           -E      ATTOICATEY          GENERMC.
                        OIF TEXAS.:             '.,,
                        AUS+IN~ TEXAS~


                        April   13, 1948 .'

    Hoti.Lloyd King             Opinion No. V-544.
    District Attorney
    47th ~JudicialDistrict      Re:   The legality of the
    Amarillo, Texas                   contest type theater
                                      attendance stimulator
                                      plan known as "Bank
                                      of Knowledge".
    De&   Sirs:'                                  .
              Your letter of January 12 encloses data des-
    criptive of a plan t.odistribute priaes,by question and
    answer contests, The plan is denominated "Bank of Know-
    ledge". The general scheme of the plan is outlined and
    sample questions and answers used in a motion picture
,   theater at Childress, Texas, are enclosed. You state:
               "The operation of the plan is self-
          evident from the attached instruments and
          exhibits, and appears to be a question
          and 'answerprogram similar to the Dr. I.Q.
          program except that the entire audience
          participates and there is only one award
          given rather'than .severalawards. There
          is no selection by chance or by lot or by
          any type of device as to who may partici-
          pate in answering the five questions. Any-
          one in the theater may win the award."
                Your particular question is:
               "Does-the ope,rationof the'.Bankof
          Knovjledgeconstitute,a lottery under the
          laws of the State of Texas?"
                The plan purports to operate essentially as
    follows:
              A substantial cash prize is posted by the the-
    ater and all in attendance at the theater may participate
    in the contest to win the prize'. If no prize winner is
    selected, the prize for the subsequent contest is in-
    creased. Regional and~national contests are contemplated
                                                                  .   I




398
      Hon. Lloyd King, Page 2,   v-544.


      but a description of them is not contained in your lettel
      or the data submitted. At the local contest, up to five
      questions are asked from the stage. Following each ques-
      tion, a number of answers are read from the stage and eat
      answer is given a letter designation. The contestants
      hold a card upon which appears a number of letters corre:
      ponding to the various answers to each question. Bach cc
      testant is to punch the letter which he bdieves corres-
      ponds to the correct answer to each question. After the
      contestants have punched answers to all five questions,
      the correct answer to the first question is announced, al
      those answering the first question correctly are to stanc
      the remainder to remain seated. The answer to the seconc
      question is then announced and those missing it are to bc
      seated. This process is continued until all are seated
      after the announcement of the answer of the fifth questic
      or if one remains standing he wins. If more than one is
      standing, some additional questions are asked and the prc
      cess of elimination continues until a winner is.chosen.
      If, however, no one answers the first five questions cor-
      rectly, no winner for that contest is chosen. 13 is on11
      in the event that more than one complete the first five
      questions correctly that the process of elimination is
      continued until a single winner is chosen.
                The first five questions used in the perform-
      ance ref.erredto are as follows:
      QUESTION NUMBER ONE: Designate then President of the
      United States that organized the."Rough Riders". Was
      it: (A, Stonewall Jackson) L (B John Quincy Adams) -
      (C, Theodore Roosevelt) - (D,~Wiiliam Howard Taft) -
      (E, Woodrow Wilson) - (F, Ulysses S. Grant)?
      QUESTION NUMBER TWO: In what year did Babe Ruth hit
            home runs? Was it: (A, 1921) - (B 1923).- (c,
      3)    - (D, 1927) - (E, 1929) or @, 1931b

      QUESTION NUMBER THREE: 'A method of what is called the
      bertl-1lon system? Is it: (A, shorthand) - (B,,crimi-
      nal identification) - (Ci transportation ) - (D, blind
      reading) '- (E,~horse racing ) or (F; yachting)?
      QUESTION NUMBER FOUR: About how many persons had crossec
      the ocean by air before,Lindberg,made his solo fli ht?
      Was it: (A, none) - (B, 4) - (C, 24) - (D, 42) - 7E,64)
      ox- (F, 104)?
                                                      399 ,;
 Hon. Lloyd King, Page 3,   V-544.


