             TO BE PUBLISHED IN THE OFFICIAL REPORTS


                  OFFICE OF THE ATTORNEY GENERAL

                        State of California


                       JOHN K. VAN DE KAMP

                         Attorney General



                  ------------------------------
                                 :

            OPINION              :

                                 :

              of                 :     No. 87-906

                                 :

       JOHN K. VAN DE KAMP      :      April 20, 1988

        Attorney General        :

                                 :

         JACK R. WINKLER        :

    Assistant Attorney General :

                                 :

  -------------------------------------------------------------


          THE HONORABLE THOMAS W. SNEDDON, JR., DISTRICT ATTORNEY

OF SANTA BARBARA COUNTY, has requested an opinion on the following

question: 


          May a charitable organization lawfully sponsor and

conduct a "casino night" event for which tickets are sold to the

general public where those attending would be given chips with

which to play roulette, twenty-one and similar casino games and the

chips won by the players would be used at the end of the event to

(1) acquire raffle tickets to be drawn for valuable merchandise or

(2) bid at auction for valuable merchandise?


                            CONCLUSION


          A charitable organization may not lawfully sponsor or

conduct a "casino night" event for which tickets are sold to the

general public where those attending would be given chips with

which to play roulette, twenty-one, and similar types of games and

the chips won by the players would be used at the end of the event

to (1) acquire raffle tickets to be drawn for valuable merchandise

or (2) bid at auction for valuable merchandise.


                             ANALYSIS


          We are informed that a charitable organization proposes

to sponsor a "casino night" dinner event to which it will sell

tickets to the general public.    Each person attending would be

given chips with which to play roulette, twenty-one, and similar

types of "casino games." At the end of the evening the players

would use the chips they had won either to acquire raffle tickets

to be drawn for valuable merchandise or to bid at auction for

valuable merchandise.   The merchandise would be donated to the

charitable organization by local merchants.        The charitable

organization would use the ticket proceeds only for charitable

purposes. We are asked whether such an event would be lawful under

California's gambling laws.    We conclude that it would not be

lawful.


                            Background


          California's laws have always placed restrictions on

certain forms of gambling.       Article IV, section 27 of the

California Constitution of 1849 provided that "No lottery shall be

allowed by this state, nor shall the sale of lottery tickets be

allowed."    An act to license gaming passed March 14, 1851

prohibited "all banking games, and games having a percentage" and

made violations a misdemeanor and also prohibited, with the same

penalty, the playing of "the game known as 'French monte' or 'Three

card game,' or the game known as 'Loop' or 'String game,' or the

game known as 'Thimbles,' (a shell game) or the game known as

'Lottery.'" The same act authorized counties to license gaming

houses in which all but the games outlawed by name could be played.


          The   Constitution   of   1879   continued the   lottery

prohibition in article IV, section 26 which provided: "The

Legislature shall have no power to authorize lotteries or gift

enterprises for any purpose, and shall pass laws to prohibit the

sale in this State of lottery or gift enterprise tickets, or

tickets in any scheme in the nature of a lottery." The Legislature

enacted chapters in the Penal Code prohibiting lotteries and other

forms of gaming.


          The Penal Code contains one chapter on lotteries (§§ 319­
328), another on gaming (§§ 330-337s) and another on horse racing

(§§ 337.1-337.9). The chapter on lotteries makes many forms of

participation in a lottery a misdemeanor and section 3271 prohibits

endless chain schemes.     The gaming chapter defines gaming in

section 330 and prohibits slot machines, bookmaking and fixing

sporting events among other things. The chapter on horse racing

prohibits touting among other things.


          The California Constitution has been amended to allow

specified forms of gambling. Article IV, section 19 now provides:


          "(a) The Legislature has no power to authorize

     lotteries and shall prohibit the sale of lottery tickets

     in the State.



      1
       Section reference are to the Penal Code unless otherwise

indicated.


                                2.                          87-906

          "(b) The Legislature may provide for the regulation

     of horse races and horse race meetings and wagering on

     the results. [Originally adopted June 27, 1933 as art.

     IV, § 25a.]


          "(c) Notwithstanding subdivision (a) the Legislature

     by statute may authorize cities and counties to provide

     for bingo games, but only for charitable purposes.

     [Added June 8, 1976.]


