Court Opinion

ID: 4130119
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:00:28.221482+00
Date Added: 2024-06-11T14:32:30.866640
License: Public Domain

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DAN MORALES
 ATTORNEY
      GENERAL                         November 27.1991

    Ms. Jeannene Fox                            Opinion No. DM-62
    Acting Administrator
    Texas Alcoholic Beverage Commission         Re: Collection of fees for small stakes
    P. 0. Box 13127                             bingo (RQ-219)
    Austin, Texas 787113127

    Dear Ms. Fox:

            You have requested our opinion on several questions regarding the
    collection of fees for certain games of small stakes bingo. You indicate that

             [i]n addition to bingo games played on hard cards and
             disposable paper cards, bingo players also play instant
             bingo. . . . Most of the winners on instant bingo cards are S.50
             or $1.00 winners.

    Bingo is regulated by article 179d. V.T.C.S. A recent legislative enactment added
    section 19b to the statute to provide for the imposition of fees on bingo games. That
    provision states:

             Sec. 19b. (a) An authorized organization licensed to conduct
             bingo shall collect a fee from each person who wins a prize in a
             bingo game.

                        (b) The fee imposed by this section is three percent
             of the amount or value of the prize.

                        (c) A licensed authorized organization shah .report
             and remit the fee imposed by this section at the same time and
             in the same manner as the gross receipts tax under Section 20 of
             this Act.

    Acts lk1,72d    Leg., 1st C.S., ch. 5,s 11.031, Vernon’s Sess. Law Serv. at 184.

                                          p.   312
Ms. Jeannene Fox - Page 2                  (DM-62)

        You first ask whether “instant bingo” constitutes a bingo game for purposes
of article 179d. “Bingo”or “game”is defined in section 2(2) thereof as

            a specitic game of chance, commonly known as bingo or lotto, in
            which prizes are awarded on the basis of designated numbers or
            symbols on a card conforming to munbers or symbols selected at
            random.

Whether a particular game described as “instant bingo” f&Uswithin the definition in
section 2(2) requires the resolution of factual &es that cannot be addressed in the
opinion process.1 We need not address any specific game, however, since the
question you raise about taxes is relevant to any bingo game with small stakes.

       You also ask whether the Alcoholic Beverage Commission may wai\re the fee
on bingo prizes of $1.00 or less. You state that organizations that conduct small
stakes games complain that the cost of hiring additional workers to collect the fee
from small stakes bingo winners would be in excess of what it would cost the
organizations to pay the prize fee themselves and would bring the state a very small
amount of revenue.

        A number of prior opinions hold that a waiver of fees that an administrative
body is required to collect constitutes a suspension of laws, in contravention of
article I, section 28, of the Texas Constitution. In Attorney General Opinion O-
4631 (1942), for example, the State Board of Hairdressers and Cosmetologists
sought to waive the required payment of license renewal fees for those individuals
who were called into military service. In Attorney General Opinion O-6444 (1945),
the State Board of Barber Examiners asked whether it might exempt registered
barbers from payment of renewal fees during their tenure in the armed forces. In
Attorney General Opinion O-6754 (1946), a county clerk sought permission to waive
the $1.00 marriage license fee for members of the armed forces. In each case, the
attorney, general replied that the official was without authority to waive the
particular fee because of article I, section 28. Likewise, we are here compelled to
conclude, regardless of the amount of revenue obtained from the imposition of fees

         ‘A resolution of this
                         qucstioowould also rquire UJto explorethe meaningof “bingo”as that
term wasudersmod by the votersat the timeof the adoptionof the provisionof article 19 section 47,
of the nzcmstitutionauthorizing biio   games.

                                                p.   313
Ms. Jeamrene Fox - Page 3               (DM-62)

on winnings in games of bingo, that the Alcoholic Beverage Commission is not
empowered to waive or exempt the fee imposed on any prize.

        &ally, you ask whether the organization that conducts the bingo game may
itself pay the fee. The answer to this question, theoretically, is “no,”as the following
example will demonstrate. Suppose a bingo player wins $100.00. The statute
assess& the fee on the rotalprire, and, if the organization paid the fee on $100.00,
the total prixe would be $103.00, thus necessitating the collection of an additional 9
cents. In other words, when the fee is paid by the organization, the amount of the
fee must be added to the value of the prize, which, in turn, generates an additional
fee to be paid. However, for small prizes, such as those about which you inquire,
this problem is avoided. We use as an example a bingo prize worth 50 cents. The
total value of such a prize could be transformed into a prize of 52 cents without
generating any additional fee. In this example, the winner receives 50 cents and the
state 2 cents. Likewise, a prize of one dollar could be transformed into a prize of
$1.03, with $1.00 going to the individual and 3 cents to the state. This procedure
works with small amounts because the fee on prizes of 50 cents is the same as the
fee on prizes of 52 cents, and the fee imposed on prizes of $1.00 is the same as the
fee imposed on prizes of $1.03. Thus, adding the fee to the amount paid to the
winner does not increase the amount of fee owed on the rotalprire. With sufficiently
large prizes, however, the principle breaks downl Thus, in answer to your third
question, it is our opinion that while the organization may not itself literally pay the
fee on prizes of 50 cents and $1.00, it may slightly alter the amount of the prizes
awarded to achieve substantially the same result.

                                        SUMMARY

                The Alcoholic Beverage Commission may not waive the
           three percent fee for small prizes awarded in games of bingo.
           Although the organization conducting the bingo game may not
           itself pay the fee, it may achieve substantially the same result for

        %‘ith a three percent fee, the principle breaks down at a point behveen $5.00 and S6.00. The
fcconaSSM)prizcisthesameasafeeonaprizeof~.15,butthefeeona56.00prizcisnotthesame
a6afcconaprizcofS6.18.

                                          p.   314
Ms. Jeannene Fox - Page 4          (DM-62)

         small prizes by slightly altering the face amount of the prize
         awarded.

                                                   DAN      MORALES
                                                   Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

JUDGE ZOIUE STEAKLEY (Ret)
Special Assistant Attorney General

RENEAHICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Rick Gilpin
Assistant Attorney General

                                      p.     315