  QUESTION;NUMBER FIVE: Th,e'lstterR.with:a~,line drawn
  through the tail,at the~top of a,doctorls~.pres.cr$pt$en
"{blank means: (A, prepare) - .(B,mix well),:-;.l(!:,::atten-
  tion) - (D, I prescribe) - (E;keep cool) or .(F,~recipe)?
            Questions for elimination in.the;event of a
  tie; t;';at
            is; in the event more than one.personan~swers
 .a11 five of~the,foregoing questions correctly, are:
:
  Who was bid'Hickory?          Answer..,
                                        - $;;kzn..
  ‘#ho~invented,the.steamboat?    *
-Nhat.isswiss~ chard: :.,         1,      : A'vegeiable.
            Article'~
                    65.4 'ofthe.Penal Codes prohibits.the
  establ~i&m+nt of a'loitery. The statute'contains no
:.defin&ion of a lottery but + this connection 2g Tex,
  J@fh.409;   410 contains the foll,owi,ng
                                         statement:
              "The term lottery has no. technical
      ....e&&fication in the law, and s,ince'our
 .    _ statute does'~notprov'ide.a.definition,
        ..itsmeaning must be~determined from popu-
       .le,rusage. According to that test a lot-
         tery isa. scheme for the distribution of
         prize,sby lot .or chance among those who
   ,...:',ha,ve.paid
                   or,.agreedto pay a consideration
         for the,right to participate therein,~.or
        :the distribution itself."
          -In,order to,constitute a lottery it is ..gen-
 erally considered that three elements must'be resent.
 They,are:, .(l) consideration;~(2) prize; Andy P3) chance.
 34 Am. Jur. 647,:648.,  The main question involved here
 is whether or not the element of chance'exists in such
 a degree as to make the plan illegal, it being conceded
 that consideration land prize are,present.'
           Two former opinions of this office.are perti-
 nent to 'your inquiry?,both'of ,tiich,are attached hereto
 for reference. Opinion No. V-238 involved a plan known
 as "bonanza"    It was there considered that if the ele-.
 ment of .chaniepredominated over,the element of skill,
 the other elements being present, the scheme was a lot-
 tery. "Bonanzaflinvolved the distribution of tickets
 on the.,back.cofeach of which was printed a question.
 Eac~hticket was numbered. A d,rawingwas conducted and
 those holding lucky numbers.were offered an opportunity
 to answer t~he,question onthe back of their ticket. If
 the question ,wasanswered,correctly, the lucky,person
    Hon. Lloyd King, Page 4,   V-544.


    mightthen answer one or more of ten additional ques-
    tions, and for each correct answer a prize was given.
    It was there held that chance predominated over skill
    and.the plan was held to be illegal.
              In Opinion No. O-1789, this department passed
    upon the legality of a theater program known as "Dr.
    I. Q.". The "Dr. I. Q." ~ogram was conducted by select-
    ing from the audience a number of persons, each of whom
    was asked a series of questions similar,to those above
    set out, and prizes were offered to each person indivi-
    dually dependent upon his correct answers to such ques-
    tions. In the "Dr. I. Q.v program, there was no contest
    between the various members of the audience. There was
    nothing to indicate that participants were selected by
    a drawing. On the authority of Boatwright v. State,118
    Tex. Cr. R. 381, 38 S. W. (2d) 87;hereafter discussed;
    McRae v. State, 46 Tkx. Cr. R. 489, 81 S. W. 741; and
    Hoff V. Daily Graphic, 230 N.Y.S. 360, 103 A.L.R. 870,
    dealing with the question of skill v.,chance, it was
    determined that the "Dr. I. Q." program did not violate
    the lottery81aws of this State.

2             In Boatwright v:State, supra, the Appellant
    was convicted of operating a lottery. He had exhibited
    a punchboard from which might be punched a checker prob-
    lem, the solution of which would require skill in check-
    er playing. The exhibitor held the key to the better
    solutions and customers were allowed to take the problems
    home and work them out, presenting his solution to the
    exhibitor of the board who, if the solution was the best,
    awarded a prize. -The exhibitormightrequire under that
    schenie.notonly the best solutioti~~butthe quickest and
    the neatest. The Court in that case said:
              RIt is observed that the success of
         t~heplayer in the game under consideration
         depends upon practice, experience or skill.
         Other than the ordinary chance or contin-
         gency which isinvolved in practically every
         human endeavor, the element of chance is
         not present. The priae is drawn as a re-
         ward for the skill of the player,'and not
         by chance. The predominant element in the
         game"is one of skill. There is no more re-
         semblance to a'lottery in the game than
         there is in the operation of the knife rack
         described~in McRae v. State, 46 Tex. Cr. R.
         489,.81 S. W. 741.~ In'that case, in holding
.   .


