American Amusements Co. v. Nebraska Dept. of Rev.

A mericAn A musements co., A nebrAskA corporAtion,
And G reAter A mericA distributinG, inc., A nebrAskA
corporAtion, Appellees , v. nebrAskA depArtment
of revenue , A nebrAskA stAte AGency,
et Al ., AppellAnts.
807 N.W.2d 492
Filed December 23, 2011. 	No. S-10-804.
1. Declaratory Judgments. An action for declaratory judgment is sui generis;
whether such action is to be treated as one at law or one in equity is to be deter-
mined by the nature of the dispute.
2. Equity: Appeal and Error. On appeal from an equity action, an appellate court
tries factual questions de novo on the record and, as to questions of both fact and
law, is obligated to reach a conclusion independent of the conclusion reached by
the trial court. But when credible evidence is in conflict on material issues of
fact, an appellate court considers and may give weight to the fact the trial court
observed the witnesses and accepted one version of the facts over another.
3. Statutes: Appeal and Error. Statutory interpretation is a question of law, which
an appellate court resolves independently of the trial court.
4. ____: ____. Statutory language is to be given its plain and ordinary meaning,
and an appellate court will not resort to interpretation to ascertain the meaning of
statutory words which are plain, direct, and unambiguous.
5. Gaming: Words and Phrases. Gambling occurs in Nebraska when a bet is
placed on an outcome that is determined predominantly by chance.
6. Injunction. An injunction will not lie unless the right is clear, the damage is
irreparable, and the remedy at law is inadequate.
Appeal from the District Court for Lancaster County: steven
d. burns, Judge. Affirmed.
Jon Bruning, Attorney General, L. Jay Bartel, and Michael
B. Guinan, and Mark C. Laughlin, Special Assistant Attorney
General, of Fraser Stryker, P.C., L.L.O., for appellants.
Thomas J. Culhane and Patrick R. Guinan, of Erickson &
Sederstrom, P.C., for appellee American Amusements Co.
Thomas M. Locher and Joseph J. Kehm, of Locher, Pavelka,
Dostal, 	Braddy 	& 	Hammes, 	L.L.C., 	for 	appellee 	Greater
America Distributing, Inc.
H eAvicAn, 	c.J., 	WriGHt, 	connolly, 	G errArd, 	stepHAn,
mccormAck , and miller-lermAn, JJ.
908 	282 NEBRASKA REPORTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:44 AM CST

stepHAn, J.
This appeal focuses on the legality of a video gaming
device known as Bankshot, which was developed by American
Amusements Co. (American Amusements) and distributed by
Greater America Distributing, Inc. (collectively appellees).
Appellees filed this lawsuit after the State seized two Bankshot
devices as alleged illegal gambling devices, seeking a declara-
tion that they were not illegal. The state agencies and officers
who were named as defendants filed a counterclaim seeking a
declaration that Bankshot was a “game of chance” and there-
fore an unlawful gambling device. Following a bench trial, the
district court for Lancaster County found that Bankshot was
a game of chance when played in some modes, but not when
played in others. The court declined the request for injunc-
tive relief by the named state agencies and officers, who now
appeal from the judgment. We affirm.
I. FACTS AND PROCEDURAL HISTORY
1. bAckGround
John Fox is the president of American Amusements. In mid-
2007, prior to marketing Bankshot, Fox asked a Nebraska State
Patrol officer, Don Littrell, to assess the legality of the proto-
type. Fox understood that Littrell was the State of Nebraska’s
gambling device expert, and Littrell agreed that he was the
State Patrol’s “go-to-guy” in this area. Littrell advised Fox and
American Amusements that the initial prototype of Bankshot
was not legal, because the game did not involve a predomi-
nance of player skill. American Amusements then redesigned
Bankshot and again asked Littrell to assess its legality. Littrell
recommended submitting Bankshot to a third-party testing
facility and suggested two such facilities: Eclipse Compliance
Testing and Gaming Laboratories International. In late summer
2007, Eclipse Compliance Testing tested the device and issued
a written report in October 2007 concluding that Bankshot was
predominantly a game of skill and therefore was a legal device
in Nebraska.
Around January 2008, Bankshot games were placed into
service in Nebraska. As many as 430 Bankshot games were
located in 143 different Nebraska cities. After the Bankshot
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	909
Cite as 282 Neb. 908

