### THE ATTORNEY GENERAL OF TEXAS

December 20, 1990

Honorable Terra1 Smith Chairman Natural Resources Committee House ofRepresentatives P. 0. Box 2910 Austin, Texas 78768-2910
DearRepresentative Smith: Opinion No. JM-1267
Re: Authority of the legislature topermit casino games of chancewithout a constitutional amendment (RQ-2102)

Article III, section 47, of the Texas Constitution provides that the.legislature "shall pass laws prohibiting lotteries and gift enterprises," while permitting the holding of certain charitable bingo games and raffles. The legislature has soprovided, forbidding inchapter 47 of the Penal Code the holding of lotteries. In addition, the definitions andprohibitions set forth inchapter 47, which proscribes "gambling~~asdefined inthat chapter, are broad enough to effectively prohibit those types of games typicallyconducted ingambling casinos. See Searcy & Patterson Practice Commentary, Tex. Penal Code g47.02 (Vernon 1973).1
You ask about theproper construction of section 47 of article III. Specifically you ask the following three questions:

1. The Practice Commentary to section 47.02 provides inpertinent part:

Section 47.02 as enacted appears to proscribe all forms ofgambling, from coinmatching and the weekly football pool to lotteries and roulette to parimutuel betting whether on track orwith abookie. As such the section preserves, although with much greater economy, thebasic scheme of prior law that in Penal Code arts. 615 to 618, 644, 645, and 646 to 652 outlawedmost forms ofgambling.

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1. May the legislature, without anamendment toArticle III, Section 47, of the Texas Constitution, authorize any of the following casino gambling games [in]this state: (a) roulette; (b) dice; (c) slotmachines; or Cd) other games awarding aprize solely by chance? 2. May the legislature, without anamendment toArticle III, Section 47, of the Texas Constitution, authorize any of the following casino gambling games inthis state: (a) poker; (b) blackjack; (c) sports pools: or (d) other games involving an element of skill? 3. May the legislature, without an amendment toArticle III, Section 47, of the Texas Constitution, authorize casino gambling to exist 9$& on PortArthur's Pleasure Island? There isno question that chapter 47of the Penal Code proscribes those gaming activities about which you ask. See Penal Code 88 47.01, 47.02. The issue is whether those gaming activities fall within the ambit of the phrase "lotteries and gift enterprises" set forth in section 47 of article III and are thereby prohibited by the Texas Constitution. If they do, then the legislature may not authorize those activities by amendins the Penal Code: ifnot, then it may. &g 0, -494S.W.Zd 866 (Tex.Crim. APP. 1973);barrv v. State, 45 S.W. 571 (Tex.Crim. App. 1898). The Texas Constitutions of 1845, 1861, 1866, and 1869 each contained the following prohibition regarding lotteries:

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No lottery shall be authorized by this State: and thebuying or selling of lottery tickets within this State isprohibited.
Tex. Const. art. XII, 5 36 (1869);Tex. Const. art.VII, 5 17 (1866):Tex. Const. art.VII, 5 17 (1861);Tex. Const. art.VII, § 17 (1845). The constitution of 1876 contained the following prohibition of lotteries set forth in section 47of article III:

The Legislature shall pass laws prohibiting the establishment of lotteries and gift enterprises in this State, aswell as the sale of tickets in lotteries, gift enterprises or other evasions involving the lottery principle, established **or** existing in other States.

- The addition of the language prohibiting 'I 9ift enterprises orother evasions of the lottery principle" apparently was included inorder to indicate thedrafters' support of two Texas Supreme Court cases that held that the 13th Legislature did not license the operation of "gift enterprises" by the enactment of anoccupation tax on them and that a "gift enterprise," as then understood, was essentially a lottery.3 See Randle v. State, 42Tex. 580 (1875); State v. Randle, 41 Tex. 292 (1874); 1G. Braden, The Constitution of the State of Texas: AnAnnotated and Comnarative Analvsis 192 (1977).

2. It is apparent that the phrase was intended to proscribe other forms of lotteries. See also Citv of Wink v. Griffith Amusement Co., 100 S.W.2d 695 (Tex.1936): State V. Randle, 41Tex. 292 (1874).
3. The licensing statute defined "gift enterprises" in the following fashion: Every person, firm, or corporation who shall sell anything with apromise, either expressed or implied, togive anything in consideration of such sale and purchase, shall be regarded as the proprietor of a gift enterprise.
Acts 1873, 13th Leg., ch. 121, 5 3,at 200.

