Case Name: Longstreth v. Cook, Secretary Arkansas Racing Commission
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1949-04-04
Citations: 215 Ark. 72
Docket Number: 4-8780
Parties: Longstreth v. Cook, Secretary Arkansas Racing Commission.
Judges: Grieein Smith, C. J. and Robins, J., dissent.
Reporter: Arkansas Reports
Volume: 215
Pages: 72–101

Head Matter:
Longstreth v. Cook, Secretary Arkansas Racing Commission.
4-8780
220 S. W. 2d 433
Opinion delivered April 4, 1949.
Dave E. Witt, for appellant.
Ike Murry, Attorney General and O. T. Ward, for appellee.
Otis Nixon, Warren E. Wood and Griffin Smith, Jr., for intervener.
An introduction to Street’s Law of Gaming is: “The law of gaming is a jig-saw puzzle. The author’s aim has been, shirking no difficulty, to find a rational explanation of it. To do this it was necessary for him to go back to the earliest statutes and decisions. He has read, and re-read every decision which he has cited — about 1,600, including Irish and Scottish.”

Opinion:
Frank Gr. Smith, J.
The question presented by this appeal is whether Act 46 of the Acts of 1935, p. 90, legalizing pari-mutuel betting on horse races violates § 14 of Art. 19 of the State Constitution and is void for that reason. This section of the Constitution reads as follows: "No lottery shall be authorized by this State, nor shall the sale of lottery tickets be allowed." This Act 46 of 1935 created the Arkansas Racing Commission, and, among other things, provided that the Commission shall promulgate rules and regulations for horse racing and for the issuance of permits to operate race tracks and licenses to hold racing meetings under the terms and conditions therein specified.
Section 14 of this Act reads in part as follows: "Any • license under the provisions of this Act, conducting a horse racing meeting, may provide a place or places in the race meeting grounds or enclosure at which he, they or it may conduct and supervise the pari-mutuel or certificate system of wagering by patrons on the horse races conducted by such license at such meeting, and such pari mutuel or certificate method of wagering upon such horse races held at said race track, and within such race track, and at such horse racing meeting, shall not under any circumstances if conducted under the provisions of this Act, be held or construed to be unlawful, other statutes or parts of statutes of the State of Arkansas, to the contrary notwithstanding."
The Act is a lengthy and very comprehensive one, and contains specific directions for the exercise of the license which the Commission is authorized to issue. Since the passage of the Act in 1935, the Racing Commission has issued annually a permit or license to hold racing meetings under its provisions in the City of Hot Springs, and it is sought by this suit to restrain the Commission from renewing this license or permit.
The argument is made that the Act is violative of the State's public policy, and that it legalizes what would otherwise be an unlawful act. In this connection it may be said that an Act was initiated and submitted at the General Election held in 1944 to repeal this Act, which was defeated by a large majority. As to what shall be the State's public policy, it may be said that this is a question which the General Assembly may decide. Upon the authority of Lewis' Sutherland Sta. Const., Vol. I, 136, we said: "As to whether a .law is good or bad law, wise or unwise, is a question for the Legislature, and not for the Courts. ' ' State v. Hurlock, 185 Ark. 807, 49 S. W. 2d 611.
We may therefore consider only the question of the constitutionality of Act 46, and rules have been often announced by this and other Courts to guide the approach to that question. In the recent case of Fugett v. State, 208 Ark. 979, 188 S. W. 2d 641, we said: '"The wisdom and propriety of statutory enactments are matters to be determined solely by the legislative branch of the government. Courts are not authorized to strike down a law enacted by the General Assembly unless it clearly appears that the law contravenes some provision of the constitution; and, .in case of doubt as to the con stitutionality of a statute, the doubt must be resolved in favor of the validity of the law."
Many of our cases are cited in support of the statement just quoted, to which an indefinite number from other jurisdictions could he added.
Unquestionably Act 46 has authorized and legalized and possibly given encouragement to a form of gambling, but the question here presented is whether it has done so by authorizing a lottery. If it does, the Act is unconstitutional, as the provisions of the Constitution herein-above quoted denied the G-eneral Assembly the power to authorize a lottery. So the question for decision is whether Act 46 authorizes a lottery.