games had been in place for approximately 1 year, American
Amusements received notice from the Nebraska Department of
Revenue that additional testing of Bankshot was necessary, and
American Amusements agreed to provide a Bankshot device
for the additional testing. But before it did so, the State seized
two Bankshot devices and submitted the devices for testing
at both Eclipse Compliance Testing and Gaming Laboratories
International. In a letter dated April 14, 2009, the director of
the Charitable Gaming Division stated that the purpose of this
testing “was to obtain opinions on whether Bank[s]hot was
primarily a game of chance, and therefore illegal, or primarily
a game of skill.” The testing again concluded that Bankshot
was primarily a game of skill and was thus legal in Nebraska.
At least one of the Bankshot devices submitted for testing used
the same version of software that was in use at the time of trial
in this case.
In September 2009, the State seized two more Bankshot
devices. At the time of trial, these devices had not been returned.
On September 17, appellees filed this declaratory judgment
action, naming as defendants the Nebraska Department of
Revenue; the Nebraska State Patrol; Col. Bryan Tuma, the
superintendent of the Nebraska State Patrol; Doug Ewald, the
Nebraska Tax Commissioner; and Jon Bruning, the Nebraska
Attorney General (collectively the State).
2. bAnksHot GAme
(a) Basics of Game
The Bankshot gaming device is equipped with a 19-inch
video monitor, on which all game play is displayed; a cur-
rency acceptor; and either a thermal voucher printer or a
ticket dispenser. A player interacts with the game by using the
touchscreen interface to complete game play, and the device
also includes a single-button interface (located just below the
monitor) which the player can use to initiate game play and
stop on puzzles.
A player may insert $1, $5, $10, or $20 into the Bankshot
currency acceptor. One hundred game credits are received for
each $1 inserted into the machine. The game rules and play
instructions are accessed by selecting the “Help” button on
910 	282 NEBRASKA REPORTS

the touchscreen. The first screen displayed explains the game
play process.
To initiate a game, the player selects the number of credits to
put at risk, choosing from 25, 50, 100, or 400. Each Bankshot
game consists of a series of puzzles presented to the player as
a three-by-three grid of pool balls, and the object of the game
is to solve puzzles by creating a winning “tic-tac-toe” combina-
tion of three like-colored balls in a row. The puzzles will never
by default contain a winning combination of three pool balls in
a row of the same color, but a winning combination is possible
with respect to each puzzle.
The game begins when the player presses the play button on
the touchscreen or button panel. At that time, depending upon
the mode of play selected, the pool balls will either start to spin
or scroll indefinitely until the player chooses to stop on a given
puzzle. Once the balls have stopped, the player then decides
where to replace one of the nine displayed pool balls with a
ball marked “Wild.” The player does this by touching a ball
displayed on the screen to replace it with the “Wild” ball.
(b) Modes of Play
A player may choose from three different modes of puzzle
presentation by selecting one of three buttons labeled “Spin,”
“Slow,” or “Fast.” All three modes present the same puzzles in
slightly different ways. When a player chooses to play in Spin
mode, the nine pool balls displayed on the screen begin to spin
in place simultaneously when the player presses start. They
will then all come to a brief stop, after which they will begin to
spin again. This continues indefinitely until the player presses
the stop button.
The Slow and Fast modes of play both display the pool
balls scrolling across the screen in a backward “S” pattern
from left to right, top to bottom. When played in Slow mode,
the balls continuously scroll and a green number appears on
every ninth ball. The green number denotes where each puzzle
in the chain starts. When the player presses the stop button,
the scrolling pool balls stop when the ball with the green
number then displayed on the screen reaches the lower right
position of the play screen. In Fast mode, the balls will pause
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	911
Cite as 282 Neb. 908

