THEAYTORNEY GENERAL 

OFTEXAS 

Mr. A. G. Mueller 

County Attorney 

Llano county 

Llano, Texas 

Dear Mr. Mueller: 

Opinion No. WW-355 

Re: Whether a drawing for prizes 

constitutes a lottery where 

some of the irrkrt:: ?ZF given 

with ;,ur~ ha;e of merchandise 

and 5ome of the tick~ct: are 

&:ttn avfay Irvt. 

6. 

. . . 

“‘I‘hc nlerchants distribute the tickets to persons 

who visit their establishments, whether or not they purchnse 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.<turday evening at a stipulated tmle, R 

drawing is had from the tickets given away (a portion of 

the ticket bein?.:, deposited in a receptlc:lr maintained in 

ti.e busincsa t::~.t,wbli.shment of each merchant whr;rti rhe 

tlciets are ~v::il.il~le. rnd a stub being retaintd tly ‘;lr, 
Mr. A. G. Mueller, page 2 (WW-355) 

fol.lows : 

holder thereof) and the lucky number or numbers are 

announced. If the holder of the lucky number or numbers are not present, they will noltheless be handed 

the prize or prizes provided they contact one of the participating me,rchants within 7 days from date of the drawing, and exhibit the stub or stubs to the winning ticket or 

tickets. Should they not make such exhibition within such 

time, the prize or prizes are placed back in the ‘pot’ for 

redistribution after another drawing. 

“Purpose of this arrangement is to encourage 

people in the particular town to trade ‘at home’ - but 

not with any particular merchant. Tickets are available 

for purchase by ANY MERCHANT OR BUSINESS MAN 

in the particular town.” 

Section 47, Article III, Constitution of Texas, provides as 

“The Legislature shall pass laws prohibiting the 

establishment of lotteries and gift enterprises in this 

State, as well as the sale of tickets in lotteries, gift enterprises or other evasions involving the lottery principle, established or existing in other States.” 

Article 654, Vernon’s Annotated Penal Code, reads as 

follows : 

“If any person shall establish a lottery or dispose 

of any estate, real or personal, by lottery, he shall be 

fined not less than one hundred nor more than one thousand dollars; or if any person shall sell, offer for sale 

or keep for sale any ticket or part ticket in any lottery, 

he shall be fined not less than ten nor more than fifty 

dollars.” 

Chief Justice Cureton, speaking for the Supreme Court 

of Texas, in the case of City of Wink v. Griffith Amusement Co., 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 public 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 consideration 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, because 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 receiving tick~ets c3me into the store and the merchant thereby had an opportunity to display his merchandise. It is a fundamental rule of merchandising 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 customer went to the merchant’s place of business was of value to the merchant, 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. Consequently, 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 ensables 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, distributed 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 drawings :3nd distribution of prizes, were inducements to patronage 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’rvice 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 constituted d lottery within the meaning of the law.” (Emphasis 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 person or persons who give the prizes, that are distributed by chance, receive 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: 

64 1 . . 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 ticket, 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 drawing . ” (Emphasis by the Court) 

The Court of Criminal Appeals of Texas approved this reasoning in the 

case of Cole v. State, 133 Tex.Cr.R. 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 purchaser 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 president 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 believe 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 Pac. 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 sufficient if some do, though many do not pay a valuable consideration. The l,egal effect of the transaction is not 

changed by the fact that some do not pay. If it is a lottery 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.Cr.R. 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 distinguishable 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 affect 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 lotteries ‘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 evasions 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 refusing to aid in a transaction alleged to be within the statutory prohibition, the courts will ordinarily construe liberally 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 invention of schemes and devices for the purpose of satisfying 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 onedollar’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 drawing 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, Article 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 received their tickets free. 

APPROVED: 

OPINION COMMITTEE : 

George P. Blackburn, 

Chairman 

Jack Goodman 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

:I,, ;/ ~, 

,:, ,, . ,_.. L..~. 

,,f 

BY 

Mark McLaughlin 

Ralph R. Rash 

Reviewed for the Attorney General 

Cecil C. Rotsch 

Assistant 

By: W. V. GEPPERT