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Section 47of article IIIwas amended in 1980 to permit the operation ofbingo games **by** charitable organizations and again in 1989 topermit such organizations tohold raffles. Acts 1989, 71st Leg., H.J.R. 32, 5 1;Acts 1979, 66th Leg., S.J.R. 18, § 1. Subsection (a)of section 47 of article III of the Texas Constitution nowprovides the following:

The Legislature shall pass laws prohibitingLotteries and uift enternriseq-in this State other than those authorized by Subsections (b)and (d) of this section -[which authorize the legislature to permit under certain circumstances the conducting of charitable bingo games and raffles]. (Emphasis added.) The Texas Supreme Court has declared that section 47 was not intended to condemn merely lotteries, butwas intended also to condemn separately stated schemes, which were not lotteries, but which involved the lottery principle, or chance:
Ingeneral, itmay be said that chance is

the basic element of a lottery. Unless a scheme for the awarding ofaprize requires that itbe awarded by achance, it isnot a lottery. . . . There are, however, ina lottery, according to the authorities, three necessary elements, namely, the offering of a prize, the award of the prize by chance, and the giving of aconsideration for an opportunity towin theprize. 38C-J. p. 289, § 2. But the ons tut'o inas which fall h t fcontainina all the essential sor 0 elements of a lotterv. namelv. those thinas which involve the lotterv nrincinle. ofwhich q II ce" 's itutes the verv basis of a lotterv. andwithout which it o. wul (Emphasis added.) [ C't ofW'n o., 100 S.W.2d 695, 701 (Tex.1936).
But it is equally clear that the drafters did not intend section 47of article III toproscribe a forms of gambling. During the drafting of the constitution, an amendment to section 47 was offered to add thewords "and 4

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shall pass laws prohibiting gambling of every character in allplaces." The amendment was not adopted. 1875 Texas Constitutional Convention, Journal of the Constitutional Convention of the State ofTexas, Begun and Held at the City of Austin, September 6, 1875, at 269. Moreover, it isclear that the term wlottery'*was not thought at the time that section 47 was adopted to include all forms of gambling either. See Panas **V.** Texas Breeder &Racina Ass'n 80 S.W.2d 1020 (Tex.Civ.App. -GalvesEon 1935,writ diAm#d) (construing section 47not toprohibit wagering on horse races); State v.Rand&, 41Tex. 292 (1874);V.T.C.S. art. 179e (creating the Texas Racing Commission and permitting parimutuel wagering onhorse races and greyhound races).
Texas courts uniformly have held that three elements comprise a lottery:

(1) aprize in money or other thing of value: (2) itsdistribution by chance: and (3) payment, either directly or indirectly, of avaluable consideration for the chance to win theprize. Citv ofWink *Brice v. State, (Tex.Crim. ipp?%;) 242 S.W.Zd 433, 434 ;Colev. State, 112 S.W.2d 725 (Tex. Crim. App. 1937); State v. Soconv Mobil Oil Co., 386 S.W.Zd 169 (Tex.Civ.App. -SanAntonio 1964,writ ref'd n.r.e.)i4 see also Attorney General Opinions JM-513 (1986); H-820 (1976). With your first two questions, you askwhether a list ofgaming activities typically conducted ingambling casinos fallswithin the ambit of thephrase "lotteries and gift

4. Subdivision (6)of section 47.01 of the Penal Code defines *llottery"inthe following fashion: *Lottery' means any scheme orprocedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration fora chance towin anything ofvalue, whether such scheme or procedure iscalled a pool, lottery, raffle, gift, gift enterprise, sale, policy game, or some other name.

