THE ATI-OKNEY GENERAL 

OP TEXAS 

Au- 11. TExAm 

June 7, 1947 

Honorable J. G. Anderson 

County Attorney 

Freestone County 

Fairfield, Texas 

Opinion No. v-238 

Re: Are the lottery laws of Texas 

violated under a cooperative 

advertising plan known as 

"bonanza" 

Dear Mr. Anderson: 

Your request for ‘an opinion as ,to whether or not the 

plan referred to as "bonanza" and outlined, in'your letter constitutes a lottery has been carefully considered. You have submitted the rules, regulations, and Instructions under~which this 

advertising plan operates,,and the plan as a nhole has been reVieWed. Due to the length of the various enclosures, It is impossible to set them out in their entlrety,~ butthey are returned herewith in accordance with your request.. 

"Bonanza" is a program designed for use by motion pfcture theatres or radio stations In cooperation andln conjunction 

with a group of business firms. The object,.of the plan Is the 

stimulation of bus1nes.s which is ac,compllshed bg~creating an lncentlve for the public to patronlze,the firms of the,partl.cFpants. 

The business firms contributes to, a fund known as then bonanza award 

fund, and,dlstrlbute to the public and to thelrpatrons,'~ coupons 

entitling them to participate in a drawing held.weekly in which 

a portion of the bonanze'fund is awarded to certain c,oupon holders. 

The coupons are punched or otherwise marked ,ln accordance with a 

schedule of values , and the greater the amount of,the~:Durchase, 

the greater the value of the ccupan. These coupons entitle the' 

holder, upon qualifying, to a portion of the bonanza award fund 

varying from l/20 to l/2 of the fund, depending upon the amount 

punched upon the coupon at the time of purchase. The plan further provides that one question to be known as the initial skill 

question mst be answered true or false on the back of the coupon 

in order for the contestant to~quallfy. In other words, the person becomes eligible to,receive a cash prize upon his coupon being 

drawn and upon the true false question on the reserve side being 

answered correctly. After thus qualifying, the contestant is 

asked to answer from one to ten questions, the number' of questions asked depending upon the valu'e ofthe coupon. In other 

words, if the coupon entitles, him to l/20 of the total amount in 

the bonanza award fund, he is asked to answer one questton and 

the number of questions is increased dependent upon the value of 
Honorable J. G. Anderson, page 2, v-238 

the coupon to a maximum of ten questions, which are asked of the 

contestant holding a coupon entitling him to l/2 of the emtint In 

the bonanza award fund. These letter questions ere known es the 

final skill questions end ere to be distinguished from the single 

true-false question answered on the'reverse side of the coupon, 

which is designated quellfylng skill questlon. In order for the 

contestants to famlllerize themselves with the group of questions 

from which will be chosen the final question or questions es the 

case may be, these questioris may be broedcest, posted near the' 

coupon deposit' boxes, or tiiled. The plan further provides thet 

a contestant may elect to answer questlons from such category es 

he or she chooses to select, end the plan provides that all questlons will be made available In plb1i.c places fop persons to read 

and study. The plan contains the further stipulation that a free 

doupon ~111 be given any quellfled adult person wtthout conslderetion of purchase oFpatronage when e request for the coupon 1s 

made of the heed of e firm giving them. 

In the pest, this department haa been called upon on 

numerous occasions to render oplnlons es to the validity of verlous advertising end promotional plans. However, e review of 

theae opinions shows that none of them were written on e fact "' 

situation similar to the one presented In your request. After a 

consideration of the plan known ea "bonanza", we believe that two 

questicms are involved in determining whether or not this scheti 

,Fs a lottery. The first question is whether of not the fact that 

e personupon request may receive a free coupon would remove the 

element of conslderetion from this plan thereby depriving it of 

one of the three essential elements of a lottery. The second question presented Is whether sfter a conslderetion of all the facts 

the plan involves the element of chance. 

Article 654 of the Penal Code provides: 

"S any person shell establish a lottery or 

dispose of.eny estate, reel or' personal, by lottery, 

he shall be fined not less than one hundred nor more 

than one thousand dollars; or If any person&all 

sell, offer for sale or keep for sale any ticket or 

part ticket in any lottery, he shell be fited not 

less tfaga ten nor more than fifty dollars. 

In 28 Texas Jurisprudence 409, 410, we find the following 

definition of lottery: 

"'lbe term lottery has no technical slgnlflcetlcm In the law, end since our statute does not 

prwide a definition, Its meaning mast be determined from popular usage. According to that test 

a lottsey Is a scheme for the distribution of prizes 
Honorable J. G. Anderson, page 3, v-238 

by lot or chance among those who have paid or 

agreed to Pay a consideration for the right to 

participate therein, or the distribution itself." 