on each puzzle as it is scrolled, similar to the pause during
Spin mode play.
(c) Prizes
Prize amounts are based in part upon how long it takes
a player to select a ball and replace it with the “Wild” ball
once the player chooses a puzzle. A time meter is displayed
graphically by a slider bar directly below the puzzle display.
When a player chooses a puzzle, a black dot begins to move
across the slider bar from left to right, through four regions
colored green, yellow, orange, and red. If the player places the
“Wild” ball while the black dot is in the green region, the prize
amount is multiplied by 1.5. The yellow and largest region
awards the amount risked, the orange region awards one-half
of the amount risked, and the red region awards one-quarter of
the amount risked. If the player fails to make a selection by the
time the black dot reaches the far right side of the slider bar,
which takes approximately 6 seconds, no prizes are awarded
for that particular puzzle.
Prizes also vary depending on how many credits are put
at risk and what color combination of pool balls creates the
tic-tac-toe. Each pool ball has both a number and a distinct
color: “1-balls” are yellow, “2-balls” are blue, “3-balls” are
orange, “4-balls” are purple, “5-balls” are red, “6-balls” are
green, “7-balls” are maroon, and “8-balls” are black. Pool balls
labeled “Bonus” are also presented. A player may want to play
one puzzle rather than another because certain puzzles contain
larger possible winnings than others. The value of winning
combinations is explained on the help screen and is displayed
on the right side of the game screen during game play. During
play, the three lowest paying matching combinations (three
maroon 7-balls, three green 6-balls, or three orange 3-balls)
always award the player less than the amount of credits put at
risk to play the puzzle. A combination of three blue 2-balls can
award at least the amount of credits put at risk. Combinations
of three purple 4-balls, three yellow 1-balls, three red 5-balls,
three “Bonus” balls, or three black 8-balls can award credits
worth more than the amount risked.
912 	282 NEBRASKA REPORTS

(d) Bonus Features and Jackpot
Bankshot also offers three bonus features: The “Fast Break,”
the “Speed Break,” and the “Pool” bonus. The Fast Break and
Speed Break bonuses are earned, respectively, when a player
correctly solves a specified number of the first puzzle pre-
sented and when the player quickly solves a specified number
of puzzles. The Pool bonus is reached if a player creates a tic-
tac-toe of three “Bonus” pool balls.
A jackpot prize is also available when a player correctly
solves a puzzle with three 8-balls. When a puzzle presenting
a jackpot solution will appear to a player is determined by a
counter, and a jackpot puzzle will be presented either every
144,550 or 433,650 puzzles. The jackpot prize is awarded based
on the number of games played at all Bankshot locations. As
of February 12, 2010, Bankshot had been played 65,593,983
times and 50 jackpot prizes had been awarded.
(e) Puzzle Distribution
Bankshot puzzles are contained in software tables identified
as “Table A,” “Table B,” and “Table C.” Each table contains
10,325 puzzles, arranged in a fixed circular or loop fashion, so
that once the last puzzle in a table has been presented, the next
puzzle presented from that table will be the first puzzle. When
a player begins a Bankshot game, the first puzzle presented
will be the next sequential puzzle from Table A. If the first
puzzle is not chosen for play by the player, the next puzzle
presented will be the next sequential puzzle from Table B.
If the second puzzle is not chosen for play by the player, the
next puzzle presented will be the next sequential puzzle from
Table C. If this puzzle is not chosen, the next puzzle presented
will be the next sequential puzzle from Table C, and all sub-
sequent puzzles will be presented sequentially from Table C
until a puzzle is chosen for play by the player. The cycle then
starts over, with the first puzzle then presented coming from
Table A. There is no time constraint on the player to select a
puzzle. A player is not informed during game play how the
puzzles are presented.
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	913
Cite as 282 Neb. 908

3. proceedinGs beloW
After conducting a bench trial, the district court determined
that the proper standard in Nebraska for determining whether a
game constitutes gambling is whether the outcome bet upon is
determined predominantly by skill or by chance: if by skill, it
is not gambling, but if by chance, it is. Applying this standard,
it found the State had proved beyond a reasonable doubt that
when Bankshot was played in Slow mode, the outcome was
determined predominantly by chance and thus was gambling.
It found that neither party had carried its burden of proof with
respect to whether playing Bankshot in Fast mode was gam-
bling. And the court determined by a preponderance of the
evidence that Bankshot when played in Spin mode was not
gambling, because the outcome of the game was determined
predominantly by player skill.
The court found that whether Bankshot’s Pool bonus and
jackpot were gambling depended upon which mode of play
they arose in: when played in Spin mode, they were not gam-
bling, but when played in Slow mode, they were. It held that
both the Fast Break bonus and the Speed Break bonus were
gambling beyond a reasonable doubt. Ultimately, the district
court concluded that Bankshot was usable for gambling and
was thus a gambling device under Nebraska law. But it refused
the State’s request for injunctive relief, reasoning that there was
no showing that appellees knowingly used Bankshot to advance
unlawful gaming activity.1 The State filed a timely notice of
appeal and a petition to bypass, which we granted.
II. ASSIGNMENTS OF ERROR
The State assigns, restated, that the district court erred in
(1) determining its claims for declaratory and injunctive relief
presented actions at law and not equity actions; (2) determin-
ing that the State bore the burden to prove beyond a reasonable
doubt that Bankshot involved gambling by use of a gambling
device; (3) determining that the definitions of gambling and
gambling device should be interpreted to require that chance
be the predominant factor in determining outcome rather than
1 See Neb. Rev. Stat. § 28-1107(1) (Reissue 2008).
914 	282 NEBRASKA REPORTS