                                                          ,"      ,"
         Hon. Lloyd King, Page 5,    V-5&.


                 the,game.not within the .inhibition~of the,,.stat-
                 ute .denouncing lotteriesi Judge Davidsonsaid:.
                     .~
                      GcThe'evidence .disclosesthat it was an
                 ordinary knife rack, whichconsisted 'ofa'.slop-
                 ing:board and arranged so that rings could be
              ...thro~ and lodged upon.the ,kriives;   and when the
                 player +@s fortunate enough to~~throwone.of
                ,:.these..r&ngs,around.a knife, or catch itson a
          . ~..~.kni.fe;~:'the,knife becamehis ,property. . ,.'...
                                                               .A
                 lottery is commonly understood as.a,,"schemefor
                 the.distribution of prfzes by lot or chance, es-
                 pecially a.gaming scheme in which,one or more
               ...tickets' bearing particular numbersdraw prizes "
          , '~and.the rest.of.the tickets are blank."...There,'
         ,.      were notickets distributed'under the scheme,,,
           ;-...as.:shown   in'the testimony'but rings were sold,
            .:'. andthethrower      of the.rings took chances as tc
          ,/‘:'~whethe'r‘he    could incloseoae of the knives by
             .,I..
                 one..pf.therings..& thrown, and.the..succesa'   of',
            .;:.,the  pitche'rdepended upon hfs .practije,~exper-
                  ience, or skill. :Jedo not believe-it was-la
                  lottery.'",
                  .:;.~,Y                              .I : ~.
         ; :..:.,,::,. :The.Court then cites'a number of caseswhich
        -:had passed~upon,the.~identicalchecker~game punchboard.
        ,.~The~:Court.then    quotes from Johnson V. McDonald?-132 Ore.
          622:..-.287.Pat,.:220, 221; as-follows:
                 ,~ US.'.~.~,
                    i:.;'~~Itwill be seen from the directionsthat
                 the prize is'drawn, not by chance, 'but as a'red'
                 ward.fcr the .skill.ofthe'person claiming the .'
                  prize, If there is any’c+demhnt of ,chance at
                  all about the device,'it is in the.drawing'of
                  the problem: Any woblem drawn requires the
                  solutionof th.egame'of'checkers'pre8ented by
                  that particular problem.,'From the directions.
                  given with the Advertoshare.problem checker&,
                  boards:we~:.learn that the problem is the cample-
                  tion-of..a.game.of checkers thathas beenpart-
                  iallyjplayed. The device was,invented by a fa-
                  mous checker player. So far as it ishumanly
                  possible,'the seve~ral.problemsare of equal dif-
                  ficulty. No distr~i~bution   of prizes is made by
                  chance'or lot.~ Gambling'does.nothave'any place
                  in the:game as itis intended to be played~. The
                   rizesoffered are trivial, and'do not offer any
                  .$nducementfor one to.purchase an oppartunlty to
                  play the game.
Hon. Lloyd King, Page 6,.   V-544.