          "(d) Notwithstanding subdivision (a), there is

     authorized the establishment of a California State

     Lottery. [Added Nov. 6, 1984.]


          "(e) The Legislature has no power to authorize, and

     shall prohibit casinos of the type currently operating in

     Nevada and New Jersey. [Added Nov. 6, 1984.]"


           From the beginning of statehood, California statutes have

prohibited certain forms of gambling and allowed others. State

statutes on gambling leave considerable scope for local regulation

because the state has not preempted the whole field of gambling

regulations. ( Sullivan v. Fox (1987) 189 Cal.App.3d 673, 678.) 

We assume that no local ordinance is applicable since none was

referred to in the question. Our task is to determine whether the

"casino night" event contemplated by the question involves any of

the forms of gambling prohibited by state law.            Since the

description of the event provided us speaks of roulette, twenty-one

and similar types of "casino games" we assume that the event will

not involve slot machines, horse racing, sporting events, or bingo.

Our analysis will therefore focus on whether the "casino night"

event violates California statutes prohibiting gaming and
lotteries.

                              Gaming

          Penal Code Section 330 defining gaming provides: 


               "Every person who deals, plays, or carries on,

     opens, or causes to be opened, or who conducts, either as

     owner or employee, whether for hire or not, any game of

     faro, monte, roulette, lansquenet, rouge et noire, rondo,

     tan, fan-tan, stud-horse poker, seven-and-a-half, twenty-

     one, hokey-pokey, or any banking or percentage game

     played with cards, dice, or any device, for money,

     checks, credit, or other representative of value, and

     every person who plays or bets at or against any of said

     prohibited games, is guilty of a misdemeanor, and shall

     be punishable by a fine not less than one hundred dollars

     ($100) nor more than one thousand dollars ($1,000), or by

     imprisonment in the county jail not exceeding six months,

     or by both such fine and imprisonment."


                                3.                           87-906

          The crime defined in section 330 has two essential

elements: (1) The game must be one of those proscribed and (2) the

game must be played for money or representative of value. We will

examine each of these elements to determine their application to

the "casino night" described above.


          Section 330 proscribes 12 games by name and two

categories of games denominated "any banking or percentage game

played with cards, dice, or any device," when played as described

therein. Two of the twelve games listed by name are mentioned in

the question, roulette and twenty-one. While many of the games

listed have fallen into disuse all of them are prohibited by

section 330 when played for money or representative of value. The

games listed by name are prohibited by section 330 whether or not

they are played as banking or percentage games. (People v. Gosset

(1892) 93 Cal. 641, 646.) Section 330 prohibits the named games

even though they are played with variations in the usual method of

play. In People v. Gosset, supra, at page 643, the court held

there was no error in refusing an instruction that "faro is played

with a full deck of fifty-two cards." The court stated:


          ". . . , when a prohibited game is played in all

     other respects in the usual way, and according to its

     established rules, the purpose of the law cannot be

     thwarted by the simple devise of playing it with one or

     two cards less than the number usually employed.

     Otherwise no statute against a particular game would be

     of any value."


          A banking game is one where there is a fund against which

everybody has the right to bet, the bank taking all that is lost by

the bettors and paying out all that is won by them. (People v.

Carroll (1889) 80 Cal. 153, 157-158; People v. Ambrose (1953) 122

Cal.App.2d Supp. 966, 970.) "Banking game has come to have a fixed

and accepted meaning: the 'house' or 'bank' is a participant in the

game, taking on all comers, paying all winners, and collecting from

all losers." (Sullivan v. Fox (1987) 189 Cal.App.3d 673, 678.)


          A percentage game encompasses "any game of chance from

which the house collects money calculated as a portion of wagers

made or sums won in play, exclusive of charges or fees for use of

space and facilities." ( Sullivan v. Fox, supra, at p. 679.) A

game may be a percentage game whether or not the house or bank

participates as a player in the game. (Walker v. Meehan (1987) 194

Cal.App.3d 1290, 1299-1301.)


          If one of the similar types of "casino games" referred to

in the question is either a banking game or percentage game, as

those terms have been defined by the courts, which is played with

cards, dice, or any device it is prohibited by section 330 when it

is played for money or representative of value. 