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enterprises." Forpurposes of this opinion, we assume that two of the necessary three elements of a lottery would be present during the holding of the gaming activities about which you inquire, h, the payment of consideration and the awarding of aprize. We understand you to ask whether the necessary third element, the award of the prize by chance, as opposed to anaward determined by skill, would also be present.
InAttorney General Opinion C-619 (1966), this office was asked whether acertain referral selling plan called a "representative purchasing commission agreement" constituted a lottery. Indiscussing the necessary element of chance, the opinion declared:

The second element, thedistribution of the prize by chance, requires a closer analysis in the light of the decisions as to whether thedominatina element of the entire scheme was that of chance, or that of skill, judgment,or ingenuity, 54C.J.S. 846, Lotteries, Sec. 2b(2), and cases cited. If the plan or game depends entirely on skill, it isnot a lottery although prizes are offered for the best solution. Boatriaht .State, 118 Tex. Crim. 381, 38 S.W.Zd 87 71931). If chance predominates over skill or judgment and permeates thewhole plan, a lottery is established. &.9rwood & Robert Yakima. Ic Clvde .Le 67 W.D.Zd :;8, 409 P.:d' 1:; (Wash.GSup.azti5). Id. at 5-6 (emphasis inoriginal). m Adams v Antonio, 88 S.W.2d 503, 505 (Tex.Civ. App. -Waco 1935,'writ ref'd) (dictato the effect that gaming statute was violated in instance inwhich chance predominates over skill): see also Attorney General Opinions WW-222 (1957); V-1483 (1952); V-544 (1948);V-238 (1947).
We conclude that the legislature, without amending section 47of article III of the Texas Constitution, may amend chapter 47of the Penal Code topermit the holding of those gaming activities that do not constitute a lottery, i.e., that do not comprise the elements of consideration, a prize, and chance. Whether any of the gaming activities about which you ask involves the dominating element of skill, as opposed to chance, is aquestion of fact that cannot be resolved in the opinion process. It is the character of the game, andnot the skill orwant of skill of

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the player, that determines whether the game isone of skill or chance. m w v.AntOnlQ m (authorities cited therein). Therefore, we cannoi answer your first two questions.
Your third question is whether the legislature may, without amending section 47 of article III of the Texas Constitution, permit theholding of those gaming activities typically comprising casino gambling a in Port Arthur. Youhave not provided us with adraft of any proposed amendment to chapter 47of the Penal Code. We do not provide general guidance or answer speculative questions in the opinion process. Accordingly, we decline to answer your third question. We note, however, #at any amendment to chapter 47 of the Penal Code that permitted inPort Arthur alone theholding of otherwise proscribed gaming activities should be considered in light ofarticle III, section 56, of the Texas Constitution.5 But see V.T.C.S. art. 179e, 9 6.14(c) (provides that each greyhound track licensed under the actmust be located ina county that has apopulation of more than 190,000 according to the most recent federal census, and that includes all or part of an island that borders the Gulf of Mexico).
We conclude that the legislature may, without amending section 47 of article III of the Texas Constitution, amend chapter 47 of the Penal Code to authorize gaming activities that donot constitute a lottery orgift enterprise, i.e.,

5. Article III, section 56, of the Texas Constitution prohibits the legislature from enacting, except asprovided, local and special laws andprovides inpertinent part:

The Legislature shall not, except as otherwise provided in this Constitution, pass any local or special law, authorizing:

. . . . For limitation of civil or criminal actions:

. . . . And inall other cases where ageneral law canbemade applicable, no local or special law shall be enacted.

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that do not comprise the three elements of consideration, prize, and chance. Whether any specific gaming activity involves the dominating element of skill, as opposed to chance, is a question of fact that this office cannot resolve inthe opinion process. Therefore, we cannot answer asamatter of lawyour first two questions. Because we do not answer speculative questions inthe opinion process, we cannot answer your third question. SUMMARY The legislature, without amending section 47of article III of the Texas Constitution, may amend chapter 47 of the Penal Code to authorize the holding of those gaming activities that donot comprise the elements **of** a lottery, i.e., consideration, prize, and chance. Whether any specific gaming activity involves the dominating element of skill, as opposed to chance, isaquestion of fact that this office cannot resolve in the opinion process. I .

MARY KELLER FirstAssistant Attorney General
LOUMCCREARY Executive Assistant Attorney General
JUDGE ZOLLIE STEAKIEY Special Assistant Attorney General
RENEA HICKS Special Assistant Attorney General
RICK GILPIN Chairman, Opinion Committee Prepared byJimMoel,linger Assistant Attorney General JIM MATTOX Attorney General of Texas ‘

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