The truth versus the myths of redemption games

Business owners and advocates for social halls, local restaurants and neighborhood taverns are praising a Senate Bill 1065, a bipartisan piece of the legislation aimed at ensuring a vital revenue stream stays in place for these businesses as they continue to face financial hardships. 

This is a bill critical to the financial success of businesses across Michigan, making it especially important to know what’s the truth and what is a myth about redemption games.  

Myth: The bill legalizes games that have previously been illegal. 

Truth: The legislation does not legalize games that have been illegal in the past.  Redemption Games are legal under current Michigan law as long as the game requires a player to apply “skill” in order to win a prize. Slot machines and other casino games that are based entirely on chance and require no application of skill and are, and remain, illegal (except in a licensed casino) under the proposed legislation. The proposed legislation clarifies the existing law by providing an understandable, workable definition of the skill needed to win the game; that has been lacking until now. 

Myth: The legislation establishes a new form of gaming in Michigan.   

Truth: Michigan has allowed the form of gaming known as “Redemption Gaming” since 1997 when the Legislature approved such games as an exception in the Penal Code.  Rather than allowing a new form of gaming, the proposed legislation offers important clarifications to the current law.  The clarifications are intended to help bars, restaurants and social halls (e.g., American Legion, VFW, FOE, Elks, etc.) to clearly understand what is and is not allowed in their establishments. 

Myth: Redemption Gaming will lead to more crime in bars and taverns.    

Truth: The proposed legislation will not lead to more crime.  In fact, the proposed legislation will reduce crime. People often confuse legitimate Redemption Gaming conducted in bars and taverns with a form of illegal gambling conducted in so called “sweepstakes parlors” or “internet cafes.”  Such establishments, which often appear and disappear quickly in strip malls or vacant store fronts, offer games that require no element of skill.  The games in such establishments are casino-style slot machines.  The operators of these parlors offer cash or gift cards as prizes.  The proposed legislation strictly prohibits an award of cash as a prize.  Additionally, the legislation limits the number of game machines offering gift cards as prizes to eight machines.  The prohibition against cash prizes and the limitation on the number of machines renders the operation of a sweepstakes parlor or internet café financially unfeasible. 

Restaurant owners, social hall operators hail committee passage of redemption games bill 

June 14, 2022

Senate panel approves bill creating clear regulatory framework for hard-hit hospitality industry 

LANSING — Social hall operators, restaurant owners and others in the hospitality industry are applauding today’s Senate committee to create clear rules for redemption games, helping business owners continue to realize a potential revenue stream during challenging economic times. 

The Senate Regulatory Reform Committee voted 6-3 today to approve Senate Bill 1065 and it now moves to the full Senate for a vote. 

State Sen. Dan Lauwers, R-Brockway Township, said he introduced the bill to provide clarity to regulations over redemption games because they provide business owners an important revenue stream when they greatly need it. Bars, restaurants, arcades and social halls continue to face high costs, labor shortages and low supply levels due to ongoing supply chain challenges.  

“We’re not trying to create anything new with this bill, we are simply trying to clarify what is allowed – and what is not allowed – so small business owners and charitable organizations are not unfairly penalized by state regulatory agencies,” said Lauwers, the Senate majority floor leader. 

Redemption games are games that require some skill, whether it is a timing maneuver on a video screen, moving a crane arm or solving a puzzle. They provide opportunities for players to win prizes ranging from stuffed animals to gift cards. And they mean another revenue stream for small businesses that continue to grapple with fallout from the pandemic. 

A survey of more than 40 bars and restaurant owners by the Michigan Licensed Beverage Association showed that these redemption games help attract customers and keep patrons in seats longer. Some of these business owners report redemption games can bring in $8,000 to $20,000 in additional revenue each year. 

Leo Cowdry, the post commander of the Bath American Legion Post 412 in Bath, Michigan, said his hall has a handful of redemption games and they play an important part in revenue for the hall so it can continue to offer services for area veterans.  

“Senate Bill 1065 will help us avoid the uncertainty and confusion that arises when a 25-year-old law hasn’t been updated,” Cowdry said. “This bill would create clarity for these kinds of games and, ultimately, it is a way for the state to support veterans across Michigan, the proud men and women who have bravely and selflessly served this country.”