                                4.                          87-906

          Next we consider the requirement of section 330 that the

game must be "played for money, checks, credit, or other

representative of value." In      People v. Carroll, supra, the

information charged the defendant with conducting a banking game

known as wheel of fortune in violation of section 330. The Supreme

Court reversed the conviction stating (at p. 155):


          "The information charges no offense under this

     section [section 330] of the code, or any other.      To

     constitute it an offense to conduct the game, it must be

     'played for money, checks, credit, or any other

     representative of value.'     The information does not

     charge that the game was    played for money, but that

     defendant conducted it for money. It may be that those

     who were engaged in the game were playing for amusement,

     and paid the defendant a fixed sum, in no way dependent

     upon the result of the game, for conducting it. This

     would be within the allegations of the information, but

     it would not be a public offense or within the statute."

     (Emphasis added by the court.)


Thus there is no violation of section 330 unless the players are

playing the game for money or representative of value, i.e., with

the expectation of winning money or representative of value. If

the game is played without any expectation of winning money or

representative of value there is no violation of section 330 even

though the players may have paid something "in no way dependent

upon the result of game" for the privilege.


          In Ex parte Williams, (1906) 7 Cal.Unrep. 301 (Court of

Appeal, Third District), 87 P. 565, the defendant was convicted of

violating section 330 for conducting a banking game by means of a

slot machine which his customers played for cigars. The machine

was operated by dropping a nickel in the slot and pressing a lever

which would cause a cylinder to move and display a combination of

cards thereon.    If the combination appearing was one of the

designated winning poker hands the player received a designated

number of cigars.    For other combinations the player received

nothing.   On habeas corpus the court discharged the prisoner

because the slot machine was played for cigars and not "for money,

checks, credits, or other representatives of value." The court

applied the rule of construction known as ejusdem generis to

construe the words "other representative of value" to be limited to

the same class of things as money, checks and credits. The court

said: "Neither is it plain that the Legislature had in mind any

kind of property other than money, the thing most common for use in

such games, and its representative such as checks and demands for

the payment of money." Finally the court said: "There is nothing

in section 330 which prohibits gambling for cigars."


           In In re Lowrie (1919) 43 Cal.App. 564 the defendant was

charged   with conducting a dice game known as Razzle Dazzle


                                 5.                         87-906

described in detail in the complaint. On habeas corpus the court

held that the game was not a lottery as the complaint charged but

that the facts alleged did constitute an offense defined in section

330 of the Penal Code and remanded the defendant to custody. The

complaint alleged that the game was played with five dice rolled

simultaneously from a cup. Each player would pay the defendant one

dollar and receive ten chips in return. Play began when a player

made a bet by putting one or more of his chips on the board and the

defendant then rolled the dice and counted the number of pairs he

rolled. The player then rolled the dice and counted the number of

pairs he rolled.    If the player rolled more pairs or the same

number of pairs with higher numbers he won and the defendant gave

him the same number of chips he bet in addition to the chips he had

bet. If the player lost the defendant kept the chips that were

bet. Play then passed to the next player where the process was

repeated. When play was over the players purchased merchandise

with the chips they had with each chip valued at ten cents.


          The court first concluded that the game was a banking

game and then stated that the game the defendant conducted "was not

played for cigars or other merchandise, but for chips, each of

which under the agreement and scheme represented the value of ten

cents and was redeemable at such value by the defendant as banker,

in merchandise selected by the winner of the chips, and hence they

were representative of the value of the merchandise so received in

exchange therefor." The court added that "the merchandise given in

exchange for the chips must be deemed of value and the value of the

goods which, in accordance with the scheme, were given in exchange

for the chips won was represented by the chips, possessing no

intrinsic value whatever. Hence, conceding the correctness of the

Williams case, wherein it was held that the cigars constituting the

stakes were not representative of value, it is distinguishable from

the facts in the present case in that the chips played for were,

under the scheme and agreement, intended to and did represent ten

cents each in value, to be paid for and redeemed in merchandise."


          While Lowrie distinguished the Williams case we think the

distinction is illusory. If the merchandise for which the chips

were redeemed in Lowrie "must be deemed to have value" represented

by the chips we fail to see why the cigars in Williams did not also

have value which was represented by the winning combination of

cards on the cylinder of slot machine. In our view an appellate

court would now reject the ejusdem generis construction of Williams

and hold that when the game is played directly for valuable

merchandise that such merchandise is "representative of value"

within the meaning of section 330.


