Case Name: ALBERTSON'S, INC., Plaintiff and Appellant, v. Honorable Robert B. HANSEN, Attorney General of the State of Utah, and Honorable R. Paul Van Dam, County Attorney of Salt Lake County, Defendants and Respondents
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1979-09-11
Citations: 600 P.2d 982
Docket Number: No. 15775
Parties: ALBERTSON’S, INC., Plaintiff and Appellant, v. Honorable Robert B. HANSEN, Attorney General of the State of Utah, and Honorable R. Paul Van Dam, County Attorney of Salt Lake County, Defendants and Respondents.
Judges: WILKINS, and HALL, JJ., concur.
Reporter: Pacific Reporter 2d
Volume: 600
Pages: 982–994

Head Matter:
ALBERTSON’S, INC., Plaintiff and Appellant, v. Honorable Robert B. HANSEN, Attorney General of the State of Utah, and Honorable R. Paul Van Dam, County Attorney of Salt Lake County, Defendants and Respondents.
No. 15775.
Supreme Court of Utah.
Sept. 11, 1979.
Ricardo B. Ferrari, Salt Lake City,, for plaintiff and appellant.
Robert B. Hansen, Atty. Gen., Michael L. Deamer, Michael N. Martinez, Asst. Attys. Gen., Theodore L. Cannon, Salt Lake County Atty., Donald Sawaya, Deputy County Atty., Salt Lake City, for defendants and respondents.

Opinion:
DURHAM, District Judge:
Plaintiff, a retail grocery chain, filed this action for a declaratory judgment, seeking a determination that its retail sales promotion known as "Double Cash Bingo" was not within the definitions of "gambling" or "lottery" in Sec. 76-10-1101 of the Penal Code. The material facts were not in dispute. Plaintiff filed a motion for summary judgment that it was not subject to prosecution for violation of the Penal Code by conducting Double Cash Bingo. The defendants filed cross-motions to dismiss. The trial court entered judgment dismissing plaintiff's action. The judgment of the trial court is reversed. All statutory references are to U.C.A.1953. No costs awarded.
Double Cash Bingo was described as a game in which the player is given a bingo-type card and a disc containing numbers under opaque covers. The player uncovers the numbers on the disc. If the numbers can be placed in a winning bingo pattern on the card, the player receives a designated cash prize. The cards and disc were distributed at Albertson's locations free of charge to anyone requesting them. No purchase was required to obtain them and a review of the record does not disclose any circumstance which would prohibit a player from obtaining them by mail and thus participating in the game without even entering upon plaintiff's premises. The record shows further, however, that plaintiff experienced substantial increases in sales which it attributed to the success of the advertising and promotional aspects of the Double Cash Bingo program.
Albertson's conducted this promotional game for several weeks prior to March 3, 1978, throughout Utah and in other western states. On March 2, 1978, Albertson's was threatened with criminal prosecution, if the game were not discontinued. Albertson's discontinued the game and initiated this action.
The issue before the Court is whether or not the promotional scheme described above constitutes an illegal lottery within the meaning of Section 76-27-9 and Article VI, Section 27, Constitution of Utah. Before the trial court, defendants relied primarily on Geis v. Continental Oil Company to sustain the claim that Double Cash Bingo was a lottery under Utah law. In Geis, the contestants filed an action to recover the prize they claimed to have won in a promotional contest sponsored by defendant. The defense relied upon an alleged failure to comply with the rules of the prize contest. This Court observed that the plaintiff in such a case must show first that the scheme was legal and that a valid and enforceable contract could therefore be formed. Otherwise, the aid of the courts might not be sought in the enforcement of an illegal agreement. As observed by Justice Crockett in a partially dissenting and partially concurring opinion in that case:
the defense of illegality of the contract was not asserted nor relied on, nor in any manner raised or presented in the district court . . . It is unnecessary to establish bad precedents as to both of the propositions . . . stated above. It has the potentially troublesome and unfair effect of deciding an important issue without giving the parties an opportunity to present evidence, or to argue and brief the matter, and without giving the trial court an opportunity to rule thereon. This seems particularly undesirable because there are so many advertising and promotion plans of this general character that such a ruling may have such far-reaching effects upon business and commerce.
The case now before this Court presents an opportunity to fully review and determine the questions decided by implication or directly in Geis without benefit of argument and briefing by the parties there. Further, the facts in Geis differ in some respects from those here. The scheme in Geis was certainly reviewed by this Court in light of the nature of plaintiff's participation in it. She had acquired no less than 522 cards or chances to win a prize by herself, her husband, and his employees. That activity may well have constituted such a distortion of the planned and anticipated course of the promotional scheme as to take it outside the limits of any legitimate enterprise. We have no similar distortions before the Court in this declaratory judgment action, and must review the proposed promotional scheme in the context in which it was designed and intended to function in the usual ease.