finding that only an element of chance must determine outcome;
(4) failing to determine that Bankshot involves gambling by use
of a gambling device because play of the game involves betting
something of value on the outcome of a future event which is
determined by an element of chance; (5) failing to determine
that Bankshot play involves betting something of value on the
outcome of a future event which is determined predominantly
by chance rather than player skill; (6) determining that the
outcome of Bankshot when played in Spin mode (including the
Pool bonus outcome) is determined predominantly by player
skill rather than chance; (7) failing to determine that the out-
come of Bankshot when played in Fast mode (including the
Pool bonus outcome) is determined predominantly by chance
and not player skill; (8) failing to determine that chance and
not player skill is the predominant factor in determining the
jackpot outcome of the Bankshot game; (9) failing to determine
that the Fast Break and Speed Break bonuses in the Bankshot
game, other than the determination of the amount of prize
awarded, are determined primarily by chance and not by player
skill; (10) finding only that Bankshot was an illegal gambling
device “as currently configured and programmed” and failing
to find that the device was an illegal gambling device in all
play modes; and (11) denying an injunction to prevent contin-
ued use, distribution, placement, or possession of the Bankshot
gaming device.
III. STANDARD OF REvIEW
[1,2] The parties sought both declaratory and injunctive
relief in the district court. An action for declaratory judgment
is sui generis; whether such action is to be treated as one at
law or one in equity is to be determined by the nature of the
dispute.2 Because an action for injunction sounds in equity,3
we conclude that our standard of review for equity actions is
2 Wetovick v. County of Nance, 279 Neb. 773, 782 N.W.2d 298 (2010);
Homestead Estates Homeowners Assn. v. Jones, 278 Neb. 149, 768 N.W.2d
436 (2009).
3 Conley v. Brazer, 278 Neb. 508, 772 N.W.2d 545 (2009); Hogelin v. City
of Columbus, 274 Neb. 453, 741 N.W.2d 617 (2007).
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	915
Cite as 282 Neb. 908

appropriate here. On appeal from an equity action, an appellate
court tries factual questions de novo on the record and, as to
questions of both fact and law, is obligated to reach a conclu-
sion independent of the conclusion reached by the trial court.4
But when credible evidence is in conflict on material issues of
fact, we consider and may give weight to the fact the trial court
observed the witnesses and accepted one version of the facts
over another.5
[3] This appeal also presents issues regarding the meaning
of Nebraska statutes. Statutory interpretation is a question of
law, which an appellate court resolves independently of the
trial court.6
Iv. ANALYSIS
As a preliminary matter, we note that appellees have not
cross-appealed from the determinations of the district court that
(1) the Speed Break and Fast Break bonus games of Bankshot
are games of chance; (2) Bankshot when played in the Slow
mode is a game of chance; and (3) Bankshot, as configured
and programmed at the time of trial, is an illegal gambling
device. At oral argument, the parties agreed that the Bankshot
game has been reconfigured to remove those aspects which the
district court determined to be games of chance and that the
Fast mode of play has also been eliminated. Thus, the primary
issue in this appeal is a narrow one: whether the district court
properly found that Bankshot is not a game of chance when
played in Spin mode.
1. burden of proof is beyond
reAsonAble doubt
The district court determined that the State was required to
prove its claims for declaratory and injunctive relief beyond a
reasonable doubt. On appeal, the State contends that the district
4 Schauer v. Grooms, 280 Neb. 426, 786 N.W.2d 909 (2010). See Shoemaker
v. Shoemaker, 275 Neb. 112, 745 N.W.2d 299 (2008).
5 Schauer, supra note 4; Shoemaker, supra note 4.
6 State v. State Code Agencies Teachers Assn., 280 Neb. 459, 788 N.W.2d
238 (2010); Underhill v. Hobelman, 279 Neb. 30, 776 N.W.2d 786
(2009).
916 	282 NEBRASKA REPORTS

