Court Opinion

ID: 3719612
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:51:10.347302+00
Date Added: 2024-06-11T18:01:10.885326
License: Public Domain

Reference is to the decision of Duffey, P. J., for the basic facts necessary to this decision.
Counsel for the appellant suggest that the outcome of this case will encompass a broad sweep and "will determine the legality or illegality of all promotional give-away games in the state of Ohio." However enticing such a suggestion might be, counsel must be reminded that the case on for review by this court involves a clearly-defined and limited question concerning the "promotional" games "Race to Riches" and "Pepsi-Cola Bottle Cap Promotion," as found upon the premises and operated through the sales channels of a permit holder, The Kroger Co. From the modest game of "Cash-in-a-Flash," wherein a customer of an oil company can win up to $3,000, through the gamut of thousands of prize-winning devices, or "giveaways," including a cut of the $299,000 available from the Reader's Digest Holiday Sweepstakes to the luxury game *Page 47 
"Win a Clean Sweep," in which Lysol Toilet Bowl Cleaner provides a chance to win free food, free drugs, a bank account and a new house — all would enjoy a finding that they were not "lotteries" or not "gambling," but they are not litigants in the instant case which concerns the operation on permit premises of the "promotional" games named in this case.
The allegations in plaintiff's petition indicate that the action filed in Common Pleas Court was prompted by action taken by the Director of Liquor Control before the Liquor Control Commission to secure revocation of the permit held for its supermarket at 675 Harrisburg Pike in the city of Columbus. The basis for the revocation sought was claimed violations of Regulation LCc-1-53 (II) of the Liquor Control Commission. Plaintiff quotes from the charges made by the director as shown in the issued "Notice of Hearing." The charges say that agents of the permit holder:
"* * *did have, keep, and/or possess in and upon or about the permit premises, a paper, to wit, a race card, which may or can be used for a chance on the result of a contest * * *."
The language used in the second violation charged is somewhat different:
"* * * did allow to be kept or exhibited in and upon or about the permit premises, devices, to wit, Pepsi Cola `joker' bottle caps, which may or can be used for gaming or chances on a contest * * *."
Both charges indicate violation of Regulation 53.
The proceeding started by the director is still pending. Plaintiff elected, during the pendency and before a hearing, to begin a proceeding in the Common Pleas Court to secure an injunction against the director to prevent disposition of permit requests, filed and to be filed, and also for a declaratory judgment finding "that the promotional activities" of the plaintiff are not in violation of Regulation 53 and to issue an order restraining the director from applying the Regulation 53 to the "promotional activities" of the plaintiff. The decision of this court in International Breweries, Inc., v. Crouch, Dir.
(1963), 118 Ohio App. 202, approves the use of declaratory judgment *Page 48 
procedures when the interpretation of a regulation is the issue.
Consideration is directed to Regulation 53, Section II, as the focal point in this review. It reads as follows:
"No person authorized to sell alcoholic beverages shall have, harbor, keep, exhibit, possess or employ or allow to be kept, exhibited or used in, upon or about the premises of the permit holder of any device, machine, apparatus, book, record, forms, tickets, papers or charts which may or can be used for gaming or wagering or the recording of wagers, pools or chances on the result of any contest, or allow or conduct gaming or wagering on such premises on any game of skill or chance. * * *"
It is well to note that the regulation does not use the term "lottery."
Reduced to terms applicable to the charges lodged against the agents of Kroger in the instant case, the regulation reads:
"No person authorized to sell alcoholic beverages shall have, * * *, upon or about the premises of the permit holder any device, * * * tickets, papers or charts which may or can be used for gaming * * * or the recording of * * * chances on the result of any contest, or allow or conduct gaming * * * on such premises on any game of * * * chance. * * *"
The trial court and counsel, in briefs and argument, devote much time and space to analysis of lotteries and gambling. In simple terms, the regulation provides that a permit holder may not have on permit premises materials or devices which may or can be used for gaming or for the recording of chances on the result of a contest. Neither may a permit holder allow or conduct any game of chance or skill on the premises. "Race to Riches" and "Pepsi-Cola Bottle Cap Promotion" unquestionably involve the element of chance. The former involves chance on the result of a contest, and the latter is "gaming" — to participate in a game of chance for a prize. In counsels' discussion of the necessary element to support a charge of gambling, or a lottery,i. e., prize, chance, and consideration, it is essentially conceded that prize and chance are present in all so-called "giveaway" games. Debate centers *Page 49 
on the element of consideration. If the invitation, issued by counsel for the appellant, to pass upon the character of all the "giveaway" games contained in the "Appendix to Brief of Amicus Curiae," and to determine if they constitute gambling or a lottery, were accepted, the presence or absence of "consideration" might become highly involved as well as important. The problem is simpler in the instant case. It involves the question of the power of the liquor department and commission to regulate, and specifically the question of the regulation of permit premises, to the extent of forbidding a game of chance, or the contrivance to operate it, on such premises.
