DAN MORALES 

ATTORNEY GENERAL 

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November 27.1991 

Ms. Jeannene Fox Opinion No. DM-62 

Acting Administrator 

Texas Alcoholic Beverage Commission Re: Collection of fees for small stakes 

P. 0. Box 13127 bingo (RQ-219) 

Austin, Texas 787113127 

Dear Ms. Fox: 

You have requested our opinion on several questions regarding the 

collection of fees for certain games of small stakes bingo. You indicate that 

[i]n addition to bingo games played on hard cards and 

disposable paper cards, bingo players also play instant 

bingo. . . . Most of the winners on instant bingo cards are S.50 

or $1.00 winners. 

Bingo is regulated by article 179d. V.T.C.S. A recent legislative enactment added 

section 19b to the statute to provide for the imposition of fees on bingo games. That 

provision states: 

Sec. 19b. (a) An authorized organization licensed to conduct 

bingo shall collect a fee from each person who wins a prize in a 

bingo game. 

(b) The fee imposed by this section is three percent 

of the amount or value of the prize. 

(c) A licensed authorized organization shah .report 

and remit the fee imposed by this section at the same time and 

in the same manner as the gross receipts tax under Section 20 of 

this Act. 

Acts lk1,72d Leg., 1st C.S., ch. 5,s 11.031, Vernon’s Sess. Law Serv. at 184. 

p. 312 
Ms. Jeannene Fox - Page 2 (DM-62) 

You first ask whether “instant bingo” constitutes a bingo game for purposes 

of article 179d. “Bingo” or “game” is defined in section 2(2) thereof as 

a specitic game of chance, commonly known as bingo or lotto, in 

which prizes are awarded on the basis of designated numbers or 

symbols on a card conforming to munbers or symbols selected at 

random. 

Whether a particular game described as “instant bingo” f&Us within the definition in 

section 2(2) requires the resolution of factual &es that cannot be addressed in the 

opinion process.1 We need not address any specific game, however, since the 

question you raise about taxes is relevant to any bingo game with small stakes. 

You also ask whether the Alcoholic Beverage Commission may wai\re the fee 

on bingo prizes of $1.00 or less. You state that organizations that conduct small 

stakes games complain that the cost of hiring additional workers to collect the fee 

from small stakes bingo winners would be in excess of what it would cost the 

organizations to pay the prize fee themselves and would bring the state a very small 

amount of revenue. 

A number of prior opinions hold that a waiver of fees that an administrative 

body is required to collect constitutes a suspension of laws, in contravention of 

article I, section 28, of the Texas Constitution. In Attorney General Opinion O4631 (1942), for example, the State Board of Hairdressers and Cosmetologists 

sought to waive the required payment of license renewal fees for those individuals 

who were called into military service. In Attorney General Opinion O-6444 (1945), 

the State Board of Barber Examiners asked whether it might exempt registered 

barbers from payment of renewal fees during their tenure in the armed forces. In 

Attorney General Opinion O-6754 (1946), a county clerk sought permission to waive 

the $1.00 marriage license fee for members of the armed forces. In each case, the 

attorney, general replied that the official was without authority to waive the 

particular fee because of article I, section 28. Likewise, we are here compelled to 

conclude, regardless of the amount of revenue obtained from the imposition of fees 

‘A resolution of this qucstioo would also rquire UJ to explore the meaning of “bingo” as that 

term was udersmod by the voters at the time of the adoption of the provision of article 19 section 47, 

of the nzcmstitution authorizing biio games. 

p. 313 
Ms. Jeamrene Fox - Page 3 (DM-62) 

on winnings in games of bingo, that the Alcoholic Beverage Commission is not 

empowered to waive or exempt the fee imposed on any prize. 

&ally, you ask whether the organization that conducts the bingo game may 

itself pay the fee. The answer to this question, theoretically, is “no,” as the following 

example will demonstrate. Suppose a bingo player wins $100.00. The statute 

assess& the fee on the rotalprire, and, if the organization paid the fee on $100.00, 

the total prixe would be $103.00, thus necessitating the collection of an additional 9 

cents. In other words, when the fee is paid by the organization, the amount of the 

fee must be added to the value of the prize, which, in turn, generates an additional 

fee to be paid. However, for small prizes, such as those about which you inquire, 

this problem is avoided. We use as an example a bingo prize worth 50 cents. The 

total value of such a prize could be transformed into a prize of 52 cents without 

generating any additional fee. In this example, the winner receives 50 cents and the 

state 2 cents. Likewise, a prize of one dollar could be transformed into a prize of 

$1.03, with $1.00 going to the individual and 3 cents to the state. This procedure 

works with small amounts because the fee on prizes of 50 cents is the same as the 

fee on prizes of 52 cents, and the fee imposed on prizes of $1.00 is the same as the 

fee imposed on prizes of $1.03. Thus, adding the fee to the amount paid to the 

winner does not increase the amount of fee owed on the rotalprire. With sufficiently 

large prizes, however, the principle breaks downl Thus, in answer to your third 

question, it is our opinion that while the organization may not itself literally pay the 

fee on prizes of 50 cents and $1.00, it may slightly alter the amount of the prizes 

awarded to achieve substantially the same result. 

SUMMARY 

The Alcoholic Beverage Commission may not waive the 

three percent fee for small prizes awarded in games of bingo. 

Although the organization conducting the bingo game may not 

itself pay the fee, it may achieve substantially the same result for 

%‘ith a three percent fee, the principle breaks down at a point behveen $5.00 and S6.00. The 

fcconaSSM)prizcisthesameasafeeonaprizeof~.15,butthefeeona56.00prizcisnotthesame 

a6afcconaprizcofS6.18. 

p. 314 
Ms. Jeannene Fox - Page 4 (DM-62) 

small prizes by slightly altering the face amount of the prize 

awarded. 

DAN MORALES 

Attorney General of Texas 

WILL PRYOR 

First Assistant Attorney General 

MARY KELLER 

Deputy Assistant Attorney General 

JUDGE ZOIUE STEAKLEY (Ret) 

Special Assistant Attorney General 

RENEAHICKS 

Special Assistant Attorney General 

MADELEINE B. JOHNSON 

Chair, Opinion Committee 

Prepared by Rick Gilpin 

Assistant Attorney General 

p. 315