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DAN MORALES
 ATTORNEY
      CENERAL                               May 2, 1995

     Honorable Kenny Marchant                          Opinion No. DM-344
     Chi3ir
     Fiicial  Institution Committee                    Re: Whether persons may play and bet
     Texas House of Representatives                    on card games using computers with
     P.O. Box 2910                                     modems or other transmission devices
     Austin, Texas 78768-2910                          and related questions (RQ-763)

     Dear Representative Marchant:

            You ask:
                        (1) May two or more persons, each using a separate
               personal computer and modem or other data transmission device in a
               private place, play a card game with each other and bet on the
               outcome of the card game?
                        (2) May a third party operating a bulletin board service
               assist persons in playing the card games located on that b&tin
               board service and charge a fee for the amount of computer time and
               processing charges used by the persons playing the game?

                        (3) May a third party operating a bulletin board setvice act
               as the custodian of money placed in escrow with that bulletin board
               service by users of the service for the specific purpose of playing card
               games with other users of the service?

            You qualify your questions as follows:

               For the purpose of this request, “bet” and “private place” have the
               meanings assigned [to] those terms by Section 47.01, Penal Code,
               and the term “bulletin board service” means an on-line computer
               service that allows a person to use the person’s personal computer
               and modem to connect to the service and that offers the person the
               ability to play card games with other users of the service. In
               addition, any actions taken by any party in this request are presumed
               to be taken entirely in Texas by Texas residents.

             Section 47.01(l), Penal Code, provides, with exceptions which do not appear to
     be relevant here, that for purposes of chapter 47, “bet” “means an agreement to win or
     lose something of value solely or partially by chance.” Subsection (8) defines “private
     place” as “a place to which the public does not have access, and excludes, among other
     places, streets, highways, restaurants, taverns, nightclubs, schools, hospitals, and common
Honorable Kenny Marchant - Page 2              (DM-344)




areas of apartment houses, hotels, motels, office buildings, transportation facilities, and
shops.”

        Section 47.02(a)(3) provides that “[a] person commits an offense if he.    plays
and bets for money or other thing of value at any game played with cards, dice, balls, or
any other gambling device.” Subsection (b), however, provides that it is a defense to
prosecution under the section that

               (1) the actor engaged in gambling in a private place;

               (2) no person received any economic benefit other than personal
               winnings; and

               (3) except for the advantage of skill or luck, the risks of losing
               and the chances of winning [the game] were the same for all
               participants.

        The activities described in your first question would appear to be within the kind of
playing and betting described in subsection (a)(3) of section 47.02. The question is
whether the defense to prosecution set out in subsection (b) could be effectively raised.
We do not believe that the facts you stipulate--that the actors are acting in “private
places,” within the Penal Code definition, and communicating bets through data
transmission devices--resolve whether the elements of the dcr::;se are met. Even
assuming that the risks “were the same for all participants,” if t: public generally, or a
significant number of others, had access to the games, such access would, we believe,
defeat a claim that the actors “engaged in gambling in a private place.”

        Whether a place is private for such purposes has been determined by the scope of
access by others. See, e.g., Comer v. Sfule, 10 S.W. 106 (1889) (private room at inn);
Hearh v. Smre, 276 S.W.2d 534 (Tex. Crim. App. 1955) (“We do not think that one might
circumvent the law [pertaining to ‘gambling houses’] by the simple expediency of
extending invitations”). See gerrernlly Howard J. Alperin, Annotation, Gambling in
Private Residence as Prohibited or Permitted by AM-Gambling Laws, 27 A.L.R.3d
1074 (1969). Just as a private residence would not be a “private place” for purposes of
the defense if the public had access to gambling there, neither would it be consistent with
the defense here if, for example, anyone who knew the proper “telephone number” and
had a computer with a modem could join the games you refer to. See, e.g., Morgan v.
State, 60 SW. 763, 764 (Tex. Grim. App. 1901) (private residence); People v. Weithofl,
 16 N.W. 442 (Mich. 1883) (physical presence of bettors at game not required). However,
determining whether the scope of such access here would defeat the defense would require
fact finding.

        Also, if there is a charge attributable to the transmissions by which the players
 communicate, it would appear that other persons would also receive an economic benefit
 from the games, thus defeating the second element of the defense. See Attorney General



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HonorableKenny Marchant - Page 3                 (DM-344)




Letter Opinion No. 90-88 (1990) (no defense where telephoned bets made using either a
credit card or a 900-number).