The State Commissioner of Revenues is made the Secretary of the Racing Commission, and in the discharge of the duties imposed upon him he visited the track where the races are held and explained in detail how the betting thereon is conducted, and there appears to be no question but that the betting is conducted in a manner authorized by the Act.
The Court below held that a lottery had not been authorized and was not being conducted and dismissed the suit, from which decree is this appeal. This finding was based upon the testimony of the Revenue Commissioner, which is undisputed and is to the following effect:
The permit was issued to the Oaklawn Jockey Club of Hot Springs. The American Totalizator Company, which is a separate corporation from the Oaklawn Jockey Club, has a contract with the club to set up the mechanical equipment for the purpose of issuing and selling tickets to persons wishing to bet through designated windows in what is called the pari-mutuel room. There are ticket sellers at each window who are employees of the Totalizator Company. Under the law, ten per cent, of the proceeds of the sale of these tickets goes to the Jockey Club and five per cent, to the State, and the Totalizator Company is paid out of the Jockey Club's part of these proceeds. The Totalizator Company owns the machines which are used in betting and they are not for sale. At one window tickets are sold on horses to win, that is, to cross the finish barrier first. At another bets are made on a horse for a place, that is, to run second; and at another window, bets are made that a horse will show, that is, run third. At still another window bets are made which are said to be "across the board" or combinations, that is, that the horse bet on will finish first, second or third.
Bets are received at still another window called a Daily Double; that is, the bettor names the horse which will win the first race and another horse which will win the second race, and if the horses thus bet on win both the first and second races the person thus betting is said to have won the Daily Double. This pool is independent of all the other pools and relates only to the first and second races.
When a person wishes to purchase his ticket at a designated window the seller pushes a button similar to a cash register and the ticket at that time is printed by an individual machine designating the number of dollars paid for the ticket, and it is registered on an individual calculator which is there and is automatically transferred to what is called a master control totalizator. All of this takes place during the time the tickets are being sold for a particular race and they are sold before the beginning of that race. No tickets are sold in the second race until the first race has been run, with the exception of the Daily Double, nor on the third race until the second race has been run, and so on with the remaining races. Altogether eight races are run each day.
When a race is about to be run the machines are locked with a master key by the racing stewards who have a box in the stewards' stand and the betting windows are not reopened until a calculation is made of all the money that has gone through the individual machines and the totalizator has figured the amount of money in the Win, Show, and Place pools. From the total that has been placed in all the pools, fifteen per cent, is deducted, of which the Jockey Club gets ten per cent, and the State, five per cent.
The Jockey Club procures the horses that are to run at the racing meet, and there were about 1,200 of these during the preceding meeting. Some of these are not entered or run at any race during the meeting, but are kept there for training purposes. Others will run in more than one race during the meeting.
The owners bring their horses to the meeting and are accompanied by their trainers, who keep the horses in condition and accustom them to the tracks on which the races will be run. The horses are ridden by riders called jockeys, whose training, skill and ability are known to the owners who compete for the prizes offered in each race, and it is these prizes paid in money which compensate the owners for racing their horses. They receive no part of the money bet on the races. Admission fees to the race track are charged, but the owners of the horses have no share therein.
After the deduction of the fifteen per cent, above mentioned has been made the balance in each pool is paid to the holders of tickets bet on the horses in the respective pools. The bettors do not bet against each other. . The Act makes it unlawful to do so. The bet is between the bettor and the Jockey Club or the Association.
Horses are selected for entrance in a particular race by the Association, and the horses' names are listed or lined up on a daily racing card, and there is sold a racing form which shows the weight carried by each horse and its handicap depending on the past performances of the horse in previous races at that or other tracks. This weight handicap is intended in some measure to equalize the speed of the horses, and the amount thereof depends upon the horse's record in prior races run within the preceding twelve months.
The owners have trainers who are skilled in handling horses with the purpose of increasing their speed and making them more responsive to the control of the jockeys.