Statutory authority for the making of rules and regulations by the commission is supplied by Section 4301.03, Revised Code. Subsection (B) authorizes regulations "in detail" for the conduct of any business authorized under permits issued with a view to insuring compliance with applicable statutes "and the maintenance of public decency, sobriety, and good order in any place licensed under such permits."
Perhaps the Legislature must speak as to the concept of "public decency, sobriety, and good order." It has done so in Chapter 2915, Revised Code, a criminal statute and, therefore, not involved here, directed to "Gambling." Section 2915.12, Revised Code, needs special attention in the instant case. It prohibits within the state the establishment, etc., in detail, of a lottery "or a scheme of chance, by whatever name known." The "scheme of chance" is clearly distinguished from "a lottery," for whatever purpose the Legislature may have had in mind. Also included in the prohibitions in the section is the requirement that any individual may not "by any of such means, sell or expose for sale anything of value."
There are frequent references in the statutes to a lottery "or scheme of chance."
Section 2915.10, Revised Code, says that a person may not "dispose of a ticket, * * * or device for or representing * * * an interest in a lottery or scheme of chance." (Emphasis added.) Advertising of a lottery "or scheme of chance" subjects an offender to possible fine and imprisonment under Section2915.19, Revised Code. *Page 50 
It would appear that the Legislature has spoken with sufficient clarity to indicate that gambling, which includes a scheme of chance, is opposed to public decency and good order.
Basic authority for the regulation of the conduct of permit business "in detail" stems from Section 4301.03, Revised Code. Other statutes specifically regulate some phase of the business, or authorize such regulation, typical of which is Section4301.211, Revised Code. The courts have spoken in general and specific terms also.
An early case, State, ex rel. Zugravu, v. O'Brien (1935),130 Ohio St. 23, held in paragraph one of the syllabus:
"Within constitutional limitations, the General Assembly may, in the exercise of the police power, limit or restrict, by regulatory measures, the traffic in intoxicating liquors."
The court also said that permits are revocable and create no contract or property rights. In Neil House Hotel Co. v.Columbus (1944), 144 Ohio St. 248, the court made a similar statement as to police power in a case in which a regulation (No. 30) of the board conflicted with a city ordinance. The regulation was held to be proper and controlling.
Emphasizing the personal character of a permit, the Supreme Court in Abraham v. Fioramonte (1952), 158 Ohio St. 213, at page 226, makes an extremely broad generalization as to control of permit business, as follows:
"* * * It is uncontrovertable that the sale of intoxicating liquors is a business completely controlled in Ohio by legislation. It is not an ordinary business in which individuals may freely engage."
In a more recent case, Solomon v. Liquor Control Comm.
(1965), 4 Ohio St.2d 31, concerned with specific statutory rules or commission regulations, generalizes concerning the nature of the liquor business, as follows:
"* * * Because of the harmful potentialities incident to the conduct of such business, those engaging therein must obtain a permit from the state and by rules and regulations adopted and promulgated pursuant to statutory *Page 51 
authority by the Department of Liquor Control, the regulating and supervising agency created by the state to oversee and police, as it were, the liquor business.* * *"
Courts have also spoken concerning specific regulation of phases of the liquor business. The question of delegation of the power to make regulations conferred by Section 6064-3, General Code (forerunner of Section 4301.03, Revised Code), was considered by the court in Coady v. Leonard (1937), 132 Ohio St. 329. A board regulation (No. 43) controlled advertising of beer and intoxicating liquors. The court held, in paragraph one of the syllabus, that the authorizing statute:
"* * * confers only administrative power on the Board of Liquor Control and is not violative of Section 1 of Article II
of the Constitution of the state of Ohio, as a delegation of legislative power."
It further held, in paragraph two of the syllabus, that the regulation forbidding the use of a brand name in advertising:
"* * * is a valid and reasonable regulation, is not discriminatory, and is within the power to make subordinate rules and regulations as to advertising, conferred by paragraph `(f)' of Section 6064-3, General Code."
The case of Pompei Winery, Inc., v. Board of Liquor Control
(1957), 167 Ohio St. 61, concerns statutory control of the liquor business and delegation of power to make regulations thereunder. Several pronouncements in the per curiam opinion deserve attention. First, the generalization at page 66, as follows:
"The court notes, however, that the fundamental purpose of the Liquor Control Act in the first instance is to absolutely control the liquor industry in the state of Ohio as a matter ofsocial and public policy, * * *." (Italics in the text.)
At page 67, the court comments on changing social and economic factors as precluding the fixing of rigid minimum prices by the General Assembly. The assembly delegated the price-fixing power, and the court says:
"It is, then, neither surprising nor unlawful that the General Assembly vested the Board of Liquor Control, *Page 52 
which is in constant touch with the situation in Ohio, with discretion regarding this particular piece of legislation."