court should have applied the lesser preponderance of the evi-
dence burden.
To resolve this issue, we must view the State’s claim in its
proper legal context. Neb. Rev. Stat. § 28-1101(4) (Reissue
2008) provides that “[a] person engages in gambling if he or
she bets something of value upon the outcome of a future event,
which outcome is determined by an element of chance . . . .”
Section 28-1101(5) defines “[g]ambling device” to include
any 	device, 	machine, 	paraphernalia, 	writing, 	paper,
instrument, article, or equipment that is used or usable
for engaging in gambling, whether that activity consists
of gambling between persons or gambling by a person
involving the playing of a machine. Gambling device
shall also include any mechanical gaming device, com-
puter gaming device, electronic gaming device, or video
gaming device which has the capability of awarding
something of value, free games redeemable for some-
thing of value, instant-win tickets which also provide
the possibility of participating in a subsequent drawing
or event, or tickets or stubs redeemable for something of
value, except as authorized in the furtherance of parimu-
tuel wagering.
And § 28-1107(3) provides that possession of a “gambling
device” is a Class II misdemeanor. In its counterclaim, the
State alleged that Bankshot was an unlawful “gambling device”
as defined in § 28-1101(5). It further alleged that appel-
lees’ “involvement in developing, promoting, and distributing
Bankshot video gaming devices” violated Nebraska’s criminal
statutes prohibiting gambling.
It is thus clear that the State is claiming that appellees’
conduct was criminal. In two prior cases, Main Street Movies
v. Wellman7 and Tipp-It, Inc. v. Conboy,8 we decided declara-
tory judgment actions involving possible violations of crimi-
nal laws. In both cases, we determined that proof beyond a
reasonable doubt was required because (1) our review was as
a criminal case at law and (2) it would be inconsistent if the
7 Main Street Movies v. Wellman, 257 Neb. 559, 598 N.W.2d 754 (1999).
8 Tipp-It, Inc. v. Conboy, 257 Neb. 219, 596 N.W.2d 304 (1999).
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	917
Cite as 282 Neb. 908

standard of proof in a declaratory judgment action involving an
alleged criminal violation was less than the standard of proof
in a criminal prosecution.
The State contends that Main Street Movies and Tipp-It,
Inc. are distinguishable from the instant case because both
were brought pursuant to a specific authorizing statute and
both involved First Amendment issues. We consider these to
be distinctions without a difference. The statutes, Neb. Rev.
Stat § 28-801 et seq. (Reissue 1995), did not independently
authorize the actions in Main Street Movies and Tipp-It, Inc.,
but instead only modified the prerequisites necessary for bring-
ing an action under the declaratory judgment act when the
issue involved obscenity. Because the instant case also arises
under the declaratory judgment act, the same burden of proof
should apply.
Similarly, assuming without deciding that the instant case
does not involve a First Amendment issue, application of the
reasonable doubt burden of proof is not dependent upon the
existence of a fundamental First Amendment issue. This is
illustrated by our lack of any reference to the First Amendment
issue in Main Street Movies when articulating the appropriate
burden of proof.9 The critical factor in both Main Street Movies
and Tipp-It, Inc. was that the declaratory judgment sought to
answer whether a criminal statute had been violated. That is the
same issue presented in the instant case, and thus the district
court correctly required the State to prove the allegations of
criminal conduct beyond a reasonable doubt. To the extent that
we have suggested otherwise, those cases are disapproved.10
2. predominAnce of cHAnce is A pplicAble test
The primary issue in this appeal is the proper test for deter-
mining whether an activity constitutes a violation of Nebraska’s
9 Main Street Movies, supra note 7.
10 Baker’s Supermarkets v. State, 248 Neb. 984, 540 N.W.2d 574 (1995);
State ex rel. Spire v. Strawberries, Inc., 239 Neb. 1, 473 N.W.2d 428
(1991); State v. Two IGT Video Poker Games, 237 Neb. 145, 465 N.W.2d
453 (1991); Indoor Recreation Enterprises, Inc. v. Douglas, 194 Neb. 715,
235 N.W.2d 398 (1975); Baedaro v. Caldwell, 156 Neb. 489, 56 N.W.2d
706 (1953).
918 	282 NEBRASKA REPORTS