        Where the defense did not obtain, and the actors were thus “gambling” in violation
of section 47.02, we think that on particular facts they might also be prosecuted under
other sections of chapter 47. See Penal Code ij§ 47.03 (‘Gambling Promotion*‘), .04
(“Keeping a Gambling Place”), .OS (“Communicating Gambling Information”), .06
(“Possession of Gambling Device, Equipment or Paraphernalia”). We note that on proper
facts, courts have upheld, against double jeopardy arguments, convictions under more
than one chapter 47 section arising from one series of events. See, e.g., Rush v. State, 576
S.W.Zd 628 (Tex. Crim. App. 1978&i

        Also, where the activity was an offense under the Penal Code, federal law
criminaliing “transmission of wagering information” in interstate commerce by one
“engaged in the business of betting or wagering,” 18 U.S.C. 5 1084, could also apply.
That the activities in question take place entirely in Texas, as you stipulate, may not in all
cases be sufficient to keep them from having an interstate character under that statute.
See United Stutes v. Yaquinta, 204 F. Supp. 276 (N.D.W. Va. 1962) (where part of
telephone facilities used for call between points in state were located in another state,
transmission was in interstate wmmerce for purposes of section 1084). Even if the
transmissions are found to be in interstate commerce, however, determining whether the
actors in your scenario would be “engaged in the business*’of gamblmg would also require
more extensive fact finding. For instance, cases under section 1084 indicate that while the
provisions do not embrace “social betting,” a person may be “in the business” under the
statute even if only “in business” on his own behalf and even if gambling is not his
exclusive business. See, e.g., United States v. Buboriun, 528 F. Supp. 324 (D.K.I. 1981);
UnitedStates v. Scavo, 593 F.2d 837 (8th Cir. 1979).*

        Your second scenario, where a third party, for a fee, operates a “bulletin board”
service to “assist” persons in playing “games located on that bulletin board service,” in our
opinion implicates sections 47.03, (“Gambling Promotion”), 47.04 (“Keeping a Gambling
Place”),” 47.05, (‘Communicating Gambling Information”), and 47.06, (“Possession of
Gambling Device, Equipment, or Paraphernalia”), if the players bet on the card games,

          *Ott the other band, we note that the facially overlapping nature of such provisions has in the
pasl becn oac basis for sllccesdul wntentions that the provisions were ukawstitutionally vague, that is,
that they did not suflicimtly apprise actors whether conte&ated conduct was kminalized thcmmder.
See, e.g., Adley v. State, 718 S.W.Zd 682 flex. Ctim. App. 1985), cert. denied, 419 U.S. 815 (1986).
Sinocissuesborllastoiheadequacyofnociagivenbyapnalpraision,aadastowhichsgccific
provisions among somewhat overlapping ones are more appropriate for prowcotioo, depend ultimately on
the fbcts of the psrticdar case, we do not attempt to rcaolvcthese questions here.

         *If the activities rise to the level of a “gambling business” involving five or more persons, the
federal provisions in 18 U&C. 8 1955, “Prohibition of Illegal Gambling Businesses,” could also be
implicated. Notably,interstateactivityis not expresslya neassary elementto the section 1955otfensc.
Section1955is discussedin moredetail b&w in nlation to ycur secondand third questions.

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        The term “gambling place” is integral to the portions of sections 47.03 and 47.04
we think are implicated here. Section 47.01(3) defines “gambling place” as “any real
estate, building, room    vehicle, or other property whatsoever, one of the uses of which
is the making or settling of bets.” Section 47.03 makes it an offense for a person
knowingly or intentionally to “operate[] or participate[] in the earnings of a gambling
place.” Section 47.04 makes it an offense if he “knowingly uses or permits another
[person] to use as a gambling place      property.    owned by him or under his control.”
Section 47.04 provides the same defense to prosecution under that section as does section
47.02, ‘Gambling,” discussed above, but since you stipulate that the operator of the
bulletin board service receives a fee apart From “personal winnings,” the defense would
not apply here.

         That the players may not be present at the “gambling place” here does not we think
take these activities out of the provisions of sections 47.03 and 47.04. Notably, the court
in Stute v. Tcrylor, 805 S.W.2d 440 (Tex. Crim. App. 1991). found that a place used for
the “telephonic receiving of bets” was a “gambling place.” We see no distinction here
albeit the transmission devices may also include computers and modems or other means of
transmission than just telephones and telephone lines. The main hurdle to prosecution, on
the facts you stipulate, would rather be proving the requisite knowledge or intent: in
effect, proving that the service operator krew that the players were “‘betting” something of
value on the games. Assuming such knowledge could be shown, we believe the activities
you describe violate either or both of sections 47.03 and section 47.04.

