Untitled Texas Attorney General Opinion

THEAYTORNEY GENERAL
OFTEXAS
Mr. A. G. Mueller Opinion No. WW-355
County Attorney
Llano county Re: Whether a drawing for prizes
Llano, Texas constitutes a lottery where
some of the irrkrt:: ?ZF given
with ;,ur~ ha;e of merchandise
and 5ome of the tick~ct: are
Dear Mr. Mueller: &:ttn avfay Irvt.
6.
. . .
“‘I‘hc nlerchants distribute the tickets to persons
who visit their establishments, whether or not they pur-
chnse wcr& llandise. Should merchandise be purchased,
the cuctonler I: given a ticket for each $1.00 in value so
purchaced, mrrely as a matter of limiting the number of
tickets to a cuFn.omer. If the customer desires to make
no purchases, hc, will be given, upon request, as many
tickets a~ lbe ~?csires, absolutely free.
“tat.11 S.129
Tex. 40, 100 S.W.2d 695, said:
“The State Penal Code does not define a lottery,
but our courts have interpreted it in accordance with pub-
lic usage, to mean a scheme or plan which provides for a
Mr. A. G. Mueller, page 3 (WW-355)
In this case the plan clearly contains two of the elements
of a lottery, to wit, “a prize” and distribution by “chance”, and the only
question is whether the plan contains the third element, that is, payment
of ‘*a consideration for the right to participate.” We think that under the
facts you have submitted in this case there was a payment of a consider-
ation for the right to participate in the plan for the distribution of the
prizes by chance; and, therefore, the plan is a lottery.
The facts given show that the merchants who participated
in the plan gave for each one-dollar’s worth of merchandise purchased a
tick,et, constituting a chance on the drawing; and also some tickets were
given away free to customers, who apparently came in the store and who
made no purchases. There was *a consi~deration pai.d” to participate, be-
cause in return for giv~ing out the chances in the form of the tickets and
the giving away of the prizes the merchants received the good will and
patronage of the persons favored with the tickets. All of the persons re-
ceiving tick~ets c3me into the store and the merchant thereby had an op-
portunity to display his merchandise. It is a fundamental rule of mer-
chandising that the first step in selling is to bring customers to where
the merchandise is on display. Merchants pay money for advertising
merely to get customers in their place of business, because if customers
come into the place a part of them usually buy. The fact that the cus-
tomer went to the merchant’s place of business was of value to the mer-
chant, and constituted a consideration. This point is illustrated in the
case of Smith v. State, 136 Tex. Cr. R. 611, 127 S.W.2d 297, in which the
defendant was convicted of operating a lottery, the facts being that cards
were issued by merchants and a drawing held in a theatre, and although
most of the card holders had bought merchandise in order to obtain cards
and participate some had not paid anything. The Court held the plan was
a lottery, and on motion for rehearing it was said:
Ir . . . It is obvious that the dealer, merchant or
business establishment not contributing to the prize, did
not receive any card or stamp for distribution. Conse-
quently, parties desiring to secure a chance at the prize
would necessarily have to go to such merchant or business
establishment as had contributed to the general fund. As
a result, the good will and patronage of the person favored
with the cards is secured. This patronage, whatever it may
be, is given in exchange for cards and stamps, which is an
Mr. A. G. Mueller, page 4 (WW-355)
indirect benefit to the operator of the :;cheme, znd ens-
ables hrm to conti,nue his game of chance. It ic. 2 b:l!~,i.
handed out to the gullible as an inducement to become
customers of the dealers or me,rch:>nts ewbscribi,ng to
the plan.”
A similar holding was made nn the c3se of Featherstone
v. Independent Service Station Ass’n, (Ct.Civ.App.j 10 S.W.Zd 124, in
which theourt said:
u . * I While dealers, under the new plan, dis-
tributed t,xkets to noncustomers as well as to customers,
it seems that the scheme was to distribute tickets, in the
main to customers, as the evidence discloses that only a
few, negligible in number, were given to persons other
than customers. That the giving of tlck.ets, and the draw-
ings :3nd distribution of prizes, were inducements to pa-
tronage and unquestionably lured customers, IS shown
from the very satisfactory business results that, followed.