A slmllar definition to the one above eppeers in 34 

American Jurisprudence 647, 648, end in addition, this language 

Is also found: 

"As appears from the foregoing definitions, 

the three essential elements of a lottery are: 

(1) conslderetlon; (2) prize; and, (3) chance. 

In order to comprise e lottery, these three elements or ingredients must be present; . . . . .' 

After a reading of the above definitions, It 

appears thet the element of prize Is present in the 

plan known es "bonanza". However, the elements of 

consideration and chance are not so clearly present, 

and It Is necessary to determine whether or not 

these elements are contained in the plan before us. 

The first question is whether or not the element of consideration Is present In this plan. It hes been settled by the " 

Texas Courts that the element of conslderetlon is present under e 

plan whereby coupons for a drawing are given with purchases of merchendlse. In support of this proposition, we cite the following 

language from Featherstone v. Independent Service Statlon Assocletlon of Texas, 10 S.W. (2d) 124: 

"Patronage thus Induced was the consideration 

that passed from the ticket holder for the chance 

received, in that the price paid, whatever it was, 

the amount being immaterial, conatiututed && 

aggregate price for the merchendlse m service 

end the ticket I&& revresented'& chance to win 

the prize; In other woraa, for, one undivided price 

both were purchased, the merchandise, or service, 

end ticket, the ticket being es nmch bought as 

though priced separately." (Emphasis added) 

The Instructions state that a free coupon will be given 

any qualified adult person without consideration of purchase or 

patronage when requested from the heed of e firm glvlng coupons. 

In this connection, we should like to cite the case of 

City of Wink v. Griffith Amsement Company, decided b the Supreme 

Court of Texas, In 1936, and reported In 100 S.W. (2d 7 6%. This 

cese was a "bank night" cese, and persons were allowed to reglster for the drawing without buying e theetre ticket. Judge Cureton, 

speakFng for the Court, used this language : 
Honorable J. 0. Anderson, page 4, V-238 

"The actual money returns on 'bank night' 

would suggest that if any free numbers were ever 

distributed, they were negligible. We gather 

from the whole testimony that the so-celled 'free 

numbers' feature was largely one that existed in 

the minds of those who operated, the t.heatre, and 

that it was never made a real active part of the 

'bank night' plan. True, no doubt if anyone had 

applied for a free registration to the drewFng, 

It would have been gFven, but human nature is such 

that the average person would seldom, If at all, 

suffer the natural embarrassment of asking for e 

free registration. Indeed, if this were not so, 

the Income from 'bank nights' would not have been 

substantially more than that which had obtained 

prFor to the operation of the plan. In fact, the 

whole plan Is built up end made profitable because 

no normal person likes to 'bum' his neighbor for 

something, end by en appeal to the psychology of 

cupidity which makes some take e chance of making 

large gains by a small outley. Those who invented 

end formuleted the plan may not have been 'learned 

in the law' but their knowledge of mass-psychology 

we9 not wanting." 

Xe believe this language sufficient to show that the 

element of consideration is not removed by the giving of free 

coupons upon request. It is our opinion that the further fact 

thet the request must be made to the heed of a firm will serve 

even more to deter a person from asking for a free coupon. 

The next question Is whether or not the element of chance 

is present In the plan. In order to win a cash award a person's 

name must first be drawn end then certein questions mst be correctly answered. At first blush the plan seems to involve both 

chance and skill. In 27 Corpus Juris 968, we find this deflnltion 

of "game of chance": 

"The phrase 'geme of chance', it has been 

said, is not one long known In the law end having 

there in a settled signification. It is a game 

determined entirely or in pert, by lot or mere 

luck, and in which judgment, practice, skill or 

adroitness heve honestly no office et all, or ere 

thwerted by chance; a game in which hazard entlrely predominates." 

An excellent end exhaustive annotation on games of chance 

and games of skill appears in 135 A.L.R. 104-188. This annotation 

reviews the verlous types of games end discusses the Ingredients 
Honorable J. G. Anderson, page 5, V-238 

of chance end skill es they appear In these games. Unfortunately, 

no Texas ceses appear nor have any been found elsewhere, in which 

a Court has drawn a dlstlnct line between games of chance end 

games of skill. The case of Adams v. Antonio, 88 S.W. (2d) 503, 

error refused, was decided by the Waco Court of Civil Appeals in 

1935. ThLs cese involved the question of whether or not marble 

machines were gambling devices under Articles 619 and 620, Vernon's Penal Code. We think the opinion pertinent only because 

of Judge Alexander's adoption of the language cited above from 

27 Corpus Juris. The following statement is quoted from the 

oplnlon: 

"In passing on the question here involved, 

we have not found It necessary to determine whether 

the game played on the machines here under conslderetion is one of skill or one of chance for the 

reason that the statute makes no such distinction 

but epplles alike to all such tables exhibited for 

the purpose of gambling, regardless of the character 

of the game played thereon. However, if a declslon of this question be necessary to a solution 

of the case before us, It la our opinion from the 

evidence that the element of chance, es the game is 

played, so predominates over the element of skill 

es to make the game essentially one of chance and 

not of skill. 27 C. J. g68-969." 