          When we combine the lessons of the Carroll and Lowrie

cases we see that whether chips are representative of value within

the meaning of section 330 depends on whether the chips may be

redeemed for money or something of value and not on what, if

anything, was paid for the chips. If we assume that the player


                                6.                          87-906

pays money for chips having no intrinsic value of their own which

he then uses to participate in the game and wins additional chips

in the process, unless he can redeem the chips he has won for money

or representative of value it cannot be said that he "played" the

game for money or representative of value as Carroll construed

section 330. This is the reason the Lowrie case focused on the

fact that the chips were redeemable for merchandise instead of the

fact that the players had paid ten cents each for the chips. As we

shall see this is in sharp contrast to the consideration element of

a lottery which focuses upon what the players have paid for the

chance to win.


          Thus where the game is played for chips which may be

redeemed for merchandise the chips represent the value of such

merchandise and hence are "representative of value" within the

meaning of section 330. In the "casino night" described the chips

are not assigned a particular monetary value (like the ten cents in

the Lowrie case) but this does not detract from the fact that they

have the value of the merchandise for which they are redeemed and

are thus "representative of value".     This is particularly true

where the chips are used to buy merchandise at auction at the end

of the event.    When the chips are used instead to buy raffle

tickets a new factor is added to the scheme in that the redemption

of the chips for merchandise is conditioned upon winning the

raffle.   In our view the fact that redemption of the chips for

merchandise is conditioned upon winning a raffle does not render

them valueless or prevent them from constituting a "representative

of value" within the meaning of section 330. In other words the

chance to win the raffle has a value which is represented by the

chips.


          We conclude that when persons make a wager with chips

(whether acquired by gift or purchase) at a game of roulette or

twenty-one or any other game prohibited by section 330, when the

chips won may be used to (1) acquire raffle tickets to be drawn for

valuable merchandise or (2) bid at auction for valuable

merchandise, the chips are "representative of value" and section

330 is violated.


                            Lotteries


          Since the "casino night" described in the question

includes a raffle and the playing of casino games which may be

lotteries we now consider the statutory definition of a lottery.


          Section 319 provides:


          "LOTTERY DEFINED. A lottery is any scheme for the

     disposal or distribution of property by chance, among

     persons who have paid or promised to pay any valuable

     consideration for the chance of obtaining such property

     or a portion of it, or for any share or any interest in


                                7.                          87-906

     such 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 the same may      be

     known."


          A lottery has three essential elements: (1) a prize; (2)

distributed by chance; and (3) consideration. (California Gasoline

Retailers v. Regal Petroleum Corporation (1958) 50 Cal 2d 844,

851.)   The statutory definition refers to the prize as "property"

without any restrictive words and it has been held that the word

"property" in section 319 is used in its most general sense.

(People v. Settles (1938) 29 Cal.App.2d (Supp.) 781, 786.)       It

includes real and personal property, money, goods, chattels, things

in action, evidence of debt and obligations. (Id.) The courts have

recognized the following kinds of property to satisfy the prize

element of a lottery: $500 in cash, People v. Gonzales (1944) 62

Cal.App.2d 274, 275; a Buick automobile, Holmes v. Saunders (1952)

114 Cal.App.2d 389, 390; five dollars worth of merchandise, People

v. Bardaty (1934) 139 Cal.App. (Supp.) 791, 793; a free trip to

Catalina, People v. Cardas (1933) 137 Cal.App. (Supp.) 788, 789­
790; the right to play further games free, People v. Settles,

supra, at page 786. (Cf. Gayer v. Whelan (1943) 59 Cal.App.2d 255,

263 in which the court held that the amusement afforded by a free

game on a pinball machine was not a representative or thing of

value within the meaning of section 330a prohibiting possession of

a gambling device.)    The valuable merchandise for which raffle

tickets are drawn referred to in the question would constitute a

prize under the lottery statute.


          A prize must be distinguished from a bet between two

persons upon an uncertain future event. In People v. Postma (1945)

69 Cal.App.2d (Supp.) 814 the defendants were engaged in bookmaking

on horse races.    The court held that the defendants were not

operating a lottery because there was nothing put up as a prize.

