Title: Video Consultants of Nebraska v. Douglas

State: nebraska

Issuer: Nebraska Supreme Court

Document:

367 N.W.2d 697 (1985) 219 Neb. 868 VIDEO CONSULTANTS OF NEBRASKA, INC., a Nebraska Corporation, Appellee, v. Paul L. DOUGLAS, Attorney General, State of Nebraska, and Donald Knowles, County Attorney, County of Douglas, Nebraska, Appellants, IGT Nebraska, Inc., a Nebraska corporation, and City of Bellevue, Nebraska, a Municipal Corporation, Intervenors-Appellees. No. 84-092. Supreme Court of Nebraska. May 10, 1985. *698 Paul L. Douglas, Atty. Gen., and Mel Kammerlohr, Asst. Atty. Gen., and Donald L. Knowles, Douglas County Atty., for appellants. Warren S. Zweiback and Richard A. DeWitt of Zweiback, Kasher, Flaherty & DeWitt, P.C., Omaha, for appellee. William R. Johnson of Kennedy, Holland, DeLacy & Svoboda, Omaha, for intervenor-appellee IGT Nebraska. John E. Rice, Bellevue, for intervenor-appellee city of Bellevue. KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ. PER CURIAM. Raised in this case is the question whether an electronic gaming machine, such as a video computer, is a form of lottery permitted under statutes enacted by the Nebraska Legislature in 1983 relative to gambling. At the outset we note that the Legislature, in 1984, amended the statute defining "lottery" and specified devices which do not qualify as a "lottery." The 1984 amendment states: "Lottery shall not include any gambling scheme which uses any mechanical gaming device, computer gaming device, electronic gaming device, or video gaming device which has the capability of awarding monetary prizes, free games redeemable for monetary prizes, or tickets or stubs redeemable for monetary prizes." Neb.Rev.Stat. § 28-1101(6) (Cum.Supp. 1984). Nevertheless, because activities have likely occurred involving the 1983 statutes, and liabilities, civil or criminal, may be unresolved due to the uncertainty concerning the legality of activities under the questioned statutes, we are compelled to dispose of the question raised. Video Consultants of Nebraska, Inc., and IGT Nebraska, Inc., supply video lottery equipment, consultation, and services to nonprofit organizations and political subdivisions authorized to operate lotteries. See Neb.Rev.Stat. §§ 28-1115 to 28-1116.01 (Supp.1983). The city of Bellevue (Bellevue) is a municipal corporation whose electors have authorized that city to operate a lottery. See § 28-1116. Defendants in this case are the Attorney General of the State of Nebraska and the Douglas County attorney (hereinafter called the "State"), who are charged with enforcing the Nebraska laws prohibiting gambling. Video Consultants and IGT entered contracts with Bellevue to provide video lottery equipment, consultation, and services in conducting a lottery. In a November 7, 1983, letter to the mayor of Bellevue, the Attorney General stated that the video lottery conducted by Bellevue violated Nebraska's gambling laws, and directed Bellevue to cease operation of its video lottery. According to the Attorney General's letter, failure to remove the video lottery would result in proceedings commenced by the State for an injunction prohibiting Bellevue's further operation of a video lottery. Video Consultants filed a petition in the district court for Douglas County, seeking a permanent injunction to prevent the State from interfering with operation of video lotteries in Bellevue and asking the district court to declare video lotteries permissible under Nebraska law. IGT and Bellevue filed petitions to intervene and requested relief substantially similar to that requested by Video Consultants. For the purpose of trial the State stipulated with Video Consultants and IGT regarding a video lottery. *699 Video Consultants and the State stipulated: IGT and the State stipulated: (e) The game's random program does not involve any player skill, and will, on *700 average, return approximately 85 percent of the dollar amount played in the form of various size prizes.... On January 16, 1984, the district court held the challenged video lotteries of Video Consultants, IGT, and Bellevue were "lawful and legal conduct of a lottery under the provisions of Neb.Rev.Stat. Sec. 28-1115, 28-1116 and 28-1116.01 (Supp.1983)." A series of interrelated gambling statutes applicable to the issue in this case are set forth in pertinent part: § 28-1101 (Supp.1983). § 28-1116. § 28-1116.01. In CONtact, Inc. v. State, 212 Neb. 584, 324 N.W.2d 804 (1982), this court held that a lottery is a game of chance in which the winner is determined by mere luck, not by skill, and acknowledged the three elements prescribed by statute for a lotteryconsideration, a prize, and chance. See § 28-1101(6). On appeal the State concedes that the activity produced by the video gaming device is a lottery, but presents two arguments to advance the contention that the video and computerized activity is illegal. First, the State contends a video or electronic machine is a gambling device, because the machine does not qualify for the statutory exemption describing nongambling devices in § 28-1101(5). Second, sale of a ticket used in the "playing phase" of a lottery is indispensable to a statutorily permissible lottery, but the ticket involved in the present case is actually a receipt for or evidence of winning a lottery. Therefore, in the absence of a purchased ticket as a basis for the element of "chance" essential to a lottery, there is no lottery authorized by statute. The real question before us is one of statutory construction. In CONtact, Inc. v. State, supra, we held that sale of pickle cards by a nonprofit organization was a permissible lottery and stated: "Generally, statutory language will be given its plain and ordinary meaning and a statute is open to construction only if it is ambiguous." Id. at 587, 324 N.W.2d at 806. The State contends that the exemptive phrase "other items," as used in § 28-1101(5), refers to objects having the essential characteristics of tickets or cards used for a lottery, or which are associated with *701 tickets and cards as paraphernalia used to conduct or participate in a lottery, for example, a tumbler or box where tickets are mixed before selection through chance. Obviously, video and electronic machines are being used in production of a lottery. In its regulation of gambling, had the Legislature intended to exclude a machine, especially an electronic or video gaming device, as an object proscribed in a permissible lottery, such exclusion was not an impossible statutory feat. Yet, the Legislature employed unrestrictive, generic terms in describing the means to conduct a permissible lottery so that any article or any method was available in the "playing phase" of a legal lottery. This court cannot now insert into the statute an exclusion or restriction which the Legislature might have included when enacting § 28-1101(5) and (6) in 1983. We cannot assume that the Legislature intended to exclude electronic gaming devices from "other items used in the playing phases" of a lottery authorized by statute. As expressed in State ex rel. Douglas v. Herrington, 206 Neb. 516, 523, 294 N.W.2d 330, 334 (1980): See, also, Wendt v. Cavalier Ins. Corp., 197 Neb. 622, 250 N.W.2d 243 (1977). We conclude that the electronic gaming devices involved in this case are not "gambling devices" as such phrase and description are used in § 28-1101(5). Regarding the State's contention that a ticket or card must be included as an indispensable part of a lottery, in CONtact, Inc. v. State, supra, we cited and quoted with approval the language of Forte v. United States, 83 F.2d 612, 615 (D.C.Cir.1936): "One of the essential elements of a lottery is the awarding of a prize by chance, but the exact method adopted for the application of chance to the distribution of prizes is immaterial." This court cannot rewrite § 28-1101(5) and (6)(b), as well as § 28-1116, to the effect that "winning chances are to be determined by drawing a purchased ticket as the only basis for the element of chance." Purchase of a ticket is not the only means of participating in a lottery otherwise permissible under Nebraska's gambling statutes. AFFIRMED.