This court passed upon the validity of Liquor Board Regulation 45 in International Breweries, Inc., v. Crouch, Dir.
(1963), 118 Ohio App. 202. The pronouncement of the court is as follows:
"2. A regulation of the Board of Liquor Control which prohibits `premium or gift merchandising in connection with the solicitation, advertising or sale of alcoholic beverages' is within the powers granted to such board by Section 4301.03, Revised Code, and is a reasonable exercise thereof."
Regulation LCc-1-53 (II), prohibiting any permit holder from having on the permit premises any device, tickets, papers or charts which may or can be used for pools or chances on the result of any contest, or allow, or conduct, on such premises "gaming" on any game of chance, is within the powers granted to the commission by Section 4301.03, Revised Code, and is a reasonable exercise thereof. "Race to Riches" provides chances on the result of a contest. "Pepsi-Cola Bottle Caps" is a game of chance for a prize. It resembles the game common to the political ward meeting to encourage attendance. Everyone who comes to the meeting gets a ticket. Drawings come at the end of the meeting. The prize goes to the one whose ticket is drawn from the hat. The device is a "game of chance" or "gaming" proper at the ward meeting but forbidden by regulation on the premises of a permit holder.
Prize and chance are essential to a "game of chance." Much point is made by appellant concerning the matter of consideration as necessary to a gambling scheme or a lottery. That factor is not necessary to the "game of chance." It is, however, necessary to make it illegal under Chapter 2915, Revised Code, but it must not be overemphasized when directing attention to the ingenious variety, the colorful flamboyance, and the multiple involvements of the law of probability displayed in the modern "games," as the games are interwoven in a complex economy.
Years ago, a small confectioner in the south end of the *Page 53 
city of Dayton displayed on his counter a box of attractive chocolate candy. The children who patronized his store were further intrigued by the fact that you could pay your penny, receive a piece of candy, and, if the cream center were pink, you received a second piece, whereas if the center were white you got only the piece for which you paid. It provided an early introduction to the age-old, utterly fallacious notion that you could get something for nothing. The elements were prize, chance, and consideration.
However elaborate, intricate, colorful or complex the modern game, the elements are still present. The confusing element is consideration, because the modern game is a part of promotional advertising, which fact generates much debate as to who pays. One thing is conclusively sure — somebody does.
35 Ohio Jurisprudence 2d 63, Section 3, discusses lotteries and gambling. At page 64, the text writers suggest that the consideration must be derived directly or indirectly or there is no lottery. Then follows another proposition which reads:
"* * * On the other hand, the strict consideration that is required in contracts is not the kind required as an element of a lottery, and what may appear on its face to be a gratuitous distribution of property or money has frequently been declared to be merely a device to evade the law."
The text goes on to say:
"The element of advertisement and increased patronage is consideration sufficient to constitute a lottery, and where lottery tickets are given with meals, the consideration is adequate."
The classic case in Ohio is Troy Amusement Co. v.Attenweiler (1940), a Second District Court of Appeals case (64 Ohio App. 105) affirmed by the Supreme Court in 137 Ohio St. 460, and is still the law of Ohio. At page 116 (of 64 Ohio App.) the court speaks as follows:
"* * * it does not mean that pay shall be directly given for the right to compete. It is only necessary that the person entering the competition shall do something or give up *Page 54 
some right sufficient to comply with that requirement. Nor does the benefit to the person offering the prize need be directly dependent upon the furnishing of a consideration. Advertising and the sales resulting thereby, based upon a desire to get something for nothing, are amply sufficient as a motive. * * *"
Directly in point is the statement of the court at page 121 (of 64 Ohio App.) as follows:
"The element of advertisement and increased patronage is sufficient consideration flowing to the operator to bring the transaction within the condemnation of promoting and advertising a scheme of chance."
The court notes particularly the argument that some participate without paying. The comment is (page 122 of 64 Ohio App.), "This argument seems to us trivial." An observation follows that the argument might be a defense if one were charged with the criminal offense of gambling "but it certainly can be no defense to one who is operating a scheme of chance."
In the instant case we are concerned with a strictly civil matter not a criminal matter.
The far more basic element in all schemes of chance is noted by the court at page 117 (of 64 Ohio App.) — people must be made to believe that they will get something for nothing. The court says:
"* * * This is the evil in all schemes of chance, no matter under what novel or devious methods they are conducted. * * *"
"Giveaway Games," if in fact they are as counsel for the appellant so contend, incorporate the age-old illusion of something for nothing in the promotional advertising supporting the game and could well be a violation of Regulation 45 as well as Regulation 53. Regulation 45 reads as follows:
"Premium or gift merchandising in connection with the solicitation, advertising or sale of alcoholic beverages is prohibited."
(See, also, Section 2915.12, Revised Code, supra.) Such, however, was neither charged nor argued, although I concur with Duffey, P. J., in holding that the regulation was violated. *Page 55 
In the instant case we deal with chances on the result of a contest and gaming, or a game of chance.