gambling statutes. According to our statutes, gambling occurs
when a person “bets something of value upon the outcome of
a future event, which outcome is determined by an element of
chance.”11 We are asked to interpret the meaning of the phrase
“outcome is determined by an element of chance.”
Some contextual and historical background is necessary.
Article III, § 24, of the Nebraska Constitution provides that
“the Legislature shall not authorize any game of chance.” And
prior to 1977, Nebraska defined a “gambling device” as one
which was “adapted, devised and designed for the purpose
of playing any game of chance for money or property.”12 In
Baedaro v. Caldwell,13 we held that the test for determining
whether a game violated the constitutional and statutory prohi-
bition against any game of chance was “not whether [the game]
contains an element of chance or an element of skill, but which
of these is the dominating element that determines the result
of the game.” Baedaro held that a five-ball pinball machine
capable of awarding free replays was a “game of chance” under
the Constitution and the statute, reasoning:
A game of chance is one in which the result as to suc-
cess or failure depends less on the skill and experience of
the player than on purely fortuitous or accidental circum-
stances incidental to the game or the manner of playing it
or the device or apparatus with which it is played, but not
under the control of the player.14
We applied the same “predominance” test when we decided
in Indoor Recreation Enterprises, Inc. v. Douglas15 that poker
and bridge were illegal games of chance under the pre-1977
statutes. Indoor Recreation Enterprises, Inc. reasoned that the
card games were games of chance because the players had no
control over which cards were dealt.
11 § 28-1101(4).
12 See Neb. Rev. Stat. § 28-945 (Reissue 1975).
13 Baedaro, supra note 10, 156 Neb. at 493, 56 N.W.2d at 709.
14 Id. at 494, 56 N.W.2d at 709.
15 Indoor Recreation Enterprises, Inc., supra note 10.
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	919
Cite as 282 Neb. 908

In 1977, the Nebraska Legislature amended the gambling
statutes. The “game of chance” language that tracked the con-
stitutional language was changed, and “gambling” was instead
defined as “stak[ing] or risk[ing] something of value upon the
outcome of a contest of chance or a future contingent event not
under [the person’s] control or influence, upon an agreement
or understanding that he or someone else will receive some-
thing of value in the event of a certain outcome.”16 “Contest of
chance” was defined as “any contest, game, gaming scheme,
or gaming device in which the outcome depends in a material
degree upon an element of chance, notwithstanding that skill
of the contestants may also be a factor therein.”17 The operative
date of these amendments was January 1, 1979.18 We did not
decide any cases addressing this statutory language during the
time it was in effect.
In 1979, the Legislature again amended the statutes relating
to gambling. In the course of these amendments, the definition
of “contest of chance” was eliminated.19 “[G]ambling” was
defined as “bet[ting] something of value upon the outcome of
a future event, which outcome is determined by an element of
chance, or upon the outcome of a game, contest, or election.”20
Other than a slight modification to the definition of gambling
device in 1984,21 the 1979 gambling statutes have remained
essentially unchanged.
Although we have decided gambling-based cases since the
1979 statutory amendments, we have not directly addressed
the proper interpretation of the statutory phrase “outcome is
determined by an element of chance.”22 The State contends that
16 1977 Neb. Laws, L.B. 38, § 217(4), codified at § 28-1101(4) (Cum. Supp.
1978).
17 Id., § 217(3), codified at § 28-1101(3) (Cum. Supp. 1978).
18 See Neb. Rev. Stat. §§ 28-1101 to 28-1113 (Cum. Supp. 1978).
19 1979 Neb. Laws, L.B. 152.
20 Id., § 1(4), codified at § 28-1101(4) (Reissue 1979).
21 See 1984 Neb. Laws, L.B. 744, § 1(5), codified at § 28-1101(5) (Cum.
Supp. 1984).
22 See, Strawberries, Inc., supra note 10; Two IGT Video Poker Games, supra
note 10; CONtact, Inc. v. State, 212 Neb. 584, 324 N.W.2d 804 (1982).
920 	282 NEBRASKA REPORTS

