Ad-Tabs Ruled Illegal Lottery

Date: September 28, 2004

Contact: Enforcement Director Rick Perkins, 517-322-1370

Agency: Michigan Liquor Control Commission

The Michigan Liquor Control Commission ("Commission") and the Michigan Bureau of State Lottery ("Lottery") have been involved in a lawsuit with F.A.C.E. Trading, Inc., which produces and distributes Ad-Tabs, a pull-tab type lottery game. The Commission and Lottery have always contended that Ad-Tabs are an illegal pull-tab game tantamount to a lottery contrary to the state penal code. During the court proceedings, the Commission and Lottery were prohibited by an injunction from taking any enforcement action against retailers selling Ad-Tabs.  On June 30, 2004, the Honorable James R. Giddings, Ingham County Circuit Court Judge, ruled that Ad-Tabs do constitute a lottery or a gift enterprise forbidden by Section 372(1) of the Michigan Penal Code, being MCL 436.372(1).  The Michigan Court of Appeals and the Michigan Supreme Court have denied a stay of the Circuit Court ruling pending appeal. Accordingly, Judge Gidding's decision is immediately effective and the selling or possessing of Ad-Tab game pieces is illegal and subject to enforcement action.

Enforcement  Action:

Based on Judge Gidding's decision, any licensee selling or possessing Ad-Tabs or any similar pull-tab lottery games not approved by the Michigan Bureau of State Lottery will be subject to enforcement action.  In order to comply with the Michigan law:

• Ad-Tab sales should cease immediately
• All Ad-Tab game pieces must be removed from licensed premises no later than October 17, 2004.
• Failure to cease sales and remove all Ad-Tab tickets from licensed premises by October 17, 2004 will result n enforcement action by the Michigan Liquor Control Commission. Failure to comply with the directive may result in a fine of up to $300 per charge, and/or license suspension, and/or liquor license revocation.