In a landmark decision, the Kansas Supreme Court ruled that POM of Kansas, a subsidiary of game manufacturer Pace-O-Matic, lacked the standing to pursue its five-year legal battle over the legality of its Dragon’s Ascent arcade game.
This decision highlights the complexities surrounding skill-based and chance-based gaming in Kansas, leaving broader questions about regulation unresolved.
Background of the Legal Dispute
In 2019, POM of Kansas filed a lawsuit seeking a declaratory judgment to affirm that its Dragon’s Ascent game complied with Kansas law.
The company argued that its game was a contest of skill rather than a game of chance, which would make it exempt from the state’s casino regulations.
However, the state Supreme Court dismissed the claims, upholding the district court’s ruling that Kansas courts lacked jurisdiction to address the case.
The court found no credible threat of seizure, prosecution, or cease-and-desist orders against POM of Kansas for operating Dragon’s Ascent.
Key Points from the Kansas Supreme Court Ruling
- Lack of Standing:
The court ruled that POM of Kansas failed to establish standing because there was no actual harm or credible threat from the state.- Justice Keynen “K.J.” Wall noted that the game had operated for years without incident, seizures, or prosecutions.
- The court emphasized that the Kansas Constitution requires an actual case or controversy, which was absent in this instance.
- Jurisdiction Issues:
- The court determined it could not expand its judicial power to address hypothetical or uncertain legal challenges.
- The absence of adversarial harm undermined the company’s ability to bring the lawsuit forward.
- Ambiguities in Game Classification:
- The game, played at convenience stores and truck stops, involves shooting dragons to win prizes redeemable for cash.
- Concerns about whether Dragon’s Ascent qualifies as a skill-based game or an illegal gambling device remain unresolved under current Kansas law.
Details of Dragon’s Ascent and the Dispute
| Aspect | Details |
|---|---|
| Game Type | Arcade-style game where players shoot dragons to win prizes. |
| Company’s Argument | Dragon’s Ascent is a skill-based game distinct from regulated casino slot machines. |
| State’s Argument | No formal certification exists to determine whether such games are skill-based or chance-based. |
| Legal Outcome | Kansas Supreme Court dismissed the case due to lack of standing and credible threat. |
Key Challenges Highlighted
- Lack of Regulation:
Kansas law currently lacks a formal process for certifying games as skill-based, leaving companies like POM of Kansas in a legal gray area. - Indirect Warnings:
POM alleged that communications from the Kansas Racing and Gaming Commission (KRGC) indirectly discouraged businesses from installing Dragon’s Ascent. - Lost Revenue:
- POM claimed the legal uncertainty and warnings from the KRGC caused financial harm, as businesses refrained from adopting the game.
- Casino operators in Kansas argued that such games diverted revenue from their establishments.
Ongoing Legal and Industry Implications
The Supreme Court’s decision does not end the broader debate over so-called gray games in Kansas.
A separate lawsuit in Shawnee County District Court, involving Kansas casino companies, argues that Dragon’s Ascent is illegal and causes financial harm to regulated operators. This case could shape the future of gaming regulation in the state.
The Kansas Supreme Court’s decision underscores the challenges of navigating unregulated gaming landscapes.
While POM of Kansas failed to establish standing, the broader legal and regulatory questions surrounding skill-based games remain unresolved.
As litigation continues, businesses and regulators alike must grapple with the evolving dynamics of the gaming industry. Kansas’ approach to these disputes could set important precedents for other states facing similar challenges.
FAQs
What is Dragon’s Ascent?
Dragon’s Ascent is an arcade-style game where players shoot dragons to win prizes, with the company arguing it is skill-based rather than chance-based.
Why did the Kansas Supreme Court dismiss the case?
The court ruled that POM of Kansas lacked standing because there was no credible threat of seizure, prosecution, or harm from state regulators.
What’s next for gaming regulation in Kansas?
A separate lawsuit in Shawnee County District Court could address the classification and legality of skill-based games like Dragon’s Ascent.