As to whether the element of chance nest control over 

the element of skill in order to bring a pertLculer scheme under 

the lottery laws, we cite 34 American Jurisprudence, pages 649, 

650 : 

"In the United States, however, & what aunears 

to be the weight of authority at the present day, it 

5 zt-ii&essery that this element of chance be pure 

chance, but It may be eccompanled by en element of 

calculation or even of certainty; it is s;;z;",;ent 

if chance -- is the dominant z controlling . 

8, . . . . . . . 

"It has been said that no sooner is the term 

'lottery' defined by a court than ingenuity evolves 

some scheme within the mlschlef discussed, although 

not quite within the letter of the definition given; 

-- but an examination -- of the meng --- cases on the subject 

will show that It Is ve~g difficult, If not Lmuossible. rortheost Tiiii enious and subtle mind to devise x scheme or- shorEf e gratuitous distribution a prouerty, whichhz ---- xot been heldvthe 
Honorable 3. G. Anderson, page 6, V-238 

courts of this country to be In violetlon of the 

lottery laws In force In the various stateTo 

the Union. The courts will inquire, --- not intothe 

Ge.-but Into the -however sklllfullg e 

guised. in order & ascertain u It is urohtbited, 

or if it has the element f chance." (Emphasis 

added) 

Ageln, to show the general rule followed, we quote from 

Volume 2 of Brlll's Cyclopedia of Criminal Law, page 1715: 

"It is not e lottery where the prizes ere 

awarded es the result of e contest depending solely 

on skill or judgment. And It has been held by some 

courts that the dlstributlon nest be purely by 

chance without eny other element effecting the result. m according -- to the welnht of authority fi 

& sufficient If chance is the dominating element, 

althouah the result w be to some extent effected 

hthe exercise Op judnment ,r skill, or thoL$h 

there may also be an element of uncertainty. 

(Emphasis eddedr 

The following language quoted frcm 38 Corpus Juris 291, 

also sets forth the general rule: 

followed,in the United 

'lotterr' includes those 

schemes wherein thence is the dominant factor In 

determinlna the result, although It may be effected 

& some degree by-u exercise of skill or judgment; 

but= mle, known as 'the pure chance doctrine', 

that e contest Is not a lottery unless ifs issue 

depends entirely on chance, is supported by some 

authorities Fn this country, end Is of general eppllcation In England and Canada. 

"While the better rule Is that the fact that 

skill OP judgment may be applied in a competition 

does not prevent it from being e lottery Ff the 

element of thence predominates, yet, even where 

that rule prevails, It Is also well settled that 

competltlons In which skill or judgment is the 

predominant factor in determining the winners are 

not lotteries, even though the competitors ere 

required to p3y en entrance fee." (Emphasis added) 

You heve submitted e list of qualifying end final questions which mst be correctly answered by the persons whose names 

are chosen. The instructIons Fnform us that these questions will 
Honorable J. G. Anderson, page 7, V-238 

be publicized prior to the drawing, and that a person may select 

from the publicized list the category of questions he wishes propounded to him. As already stated, the mFn1m.m number of final 

questions asked of a contestantls one and the maximm ten. Kowever, even though all final questions are not answered correctly, 

the contestant receives a share of the award fund for each question properly answered. We have read the questions bearing In 

mind the above facts, and it is our opinion that Fn the plan 

known as "bonanza" the element of chance predominates. 

It is therefore the opinion of this department that the 

plan "bonanza" contains the three essential elements of a lottery 

and wuld be violative of Article 654 of Vernon's Penal Code. 

SUMMARY 

Under a sales stlmulatlon plan known as 

"bonanza" whereln customers are given coupons 

with each purchase, which coupons entitle them 

to participate in a drawing, for a cash award, 

the fact that upon request, a coupon may be received without a purchase, does not remove from 

the scheme the element of consideration necessary for a lottery. The plan "bonanza" contains 

the three essential elements of a lottery -- consideration, prFze and chance -- and Is violative 

of Article 654, Vernon's Penal Code. 

Yours very truly, 

ATTORNEY GENERAL OF TEXAS 

By s/Clarence Y. Mills 

Clarence Y. Mills 

,Asslstant 

APPRGVED: 

s/Price Daniel 

A'J?PORNEYGENERAL 

Enclosures 

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