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 hisa lottery inviolation ofthe Texas Penal Code.
You have requested an opinion as to whether a certain sales promotion scheme is in violation ofthe 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 ofworking days inthe month into the total monthly sales to determine the average daily sales. At the end ofthe month the daily sales for each working day is computed and the day ofthe month onwhich the sales most nearly approach the average daily sales for that month is declared the “lucky day”
. All customers who made purchases ofmerchandise onthe “lucky day” receive a refund ofthe entire purchase price ofthe articles so purchased.
vides: Article III, Section 47, ofthe Constitution ofTexas, pro-

“The Legislature shall pass laws prohibiting the establishment oflotteries and gift enterprises inthis State, as well as the sale oftickets in lotteries, gift enterprises or other evasions involving the lottery principle, established or existing in other States.”

Article 654, Penal Code ofTexas, 1925, provides:

“If any person shall establish alottery 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 ifany 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 ofprizes by lot or chance among persons who have paid or who have agreed to pay avaluable consideration for the opportunity to win these awards. The Texas courts have consistently held that alottery consists ofthree essential elements, namely, (1) a prize or prizes, (2) the award or distribution ofthe prize or prizes by chance, and (3) the payment either directly or indirectly by the participants ~ofa consideration for the right or privilege ofparticipating. 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 amerchant invites customers to purchase his merchandise with the offer that the consideration that the customer exchanges for the merchandise will cover the purchase price ofthe merchandise and the chance to win aprize, 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. Itis, therefore, our opinion that such a sales promotion scheme is inviolation ofArticle 654, PenalCode ofTexas, 1925. SUMMARY

A sales promotion scheme whereby a business house establishes a “lucky day” and refunds to customers who made purchases of merchandise onthe “lucky day” the purchase price ofthe articles so purchased, is a lottery and in violation ofArticle 654, PenalCode ofTexas, 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 ofTexas
By @&d Q-J& Richard B. Stone Assistant Attorney General

BY: James N. Ludlum