        We note too that, assuming the requisite knowledge on the service operator’s part,
section 47.05, “Communicating Gambling Information” making it an offense, “with the
intent to further gambling,” to knowingly communicate “information as to bets” or to
“maintain[] equipment for the transmission or receipt of such information,” may be
violated as well. It is not wholly clear to us, however, from your description of the
“bulletin board” service here as “assisting persons in playing the card games located on
that bulletin board service,” precisely what the bulletin board devices do. Similarly, again
assuming the requisite knowledge, and depending on how the “bulletin board” actually
works, the activities could fall within the broad language of section 47.06, which in
subsection (c) makes it an offense “with the intent to further gambling” to knowingly
own.      or possess gambling paraphernalia.“’ “Gambling paraphernalia” is broadly
defined in section 47.01(6) as “any.       apparatus by means of which bets.        may be
recorded or registered” or “any record, ticket, certificate, bill, slip,  or other means of
carrying on bookmaking, wagering pools,          policy, or similar games.” Depending on
the facts, we believe that charges might be brought under more than one of these sections
for the operations you ask about. See Rush, 576 S.W.2d 628.




        %ction 47.06 sets out the same defense as section 47.04, which, again, because of the, fee
chargedby the service,would not apply here.


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Honorable Kenny Marchant - Page S         (DM-344)




        In your third scenario you add the element that the operator of the bulletin board
service “acts as custodian of money” placed with him by service users for purposes of their
play. Section 47.03, “Gambling Promotion,” discussed above with respect to your second
scenario, also makes it an offense, in subsection (a)(3), if a person “for gain, becomes a
custodian of anything of value bet or offered to be bet,” We assume here that you mean
that the operator acts as custodian of money from which bets are to be paid, but you do
not indicate whether he does this “for gain.” If he does, we believe that this activity
comes within the offense described in subsection (a)(3). In any case, his acting as
custodian, whether “for gain” or not, would certainly be a strong indication that the
service operator knew the players were betting, thus supplying the requisite knowledge
element with which, as we concluded above, mere operation of the bulletin board setvice
would itself come within one or more of the chapter 47 penal provisions.

         Finally, given the illegality of these activities under state law, federal law at 18
U.S.C. $ 1084, criminalizing “transmission of wagering information” in interstate wm-
merce by one “engaged in the business of betting or wagering,” could also apply, as well
as the provisions of 18 U.S.C. 5 1955, “Prohibition of Illegal Gambling Businesses.” As
noted above in our discussion regarding your first question, while it is an element of the
section 1084 offense that the transmission be “in interstate commerce,*’even transmissions
from one place in Texas to another might, on proper facts, be found to within the section’s
ambit. For the section 1955 offense, five or more persons must be involved in a “gambling
business” illegal under state law; the section does not require specific proof that the
activities were in interstate commerce. See, e.g., United States v. Meese, 479 F.2d 41 (8th
Cir. 1973). Both sections have generally been broadly construed. For example, neither
requires that the actors have themselves placed bets. Cohen v. United Slates, 378 F.2d
751 (9th Cir.) (section 1084 includes “assisting” in placing of bets), cert. denied, 389 U.S.
897 (1967); United Sfufes v. Huwes, 529 F.2d 472 (5th Cir. 1976) (section 1955
defendants need not themselves have gambled).




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Honorable Kenny Marchant - Page 6.        @M-344)




                                   SUMMARY

               Where two or more persons, each using a separate personal
          computer and modem or other data transmission device in a private
          place, play a card game with each other and bet on the outcome of
          the card game, the activities would be illegal under the gambling
          provisions set out in chapter 47 of the Penal Code unless there was
          no “public” access to the games, no one benefited other than by
          personal winnings, and the risk of winning or losing was the same for
          all participants. A third party’s operation of a bulletin board service,
          by means of which he knowingly assisted persons in playing and
          betting on card games located on that bulletin board service and
          charged for the services used by the persons playing the game, would
          violate one or more of the penal provisions of chapter 47, Penal
          Code.




                                                      DAN MORALES
                                                      Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General




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