           "There is no more resemblance to a lot.-
     tery in the scheme than there is in a game.
     of billiards or of cards where such games
     are played in a public place and charges are
     made for the privilege of using the billiard
     tables or card tables. The predominantele-
     ment in the game is one of skill.
     would not appeal to my one who did=-y%
                                          not 1 e
     to play checkers. There is-no apparent .llke-
     ‘Iihoodat all that the game, if played as
     designed. would cultivate a spirit of gambi-
     w       (Emphasis supplied)
The conviction was reversed because the game was held
to be one of skill and not of chance.
          In Hoff v. Daily Graphic, 230 N.Y.S..360, ref-
ferredto above, the contest involved the selection of
play titles, appropriate to drawings published $n the news
papers and it was held that though,the solution involved
chance to some extent, it was pretiminately'a contest of
judgment and taste.
          In Rouse v. Sisson, 199 So. 777, 132 A. L. R.
998, by the Supreme Court of Mississippi.ln 1941, the
Court considered a mechanical device which flashed a ques-
tion upon a screen upon the deposit of a nickel into the
machine. The machine then exhibited a number of alter-
nate questions and the player was given a~number;of see-.
onds in which to punch a key corresponding to what he
thought was the correct answer. A prise~was awarded if
he punched the correct.key. Such a machine was held to
be a game of skill rather than chance and was held to be
legal.
          Attempts'to exhaustively examine the nature of
"chance".as .contemplatedby the laws of this country sup-
ressing lotteries could easily lead us into,an obscure
discussion throwing more shadow than light upon.the prob-
lem. The better approach is to ~look at the scheme as a
whole;:its purpose and the natural tendencies of those who
conduct it and participate therein.
          We quote from 34 Am. Juris., page 656:
          "It has been said that no sooner is the
     term *lottery'.defined by a court, than ingen-
     uity evolves some scheme within the mischief
     discussed;although not quite within.the let-
     ter of the definition given; but an examina-
     tion of the many cases on the subject will show
          Hon. Lloyd King, Page 7$       V-544.    .~:


                    that it his very difficult,.if not im
                    sible, for the most ingenious and-suf?-
                                                          tie..~.-;'
                                                               "'
                    mindsto,devise..'anyscheme o'rplan,,short   .:
                    of a~,gratuitoua,distri~butionof prope.rty;~
                                                               '..~
                    which hasnot.bean.held by the'courts of'
                    this country to,be in vio.lation.o.fthe:lotr~~
                    tery laws in .forcein the,various:states of-
                    the:Uuion.. ;Ihe court will inquire,,not .in-.
                    tb'th&name, but into the..ganu?$ however skil-
                    fully'disg;u'ised,in order to ascertain if
                    it'is'prohibited,,or if it has'the ~eiement~
                    of'chinde..T1-:(Emphasissupplied)
            :From 3~4:Am...Juris!9 page 647; wee quote:.
                                      .~
           ~.Where,the term ~(lotterylis.not,de-
  ,,.
   ! 'finedby. statute.directed against.-itjit
       .hae,.beenstatedthat.a definition which ,in-
,'     eludes as an elementthe evil.which the- stat-
,.-*   ute was. intend.edto prevent must be adopted.."
>,. ..i-@aphasis supplied) :';      .__   '_I_.".     .,
                                                     I
             From the leading c&eof"State      v.~ Glob&Democrat
  Publishing1 Company,,341: MO..,862,  110,3..W. ,(2d) 705, 113
  A&R,.?:1104; ye quote:
     ._     ,=      _,:.‘I   :           .I   I,

/   ;’     ~‘-,‘.
                  ,:.Y"It ,is impossible-to harmonize ,a11
           .,.  the~cases.    But we draw~.the~.conclusion ~~
             .,..from them thatwhere:a contest is mult-
                iple:.,or.serial,.,and:requiresthe.solution
                of:a number of problems to win the,priie; :
         :      the..fact.thatskill alone will'bring con-.
                testsnts to a:;correct~ solution~'ofa great-
               ,er part of the'problems doesnot make.tlie
               ~cont8st.eny~th8 less a lottery ifchance'
                enters.into the solution of'another.lesser.~ '~
                part of the'problems,and thereby~.proxim8te-~
         :     ~.ly-influencesthe ~final result. : Inother
               .words,,the rule t&t chance,mustbe the .dond:,~
               ~n&.factor is,Yto~,be.taken   in a qualitative
                ore causative sense rather than a quantitative
                sense. This was directly decided in Co1e.s
                v::Odhams Pre,ss,,Ltd.:, supra, when it ~w8.s
                held the question was not.to be determined
                .onthe basis of.the'mere proportions of skill
                land chance.entering.,inth,econtestas 'awhole.
                                     ..
                    _ '!.'.'
                           o 'O,,In.the‘instant
                                              case,it stands.:
                c.oncedeithat at the beginning of ,the 'Fam-
                ous.Names' contest the cartoons were compara-
                tively simple and the list of suggested titles
;r
     240~,,,   .
                   Lloyd King, Page 8,   v-544.