Patronage thus induced was the consideration that passed
from thei ticket holder for the chance received, in that the
price pnid. whatr,?er it was, the amount being knm;ikrial,
constituted thr aggregate price for the merchandise or se’r-
vice and the ticket that represented a chance to win the
prize; in othtr words, for one undivided price both were
purchased, the merchandise, or service, and ticket, the
ticket being as much bought as though priced separately.
State v. Danz, 140 Wash. 546, 250 P. 37, and annotations
48 A.L.R. 1109, 1122. We are of the opinion, therefore,
that the court did not err in concluding that the facts con-
stituted d lottery within the meaning of the law.” (Em-
phasis ours)
Another reason why there was “a consideration paid” in
this case 1s thst we must look at the whole plan or scheme and if the per-
son or persons who give the prizes, that are distributed by chance, re-
ceive a consideration, it makes no difference that such consideration is
paid by only a part of the participants. This reasoning was recognized
by the Supreme Court of Texas in the case of City of Wink v. Griffith
Amusement Co,, supra, in which the Court said:
641 . . We are unable to see in what manner the
giving of free registration numbers to those outside of
Mr. A. G. Mueller, page 5 (WW-355)
the theater would change the l.egal effect of what was
done inside the theater, for which a charge was made;
nor does the fact that a claimant’s right ta the prize
was evidenced by a registration book instead of a tick-
et, as is usual in lotteries, change the legal result.
The registration numbers represented ‘chances’ at the
prize just as effectively as would tickets to the draw-
ing . ” (Emphasis by the Court)
The Court of Criminal Appeals of Texas approved this reasoning in the
case of Cole v. State, 133 Tex. Crim. 548, 112 S,W.2d 725, in which it
said:
61 .
.They paid a valuable
. . consideration to
participate. The fact that they paid the same prince
c.harged on other nights when the theater was running
a more popular play without an added attraction is not
conclusive or controlling in favor of the appel,lants. A
valuable consideration was paid. What did the purchas-
er get? Not simply a ticket for the screen show, but a
ticket to that, and to the chance drawing. The appellants
and their patrons so understood and intended it. That
was the plan and purpose for which the consideration was
paid. Nor is the fact that free tickets were offered to
outsiders material in any controlling sense. None such
were given out as a matter of fact and, if there had been,
it would not of itself have made any difference. If in the
flourishmg days of the Louisiana lottery its management
had advertised that it would give a free ticket to the presi-
dent of every bank in the city of New Orleans, that would
not have changed the scheme from a lottery, whether or
not any one or all of such free tickets were accepted.’
(Emphasis ours)
L.. . .
“In &rt, we think it does not materially affect the
scheme that there be a possibility that some one might get
a prize who had not paid for a ticket. . . .”
Although some jurisdictions hold to the contrary, we be-
lieve a majority of the States follow the rule stated in the case of Cole
v. State, supra, and which is well expressed in the case of McFadden v.
Bain, 126 Ore. 250, 91 P.2d 292, in which the Supreme Court of Oregon
said:
Mr. A. G. Mueller, page 6 (WW-355)
“To constitute a lottery, it is not necessary for
all participants to pay for their chances, but it is suffi-
cient if some do, though many do not pay a valuable con-
sideration. The l,egal effect of the transaction is not
changed by the fact that some do not pay. If it is a lot-
tery as to those who do pay, it necessarily is a lottery
as to those who do not pay for their chances.”
Other tames to the same effect are Commonwealth v. Wall, 295 Mass.