Many persons attend the races for the thrill of witnessing the horses as they cross the finish line, and add to the thrill and interest by betting on some horse without knowledge of the information disclosed by the form sheets. For instance, a lady might bet the minimum amount permissible on a horse having the same name as her kitchen range. But sources of information now are provided, as stated above, by which bettors may bet with more discrimination and with improved chances of selecting or picking a winner.
These form sheets designate whether upon previous performances a particular horse is a fair mud runner, a good mud runner, or a superior mud runner, which information is of value when the track upon which the races are to be run on the day of the issue of the form sheet is muddy.
Followers of racing who for long periods of time have studied the records of the horses choose as their selections the horse which in their opinion will be most likely to win and these are for sale and may be purchased at the track. Neither the Jockey Club nor anyone connected with it fixes the odds which will prevail on any horse. The bettors themselves do this and it is done through the number of bets made and the amount thereof-on particular horses.
The animal equation enters into these races just as the human equation enters into sports between men and women. A horse may run better on one day than on another, depending on the condition of the horse, and it is the function of the trainer to see that the horses are in the best possible condition and properly trained. The element of chance necessarily enters into these races, but it is by no means controlling. Other' elements of more importance are the condition and the power of endurance of the horse and the skill and daring of its rider. Some jockeys win more races and a higher percentage of the races in which they participate than others. The services of these jockeys are of course in greater demand by the horse owners who must win the races to obtain the money prizes for which they race.
Under the facts above stated, is the horse race a lottery conducted under the pari-mutuel system herein de scribed? It must be admitted that courts have differed in their conclusion, but an examination of many of these cases leads to the conclusion that the great weight of authority is that such races are not lotteries and we think the sounder reasoning supports that conclusion.
Lotteries are of ancient origin, some conducted for benevolent purposes and others solely for gambling. They became so common and their influence so pernicious that efforts were made to prohibit them. In every Constitution we have had the General Assembly has been denied the power to authorize their operation. They were singled out and not treated as other forms of gambling. Except as to lotteries, the Constitution left to th^ General Assembly the question of permitting, prohibiting or regulating gambling, and this long before the parimutuel system of conducting horse races had been thought of.
So .the question remains for decision whether the betting which has been licensed under the provisions of Act 46 of 1935 is a lottery. The inhibitions of our Constitution against authorizing a lottery would not make that a lottery which was not so in fact.
The word lottery is derived from the word lot, one definition of which as given in Webster's New International Dictionary is: "An object used as one of the counters or checks in determining a question by the chancefall or choice of one or more of them; a sort. See Sortilege, Divination. In drawing lets each competitor may place his lot (marked) in a receptacle from which a disinterested person draws one, on the owner of which the chance falls; or, each competitor may draw one of a series of lots, the chance falling upon the person who draws one previously specified. In casting lots, the lots are placed by the competitors in a receptacle which is then shaken until one falls out, the chance falling on its owner. ' '
• The word lottery is defined by the same authority as follows: "A scheme for the distribution of prizes by lot or chance; esp., a scheme by which one or more prizes are distributed by chance among persons who have paid or promised a consideration for a chance to win them, usually as determined by the numbers on tickets as drawn from a lottery wheel."
In our case of Burks v. Harris, 91 Ark. 205, 120 S. W. 979, 23 L. R. A., N. S. 626, 134 Am. St. Rep. 67, 18 Ann. Cas. 566, the following definition was given: "A lottery is a species of gaming, which may he defined as a scheme for the distribution of prizes by chance among persons who have paid, or agreed to pay, a valuable consideration for the chance to obtain a prize." This definition was taken from 25 Cyc. 1635.
It appears therefore that to constitute a lottery it is essential not only that the.element of chance is present, but also that it controls and determines the award of the prize whatever it may be.
In the chapter on Gaming, 12 R. C. L. 716, § 14, it is said: "A game of chance is said to be such a game as is determined entirely or in part by lot or mere luck, and in which judgment, practice, skill and adroitness have honestly no office at all, or are thwarted by chance. ' ' It was there further said: "The test of the character of the game is not whether it contained an element of chance or an element of skill, hut which of these is the dominating element that determines the result of the game. ' ' In a note to the test just quoted the case of People v. Lavin, 179 N. Y. 164, 71 N. E. 753, is cited as having been annotated in 1 Ann. Cas. 165, 66 L. R. A. 601. See, also, 27 C. J. 968, Chapter Gaming, § 4, 5, 6 and 7, and 34 Am. Jur. Title Lotteries, § 6, p. 649.