Article VI, Section 27, Constitution of Utah, provides:
The Legislature shall not authorize any game of chance, lottery or gift enterprise under any pretense or for any purpose.
This Court has the responsibility of determining the elements of a "lottery" as set forth in that constitutional provision. Those, elements have been well established in Utah and are virtually the same as are set forth in the statutory definition of a lottery contained in Section 76 — 10-1101(2) as enacted in 1973:
(2) 'Lottery' means any scheme for the disposal or distribution of property by chance among any persons who have paid or promised to pay any valuable consideration for the chance of obtaining property, or portion of it, or for any share or any interest in property, upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle, or gift enterprise, or by whatever name it may be known.
It can be seen that from the above definition that, to be a lottery, this scheme must involve "property" (or "prize"), distribution by "chance," and the payment of "any valuable consideration for the chance". The existence of property to be distributed by chance here is obvious; the remaining question is whether Double Cash Bingo necessitates or involves the payment of any valuable consideration for the opportunity to play and the chance to win. Defendants argue, and a minority of courts in other jurisdictions have held, that the combination of inconvenience, effort, time, transportation expense and "sacrificed alternatives" (such as traveling to another shopping location) on the part of players, with the increased profits received by the promoter because of the patronage, sales and general good will generated by the scheme, constitutes "consideration" within the meaning of the definition of' a "lottery" under our statute.
This analysis, however, appears to overlook an important portion of our statutory language. A "lottery" in Utah does not exist merely by virtue of the presence of valuable consideration flowing to or from any element in the transaction. Rather, the statute specifically and directly requires the payment or promise to pay "any valuable consideration for the chance of obtaining property". (Emphasis added.) The exchange contemplated is the giving of something of value in return to the chance to win. The dispositive issue, therefore, is not what the promoter receives but what the player parts with. The participant in Double Cash Bingo acquires a chance to win by obtaining a disc and a card. He gives no more for that than the mere request. Although Albertson's received considerable benefits indirectly from the program, those benefits are not given, exchanged, or paid by customers or consumers in order to receive their chance to win. The profits to Albertson's are not "paid . . . for the chance of obtaining property" and thus cannot be part of the "valuable consideration" required by our statute to find a lottery.
Under this analysis, the only remaining elements of valuable consideration are the time, effort, inconvenience, and exercise of choice by participants. A majority of courts in other jurisdictions have found such elements to fall short of the requirements of valuable consideration. Cudd v. Asehenbrenner is illustrative of the majority rule, wherein the Oregon court presented the following analysis:
. [N]o one could be rendered poor by participating in the plaintiffs' drawings. The worst that could happen to anyone would be that he would buy some groceries. But, if he purchased any, he would do so not in order to qualify himself as a participant in the drawing — for participation was free — but voluntarily. His purchase would not enhance in the slightest degree his chances upon the drawings. Participation in the drawings could not become for him a gambling tendency. There was nothing that anyone could do that would improve his prospects of winning . In order to participate in the drawings it was not necessary for anyone to spend a nickel in the store or in any other place. Tickets for the drawings and tickets to the parking lot (where the drawings occurred) were not for sale. They were free. Anyone who wished to do so could enter the parking lot and watch, free of charge, the drawings take place. This promotional scheme is a mere means of drawing customers to the plaintiff's stores . The scheme is not a lottery although the prize money is distributed by chance. It is not a lottery because there is no consideration which is in any way harmful to the participant. The participant parts with nothing of any value to himself.
The court in that case also observed that nothing can be regarded as consideration unless it is so viewed and treated by both parties, and that, where no purchase is required to participate, neither party to the transaction believed the customers efforts in participation constituted any valuable consideration.
To find that the effort required to pick up or obtain a card and disc from Albertson's alone is valuable consideration would invalidate any distribution-by-chance scheme for any property whatsoever where the participant is required to expend the slightest effort — mailing of a registration ticket, for example, or presence at a drawing. The "consideration" paid by Double Cash Bingo players would appear to be indistinguishable from that expended by participants in any number of drawings and distributions conducted in this state. Without more, the "valuable consideration" required by our statute cannot be said to have been paid or required, and the scheme does not constitute a "lottery" prohibited by the Utah Constitution.
WILKINS, and HALL, JJ., concur.
. This section was previously designated Section 28.
. 29 Utah 2d 452, 511 P.2d 725 (1973).
. The majority includes Alabama, Arizona, California, Colorado, Illinois, Indiana, Maine, Michigan, Minnesota, Montana, New Hampshire, New York, Ohio, Oregon, Rhode Island, and Texas. The minority includes Delaware, Florida, Iowa, Nebraska and Oklahoma. See 29 A.L.R.3d 888.
. 233 Or. 272, 377 P.2d 150 (1962).
. Examples include the common everyday drawings conducted on local television, at church and club socials, as well as state drawings conducted to distribute sporting event tickets or game licenses, all of which we can properly take judicial notice under Rule 9, U.R.E.