based on the history of amendments and the plain language of
the current statutes, gambling exists if something of value is
bet on the outcome of a future event and the determination of
that outcome involves any “element of chance.” Appellees con-
tend that the predominance test we announced in Baedaro still
applies because the current statutory language is functionally
equivalent to the language interpreted in Baedaro.
[4] This is an issue of statutory interpretation, and our analy-
sis is guided by well-established principles. Statutory language
is to be given its plain and ordinary meaning, and an appellate
court will not resort to interpretation to ascertain the meaning
of statutory words which are plain, direct, and unambiguous.23
The gambling statutes are penal statutes, and penal statutes are
to be strictly construed.24 Penal statutes are also to be given a
sensible construction in the context of the object sought to be
accomplished, the evils and mischiefs sought to be remedied,
and the purpose sought to be served.25 And an appellate court
will try to avoid a statutory construction which would lead to
an absurd result.26
Section 28-1101(4) (Reissue 2008) defines gambling as bet-
ting on an outcome that “is determined by an element of
chance.” The plain meaning of “determined” in this context is
that the actual outcome must be caused by an element of chance.
Because an outcome cannot be caused by a minor or insignifi-
cant thing, but, rather, is caused by a material or predominant
thing, the present statutory language, strictly construed, simply
and plainly asserts that an activity is gambling in Nebraska if
its outcome is predominantly caused by chance. Restated, the
present statutory language simply rewords the predominance
standard that has always been applied in Nebraska.
[5] This interpretation of § 28-1101(4) is consistent with
our prior interpretation of a similar statute. In CONtact, Inc. v.
23 State v. Lamb, 280 Neb. 738, 789 N.W.2d 918 (2010); State v. Lebeau, 280
Neb. 238, 784 N.W.2d 921 (2010).
24 See, State v. Fuller, 279 Neb. 568, 779 N.W.2d 112 (2010); State v.
Bossow, 274 Neb. 836, 744 N.W.2d 43 (2008).
25 Id.
26 State v. Hamilton, 277 Neb. 593, 763 N.W.2d 731 (2009).
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	921
Cite as 282 Neb. 908

State,27 we addressed language in a statute relating to lotteries
which required winning chances to be “‘determined by a draw-
ing or by some other method based on an element of chance.’”
We held that the predetermination of a winning ticket did not
negate the existence of chance, and noted that the statutory lan-
guage meant that the “predominate nature of the game, i.e., skill
or chance, determines its classification.”28 To conclude that the
same “determined” by “an element of chance” language used
in § 28-1101(4) means something other than the predominance
test would therefore be nonsensical. In addition, we note that
it is clear from the record that at the time Bankshot was under
development and being marketed and distributed in Nebraska,
at least some of the state agencies involved in this case under-
stood, and conveyed to appellees, that the predominance test
applied in Nebraska. We reaffirm our prior holdings that gam-
bling occurs in Nebraska when a bet is placed on an outcome
that is determined predominantly by chance.
3. bAnksHot is not GAmblinG in spin mode
The State contends that Bankshot when played in Spin mode
is gambling because its outcome is determined by chance. It
asserts two elements of the game in support of its position:
(1) the limited amount of time a player has to select a puzzle to
play and (2) the infrequent presentation of winning puzzles.
(a) Time to Select Puzzles
With respect to the time element, the State relies heavily on
the testimony of its expert witness, Kenneth Deffenbacher, a
cognitive psychologist and professor emeritus at the University
of Nebraska at Omaha. Deffenbacher’s testimony was based on
the puzzle display times programmed into the Bankshot soft-
ware through source codes. He experienced the Bankshot game
on one occasion, when he played approximately 40 puzzles at
an Omaha bar.
Deffenbacher testified that in Spin mode, Bankshot was
programmed so that the pool balls would stop spinning for a
27 CONtact, Inc., supra note 22, 212 Neb. at 586, 324 N.W.2d at 805.
28 Id. at 588, 324 N.W.2d at 806.
922 	282 NEBRASKA REPORTS

maximum of 296.5 milliseconds. He did no independent testing
to verify whether the actual display times corresponded with
the times in the software program. But he testified that in his
career, he had never seen a “big . . . discrepancy” between the
programmed times and actual display times.
Deffenbacher testified that for humans, the average reaction
time required to do a simple task is 247 milliseconds. He quali-
fied Bankshot as an intermediate task which would require 500
milliseconds for the average human to complete. Deffenbacher
conceded that roughly 21⁄2 percent of the population could do
an intermediate task in 367 milliseconds, but testified that if
the Spin mode display time was consistent with the 296.5 milli-
seconds source code program time, not even this percentage of
the human population would be able to choose which puzzle
they wished to play.
Deffenbacher testified that when he played Bankshot in
Spin mode, he was unable to stop the Bankshot puzzle before
it started spinning again. But on cross-examination, he con-
ceded that he had played the game incorrectly. Specifically,
he had tried to find two balls with the same number that were
adjacent to each other during his game play. He did not realize
when he played the game that the numbers on the pool balls
corresponded to colors and that the object of the game was to
identify balls of the same color that would appear in the same
three-by-three grid if the puzzle were chosen. Deffenbacher
also testified that he was trying to recognize the actual solu-
tion to the puzzle while he was deciding whether to choose
that puzzle.
Fox, Bankshot’s developer, testified that numbers used in
software program source codes do not always correspond to
actual display times in a game. He explained this was due to
interactions between the computer software itself and to inter-
actions between the software and the hardware. Christopher
Shawn Green, who has postdoctoral experience in psychol-
ogy and is an expert in the field of video gaming, also testi-
fied to this effect. Green took scientific measurements of the
Bankshot display and determined that the source code times
in the program did not correlate with the actual display times
in the game. Instead, Green calculated that when Bankshot
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	923
Cite as 282 Neb. 908