                   was short.  This made the conte~stinviting
                   to entrants. But towards the end the car-
                   toons became more 'Subtle' and as many as
                   180 titles had to be considered.' It was a
                   weeding out process, undoubtedly; and, if
                   chance inhered in the solution of these lat:
                   ter cartoons, though only a few of them,and
                   eliminated a large number of contestants,
                   then it must be said,the result was influenc-
                   ed'by chance.
                          "Further, we are convinced the question
                    whether the element of.chance was present
                    must be viewed from the standpoint of the
                    nearly 7O;OOO persons who entered the con-
                    test in response to the advertising thereof;
                    and that itis not to be measured byeany ab-
                    sol.uteor technicsl standards.' As was said
                   ..in Coles v.~Odhams Press, Ltd., supra, 'the
                    competitor is the person to be considered'.~
                    In the instant case the public was informed
                    that any one might win; that no special skill,
                    training or education was required; and that
                    an opportunity was offered to gainsome 'easy
                    money'. It is true reference to the possibil-
                    ity ofchildren's winning was omitted from the
                    later advertising. but aside from that hope
                    was held out to <he general public.. That-be-
                    ing true, whether chance or skill was the de-
                    termining factor in the contest must depend
                    upon the capacity  of the general public--not
                     experts--to solve the problems presented.-
                         nTh8.respondent's thedry is that the in-
                    terpretation of rebus puzeles.is a science;
                    and that, since they can be solved by the ap-
                    plication of these scientific principles, the
                    elementof chance is absent. 'Some of the deci-
                    sions lend support to that view, such as Hudel-
                    son v:~State, supra,~Stevens v:Times-Star Co.,
                    supra, and Waite v. Press Publishing Asstn.,
                    supra. All of these cases conceded an expert
                    might more nearly than a~nonexpert approach a
                    solution of the problems they were considering,
                    and then swept away that concession by saying
                    that nevertheless there remained unfathomable
                    elements in the problem which nobody could
                    solve. This might be taken to mean that, if
.   -


        Hon. Lloyd King, Page 9,   ,V-544.    :   '~


             contest ~problems'
                              can be solved-at.&11 chance
             is eliminated. And the fadvertosharei check.-
             er game‘cases seem-to partake of 'thattheory,
             though:-there,ispossibly~an allowable“di$tincY~
             tion;there,                   :.

               .~.
                 '-ykut~'suchis .notthb trtiegeneral rule..
              As.was -said,in,PeopIiex.rel; El'lisonv. Lavin,
              supra,:if a"contest W8r.e solaly b.etweenexpe,rts,
              possibly elements affecting'the result which no
              one could fores'eemight.:&eheld dependent upon
          .. judgmenV,'but.not so whenthe contest'is unres-~
              trictedi' '&at 'is-a,matter.of.chancefor one'
            ; man'may"not'be -for another: And as Mr. Justice
              Holmes said in Dillinghan v.,'McL&ghlin, 264
              U:X:370,~ -373, 44 S:Ct.. 362;363, 68.L. Ed.
              742, .r,whatAmman does'not-knoti,,apdcannotfind
              out ischance as.'to~ him,~aridis recogn$&i as
              .chance'.by,
                         the lati.~,l-
                                   +~'
                                     Obviously,,,ifsome'ab-'~
              stl'~ce.pr~bl,em~co~~arable'~'~ttd'~t~he.~~~~st~in
                                                           the-,
              ory weresubmitted to the general'.publicin ,a
              ,.prize.,conte.st
                             on 'the r'epresentationthat 'no
              spe~cialtraining or education would be requir-
              ,edto 'solve~.it;,"the':
                                   contention 'couldnot 'be
              made; after contestants 'hadbeen 'inducedto
              part ~Gith:'theirentrance monejr,,that-:~theele-
              ment'of Wiance~'was.'absent 'bectiuse'there
                                                        were
              a ,f,ey
                    persons ~,inthe tirld-tihopdssessed.the
              .le~r~~~g,necessa~'to unde~rstand, it,..*~.(Em-
              phasis~supplied]. '.~. 1.;'.
                   .From,the authorities cited~,it is ahparent
        that the manner in which the questions are presented
        and the'nature of such questions willcontrol as fact
        issues ineach. contest as to'whkther the contest or
        any controlling 'poH5o.nof .it'is.redu'cedt'o'mere guess
        or chance. '~It is impossible for us to say that in all
        conte.stsunder the: Vank ,of"Kno'wledge" plan'inerechance
        and.guesswill~.be dominantand therefore illegal, or
        that:.skill'andknowledge will be dominant'sndtherefore
        legal.,.,:._': ','_.-, "
             .. .- .~;,-,
                 * :The par%icular questions submitted with your
        repuest:as:the ones to:be used in the first performance
        appea~rto.':present a contest based primarilyupon skill
        and knotiledgerather than upon chance. If all the con-
        tests or performances'are based upon similar questions
        and are..conductedin a manner so that skill an'dknow-
        ledge control rather than mere guesses, these contests
        or performances would be lawful.
406
      Hon. Lloyd King, Page 10,   F-544.


