Pace-O-Matic Suffers Setback in Skill Games Dispute in Kansas
The Kansas Supreme Court recently delivered a ruling in a long-standing legal dispute involving Pace-O-Matic's subsidiary, POM of Kansas, and its skill-based electronic game, Dragon's Ascent. The court upheld a lower court's dismissal of POM of Kansas' claims that the game was lawful under state regulations and not subject to gambling laws. This decision is a significant setback for the company, which has been advocating for the recognition of its game as a skill-based contest rather than a game of chance.
LISTEN TO THIS ARTICLE:The original lawsuit, filed in 2019, sought a declaratory judgment confirming that Dragon's Ascent complied with Kansas statutes. POM of Kansas argued that their game, available in locations such as truck stops and convenience stores, was fundamentally different from regulated slot machines due to its reliance on player skill. The company contended that this distinction exempted Dragon's Ascent from the state's casino gambling laws.
Related: Pace-O-Matic's Skill Games Declared Legal by Pennsylvania CourtThe Supreme Court's decision was grounded in the lack of subject matter jurisdiction, determining that the courts did not have the legal authority to decide the case. POM of Kansas struggled to establish standing, as there was no direct evidence of harm or credible threat of enforcement action against the company or its devices. The court noted that the game had operated in Kansas for years without interference from state authorities, such as seizures, prosecutions, or cease-and-desist orders.
Justice Keynen Wall, who authored the court's opinion, highlighted the absence of any adverse action against Dragon's Ascent by state entities. While the game's legal status might pose practical challenges for the company, Wall emphasized that such challenges did not meet the constitutional requirements for a judicial case or controversy. The court reaffirmed that judicial authority could not be expanded simply to provide clarity in uncertain situations.
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Dragon's Ascent, an arcade-style game where players shoot at dragons to win prizes, has not been regulated by the Kansas Racing and Gaming Commission (KRGC) in the same manner as casino slot machines. Concerns about its classification as a gambling device led POM of Kansas to seek formal opinions from the KRGC and the Kansas Attorney General's Office. However, both entities declined to issue definitive rulings, leaving the company without a clear legal adversary or evidence of harm necessary to sustain its lawsuit.
Attorney Thomas Hamilton, representing POM of Kansas, pointed to communications from KRGC director Don Brownlee as a potential factor influencing the game's reception in the market. According to Hamilton, a letter from Brownlee to law enforcement agencies implied that Dragon's Ascent was not a legal skill-based game. This letter, combined with KRGC employees' tests of the game's mechanics, contributed to uncertainty among potential business partners about installing the game.
Hamilton argued that the implied warnings from the KRGC led to lost business opportunities and revenue for POM of Kansas. Despite these claims, the Supreme Court maintained that the lack of direct enforcement actions or legal threats undermined the company's standing in court. Under current Kansas law, no formal process exists to certify games like Dragon's Ascent as skill-based rather than chance-based, further complicating the issue.
The Supreme Court's ruling does not mark the end of legal disputes over skill games in Kansas. A related case is ongoing in Shawnee County District Court, where casino operators have alleged that Dragon's Ascent is both illegal and financially detrimental to their businesses. This separate litigation highlights the broader tensions surrounding the regulation and classification of so-called gray games within the state.
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