70, 3 N.E.2d 28; Glover V. Malloska, 238 Mich.216, 213 N.W. 107, 52
A.L.R. 77; Iris Amusement Corporation v. Kelly, 366 Ill. 256, 8 N.E.2d
648; and State v. Omaha Motion Picture Exhibitors Ass’*, 139 Neb. 312,
297 N.W. 547.
We are advised that those who contend that this plan is
legal rely on the c15e of Brice v. State, 156 Tex. Crim. 372, 242 S.W.2d
433, in which the Court held that a certain scheme for giving away prizes
at a ticket drawing was not a lottery. We think that case is distinguish-
able by the fact that the State failed to show payment of a consideration
in that it did not show that any money was paid for any of the tickets and
did not show that the participants were prospective customers who went
into the place of business. The correctness of the holding in the case of
Cole v. State, supra, was recognized by the Court in the Brice case in
language as follows:
“As we construe the Cole case, affirmance was
based upon the holding that the scheme called ‘Bank
Nite’ was but a subterfuge; that it was the purpose and
plan of the accused to increase the patronage of his show;
that the cost of the ticket constituted a consideration also
for the chance, and the fact that others might get chances
at the drawing without consideration did not materiaily af-
fect such scheme.‘” (Emphasis ours)
We think it appropriate to conclude this opinion in the
words of the Court in the case of Hoffman v. State, (Ct.Civ.App.) 219
S.W.2d 539. as follows
,a
. Our Constitutional
. . provision against lot-
teries ‘or other evasions involving the lottery principle’
(Sec. 47, Art. 3) is strongly worded, the same or similar
language appearing in all preceding Constitutions; being
uniformly construed ‘with a view to remedying the mis-
A.. _-
Mr. A. G. Mueller, page 7 (WW-355)
chief intended to be prevented, and to suppress all eva-
sions for the continuance of the mischief.’ 54 C. J. S.,
Lotteries, g 19, p. 862. ‘Where the question presented
is one of enforcing criminal responsibility, or of refus-
ing to aid in a transaction alleged to be within the statu-
tory prohibition, the courts will ordinarily construe lib-
erally the provisions relating to lotteries so as to include
all schemes which appeal to the gambling propensities of
men. * State ex rel. Beck V. Fox Kansas Theatre Co., 144
Kan. 687 62 P.2d 929, 933, 109A.L.R. 698.
“Man’s ingenuity has been fertile in the inven-
tion of schemes and devices for the purpose of satisfy-
ing at least the letter of these enactments (Const. sec.
47, Art. 3; Art. 654, Penal Code). But considering the
liberal construction heretofore accorded to them, and,
in slight paraphrase of the oft-quoted statement from
Long V. State, 74 Md. 565, 22 A.4, 12 L.R.A.425, 28 Am.
St.Rep. 268, we venture the following assertion. That
we believe it almost impossible for the most ingenious
and subtle mind to devise any scheme or plan, short of
a gratuitous distribution of his own property, that will
not be held by the courts of this State as in violation of
the foregoing statute.” (Emphasis by the Court)
SUMMARY
A plan by which a group of merchants in a town
give away numbered tickets, giving a ticket for each one-
dollar’s worth of merchandise purchased, and also giving
some tickets free to customers who do not make purchases,
and the stubs of such tickets from all of said merchants
are deposited by the recipients in a receptacle, and a draw-
ing held at one central place in the town at a certain time,
and the holders of the ticket halving the number drawn given
a prize, constitutes a lottery in violation of Section 47, Ar-
ticle III. Constitution of Texas, and Article 654, Penal Code
Mr. A. G. Mueller, page 8 (WW-355)
of Texas, even though some of the ticket holders re-
ceived their tickets free.
APPROVED: Yours very truly,
OPINION COMMITTEE :
WILL WILSON
George P. Blackburn, Attorney General of Texas
Chairman ,:, ,, . ,_..L..~.
;/ :I,,~, ,,f
Jack Goodman BY
Mark McLaughlin Cecil C. Rotsch
Ralph R. Rash Assistant
Reviewed for the Attorney General
By: W. V. GEPPERT