The question whether betting on horse races in which • the pari-mutuel system is employed is the subject of the annotation in 52 L. R. A. 51 and 85 A. L. R, 605. The 'briefs of opposing counsel in the case last cited collect other annotated cases from which it appears to have been more frequently held that the pari-mutuel system of wagering does not constitute a lottery. An opinion would he of interminable length which undertook to review all of them.
The annotated case in 85 A. L. R., supra, is that of People v. Monroe, 349 Ill. 270, 182 N. E. 439. In that case, with one member of the Court dissenting upon a ground not stated, the Supreme Court of Illinois held that a statute not essentially different from our Act 46 had not authorized a lottery. In reaching the conclusion stated it was there said: " Every event in life and the fulfill men! of every lawful contract entered into between parties is contingent to at least some slight extent upon chance. No one would contend, however, that a contract knowingly and understandingly entered into between two parties is a gaming contract merely because its fulfillment was prevented as the result of the befalling of unknown or unconsidered forces, or by the issue of uncertain conditions, or by the result of fortuity. The parimutuel system of betting does not come within the definitions given above. (In Webster's Dictionary, which we have hereinabove quoted.) While the amount of money to be divided is indefinite as to dollars and cents, it is definite in that the amount of money to be divided is the total stakes on the winning horse, less a given percentage to the management. The persons among whom the money is to be divided are not uncertain, as they are 'those who bet on the winning horse. ' The winning horse is not determined by chance, alone, but the condition, speed, and endurance of the horse, aided by the skill and management of the rider or driver, enter into the result. ' ' As showing that a horse race is not a game of chance 'the Court pointed out that in such races the horses engaged in the race are subject to human guidance and management, and it may be added that whip and spur are used to incite the horses to put forth their best efforts to win.
The canes cited and relied upon as supporting the contention that a lottery has been authorized are State v. Ak-Sar-Ben, 118 Neb. 851, 226 N. W. 705, and Pompano Horse Club v. Florida, 93 Fla. 415, 111 So. 801, 52 A. L. R. 51.
The Nebraska opinion above cited, delivered in 1929, supports appellant's contention, but it may be said of it that this opinion led to the adoption of an amendment to the Constitution of that State, § 24, Art. Ill, which nullified the opinion. The Pompano case, supra, did not involve the question of whether a horse race was dependent on chance or not, the issue there being whether betting on a horse race was prohibited by the Florida game statute. The Court held that it was and so we would hold if the question was merely whether it was gambling. The Florida Court said: "The question before us is whether or not the betting, selling and redeeming of certificates in the manner and for the purpose stated constitutes gambling or a game of chance." The Court merely held that it- was gambling, and so it is. So, also, is betting by the pari-mutuel system gambling, but it is' not a lottery, and Act 46 provides that such betting shall not be unlawful.
The use of the pari-mutuel machine does not make the betting a lottery, if it is not otherwise so, as it makes' no determination of what horses are winners. It is merely a wonderful machine which expedites calculations which could laboriously be made without its use. Its use in no manner affects the results of a race as it merely calculates the results of the betting after the races have been run and the respective winners announced.
We conclude, therefore, that while the element of chance no doubt enters into these races, it does not control them, and that there is therefore no lottery.
The decree so holding is affirmed. .-
This suit was originally filed by James MacKrell who did not prosecute an appeal from the decree, but one O. D. Longstreth, Jr., to save the appeal, filed an intervention-in the court below alleging the same right to prosecute the suit which MacKrell had and prayed in the Court below an appeal and caused a transcript of the proceedings to be prepared, which he filed in this Court and his appeal was granted by the Clerk of this Court.
Grieein Smith, C. J. and Robins, J., dissent.
George Rose Smith, J., not participating.