AUSTIN 11. TIC&+@ 

October 31, 1957 

Honorable Nelson R. Sharpe 

Assistant District Attorney 

Kleberg County Courthouse 

Kingsville, Texas 

Dear Mr. Sharpe: 

Opinion No. WW-295 

Re: Whether a certain sales promotion scheme his a lottery in violation of the Texas Penal Code. 

You have requested an opinion as to whether a certain sales 

promotion scheme is in violation of the Texas Lottery laws. You have stated tbat the sales promotion scheme in question known as “Lucky Day”. is 

as follows: 

A business house totals its monthly sales and then divides 

the number of working days in the month into the total monthly sales to determine the average daily sales. At the end of the month the daily sales 

for each working day is computed and the day of the month on which the 

sales most nearly approach the average daily sales for that month is declared the “lucky day”. All customers who made purchases of merchandise on the “lucky day” receive a refund of the entire purchase price of the 

articles so purchased. 

vides: 

Article III, Section 47, of the Constitution of Texas, pro- 

“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, Penal Code of Texas, 1925, provides: 

“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.” 
Hon. Nelson R. Sharpe, page 2 (WW-295) 

There is no Texas statute which defines a lottery, but the 

Texas courts have consistently adopted the following definition: A lottery 

is a scheme for the distribution of prizes by lot or chance among persons 

who have paid or who have agreed to pay a valuable consideration for the 

opportunity to win these awards. The Texas courts have consistently held 

that a lottery consists of three essential elements, namely, (1) a prize or 

prizes, (2) the award or distribution of the prize or prizes by chance, and 

(3) the payment either directly or indirectly by the participants ~of a consideration for the right or privilege of participating. City of Wink v. Griffith Amusement Company, 129 Tex. 40, 100 S.W.Zd 695 (1956); Cole v. State, 

133 Tex.Crim. 548, 112 S.W.2d 725 (1938); Smith v. State, 136 Tex.Crim. 

611, 127 S,W.2d 297 (1939); Brice V. State, 242 S.W.2d 433 (Tex.Crim. 1951). 

The sales promotion scheme that you have described is one 

whereby a merchant invites customers to purchase his merchandise with 

the offer that the consideration that the customer exchanges for the merchandise will cover the purchase price of the merchandise and the chance 

to win a prize, i.e., the right to participate in the merchant’s “lucky day”. 

It seems clear that such a scheme falls within the court’s definition of a 

lottery and the three essential elements of a lottery, (1) prize, (2) chance, 

and (3) consideration, are present. It is, therefore, our opinion that such a 

sales promotion scheme is in violation of Article 654, PenalCode of Texas, 

1925. 

SUMMARY 

A sales promotion scheme whereby a business house establishes a “lucky day” and refunds to customers who made purchases of 

merchandise on the “lucky day” the purchase price of the articles so purchased, is a lottery and in violation of Article 654, PenalCode of Texas, 1925. 

APPROVED: 

OPINION COMMITTEE: 

H. Grady Chandler, Chairman 

J. C. Davis, Jr. 

W. V. Geppert 

C. K. Richards 

John Minton 

George P. Blackburn 

REVIEWED FOR THE 

ATTORNEYGENERAL 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

By @&d Q-J& 

Richard B. Stone 

Assistant Attorney General 

BY: James N. Ludlum