carolina law.
The law in question derives from the Statute of Anne, a 1700s-era British law that allows gambling losses in excess of $25 to sue and recover those losses. If the afflicted party fails to sue within three months, then a third party may step in and sue.
Other lawsuits have cited old Statute of Anne laws. These haven’t generally met with much success.
Who Comprises SC Citizens for Equal Enforcement of Gambling Laws?
The real question behind the lawsuit is who makes up the SC Citizens for Equal Enforcement of Gambling Laws. Are they a bunch of concerned citizens or is something else afoot?
The group provided a statement to local news:
“SLED, and other law enforcement agencies, have seized video games, revoked beer and wine licenses, and have threatened criminal cases against local businesses for operating video games like the ones at the Dave & Buster’s locations in South Carolina … Through this lawsuit, SC Citizens for Equal Enforcement of Gambling Laws LLC hopes to bring clarity and equality to the video game entertainment industry in South Carolina.”
South Carolina has a bit of a history with gambling-adjacent products, and this statement may reference that. In 2013, the state government stamped out video gambling that was taking place in bars and restaurants. That was the culmination of a decade-plus fight. Local estimates claimed there was a video gambling machine for every square mile in the state.
Missouri is going through a similar battle against video lottery terminals (VLTs).
There’s also the ongoing, state-by-state attempt to regulate sweepstakes gambling. In a way, D&B uses a dual-currency model that isn’t much different from sweepstakes. Players exchange money for tickets, then exchange the tickets back in for items that have monetary value.
By “bring clarity” to the video game entertainment industry, could this group actually mean “clear a legal path for video gambling or sweepstakes gaming?” How the case proceeds and any follow-up legal moves will shed more light on the motivations behind the suit.
Image credit: Ser Amantio di Nicolao/Wikimedia Commons (license)
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