                 On the other hand, it is entirely possible
      for "Dank of Knowledge" questions to be so worded that
      one or more of them rest wholly upon pure guesses in
      so far as practically all of the'participants are con-
       cerned. In such case the scheme may fall within the
       class condemned by such cases as Stevens v. Times-Star
       co., 73 N. E. 1058, wherein the contest involved an
       estimate of the number of votes to be cast for Secre-
      tary of State of Ohio in a particular election; People
      v; Lavin, '71 N. E. 753, wherein the contest involved
       an estimate of the amount ,oftax to be paid the United
       States Government upon cigars- or White v. Press Pub-
      lishing Association, 155 F. 5$, another contest involv-
      ing an estimate of the votes to be cast in a president-
      vial election.
                 The letter opinion on this subject by Frank
      J. Delaney, Solicitor of the Post Office Department,
      February 6, 1948,  recognizes.that the circumstances of
      each separate contest or performance are controlling.
      After outlining~the procedure to be followed in the
      first performance, the Solicitor says:
                ~*Whenconducted in.accordance with
           the above dutline, and employing *8S-
           tions of such a nature as not to require
           the contestants to guess at their car'-
           rect answers, matter relating to this
           plan would appear to be acceptable for
           mailing insofar as Section 601, Post&l
           Laws and Regulations of 1940,  is concern-
           ed.".
                Obviously we cannot anticipate the type of
      questions which wili be used ,in subsequent programs.
      Therefore, we cannot categorically stat8 that the "Dank
      of Knowledge" plan is as a matter of law a lottery or
      not a lottery. The question of whether chance predomi-
      nates over skill cannot be determined abstractly, but
      depends on the circumstances of each separate contest
      operated under the plan. The plan.can be operated so
      as not to violate the law. Likewise, it can be oper-
      ated in such a manner as to be unlawful. Each contest
      thereunder will present a separate fact situation which
      cannot be prejudged as a matterof law.
                              SUMMARY
                 Whether the theater'question contest
            plan knckvnas "Bank of ,Knowledge"is.a lot-
            tery and violates Art. 654, V, P. C.,,is
.   -

        Hon.   Lloyd King, Page 11,   V-544:


               a question to be determined upon the facts
               and ,circumstancesof each contest and can-
               not be.determined abstractly as a matter oft
               law.. If conduct of the contest and the an-
               swers to a given set of questions are depend-
               ent primarily upon skill and knowledge rather
               than upon mere chance, the contest 1,slawful.
               On the other hand, if any controlling portion
               ofta contest calls for'and is'dependent upon'
               pure guesses or chance, it is a lottery and
               is therefore unlawful.
                                      Yours very truly
                              ATTORNEY GENERAL OF TEXAS




                                               Assistant