was played in Spin mode, the balls actually stopped spinning
for 500 milliseconds, not the 296.5 milliseconds programmed
into the source codes. Green testified that 500 milliseconds
is enough time for a human to have visual recognition and to
press a button and that in his opinion, a normal adult playing
Bankshot in Spin mode could stop on the puzzle he or she
chose. To support his opinion, Green conducted testing on the
Bankshot game and found that his subjects when directed to
select a puzzle of a specific color were able to do so 80 percent
of the time. Green’s subjects attempted to find only maroon,
green, and orange puzzles.
The district court did not make a factual finding as to how
long the balls actually paused in Spin mode. It did find, how-
ever, that the puzzles were not presented so fast that a player
could not exercise skill in the selection of the puzzle to be
played. In doing so, it noted that Deffenbacher’s testimony was
“compartmentalized” due to his misunderstanding of how to
play Bankshot.
Because this is an equity action, we review the facts de
novo.29 But when credible evidence is in conflict on material
issues of fact, we consider and may give weight to the fact the
trial court observed the witnesses and accepted one version of
the facts over another.30 We agree with the district court’s find-
ing that Deffenbacher’s testimony was compartmentalized. We
further find that the puzzles in Spin mode stop spinning for
approximately 500 milliseconds and that this is sufficient time
for an average human to select the puzzle he or she wishes to
play. The selection of the puzzle is thus determined by player
skill, not by chance.
(b) Infrequency of Winning Puzzles
The State also contends Bankshot is determined by chance
because of the infrequent presentation of winning puzzles.
“Winning” in this context means a puzzle that pays the player
more credits than the player puts at risk. It is undisputed that
every Bankshot puzzle is capable of being solved. But it also is
29 Schauer, supra note 4; Shoemaker, supra note 4.
30 Id.
924 	282 NEBRASKA REPORTS

undisputed that it is difficult to win more than the credits risked
to play a puzzle, at least partly because of the infrequency of
winning puzzles. Of the 10,325 puzzles in Table A, 1,187 pay
more than the credits put at risk on the puzzle. That number is
155 in Table B and 12 in Table C.
The odds of coming away with more money than a player
risks on a puzzle are remote, particularly considering that if the
first puzzle (from Table A) is not chosen, the next comes from
Table B, and if that is not chosen, all succeeding puzzles come
from Table C, until one is chosen and the cycle repeats. To be
successful at Bankshot, assuming success is defined as making
money, a player must exert considerable patience while wait-
ing for the “winning” puzzles to appear. Nevertheless, in Spin
mode, Bankshot is more controlled by the player than not, and
thus is predominantly a game of skill. Accordingly, Bankshot
when played in Spin mode is not gambling.
4. inJunction properly denied
[6] An injunction will not lie unless the right is clear, the
damage is irreparable, and the remedy at law is inadequate.31
The parties conceded at oral argument that the Bankshot game
has been reconfigured to comply with the terms of the district
court’s order, which persuades us that injunctive relief com-
pletely banning the development and distribution of Bankshot
in any form was not warranted. We conclude that Bankshot, as
currently configured to allow play in only Spin mode, is not
a game of chance. The court did not err in denying injunc-
tive relief.
vI. CONCLUSION
For the foregoing reasons, the decision of the district court
is affirmed.
A ffirmed.
WriGHt, J., not participating in the decision.
31 Strawberries, Inc., supra note 10.
AMERICAN AMUSEMENTS CO. v. NEBRASKA DEPT. OF REv. 	925
Cite as 282 Neb. 908