(We hasten to add that bookmaking is outlawed by § 337a.) At page

818 the court stated:


          "When two persons bet with each other, it cannot be

     said that either of them, or the stakeholder, if there is

     one, has offered any property for disposal or

     distribution to persons who have paid a consideration for

     the chance of obtaining it. Each bettor has put up his

     own property on a venture and at risk of losing it, but

     has not paid for the chance of winning that of the other

     bettor. This is true at least where but two persons or

     two opposing sets of persons are concerned in the bet, as

     here. In the case of a pari-mutuel pool to which many

     persons contribute, there are, perhaps (eliminating the

     question of chance), more persuasive reasons for

     considering the scheme a lottery than we find here."

     (Citing cases.) 


                                8.                           87-906

          The second element of a lottery requires that the prize

be distributed by chance. Whether the distribution of a prize is

distributed by chance is to be determined from the perspective of

the players. Where the person conducting the scheme arbitrarily

selects the winner the chance element of a lottery is present

because "as to the purchaser it is uncertain, it is chance that

luck and good fortune will give a large return for a small outlay."

(People v. Hecht (1931) 119 Cal.App. (Supp.) 778, 787.) On the

other hand where the persons conducting the scheme remove all

element of chance in determining the winner by fraudulently

contriving to have one of themselves selected as the winner the

scheme is not a lottery. ( People v. Carpenter (1956) 141

Cal.App.2d 884, 888.)    A trading stamp scheme is not a lottery

because redemption of the stamps does not depend on chance. ( Ex

Parte Drexel (1905) 147 Cal. 763, 768.)


          Distribution of the prize may depend on skill rather than

chance. Competitive shooting at a target is a game of skill and

the fact that an entry fee is charged to compete for a prize at

such a game does not convert the sport into a game of chance. (See

Brown v. Board of Police Commissioners (1943) 58 Cal.App.2d 473,

477.)   Frequently a game will have elements of both skill and

chance. A game is not one of skill merely because that element

enters into the result in some degree, or one of chance solely

because chance is a factor in producing the result. ( People v.

Settles, supra, at p. 787.) It is the character of the game rather

than a particular player's skill or lack of it that determines

whether the game is one of chance or skill.       The test is not

whether the game contains an element of chance or an element of

skill but which of them is the dominating factor in determining the

result of the game. (In re Allen (1962) 59 Cal.2d 5, 6.) Whether

skill or chance dominates a particular game can be a difficult

question of fact. (See People v. Settles, supra, at pp. 787-788.)


          The courts have held the following methods to be

distribution by chance.      Drawing the winning ticket from a

container; People v. Cardas (1933) 137 Cal.App. (Supp.) 788, 789­
790. Spinning wheels to determine winning number;       People v.

Gonzales (1944) 62 Cal.App. 274, 277. Playing tango 2; Einzig v.

Board of Police Commissioners (1934) 138 Cal.App. 664; People v.

Babdaty (1934) 139 Cal.App. (Supp.) 791. Adding dart throwing to

qualify winners of tango game presented question on which the jury

might reasonably have found either way as to whether skill or


    2
     "Tango" is a game similar to bingo using bingo like cards in

which the players participate in the selection of the      letter-

numbers drawn by taking turns throwing a rubber ball into a table

of wooden pockets containing a pocket for each possible letter-

number combination. As a rule the ball bounces around a lot before

settling in a pocket.


                                9.                          87-906

chance was the dominant factor in determining the result. (People

v. Settles, supra, 29 Cal.App.2d (Supp.) 781, 787.) Picking winners

of five successive horse races in betting in a "5-10" pool3 was

held to be a lottery as a matter of law. (Finster v. Keller (1971)

18 Cal.App.3d 836.) A contest in which participants paying one

dollar each selected the most appropriate captions for six cartoons

in which prizes were awarded the best by a panel of judges was held

to be a distribution by chance, because the elements of a bona fide

contest of skill were not present. ( People v. Rehm (1936) 13

Cal.App.2d (Supp.) 755, 757.) The game of Ringo consisting of a

bingo game in which players paid 25 cents for each card or got a

free card if they tossed a small ring over a peg and the winner, to

qualify for the prize had to toss a larger ring over a larger peg

was held to be a game in which the game of bingo, one of pure

chance, dominates. ( People v. Shira (1976) 62 Cal.App.3d 442,

462.)


          In In re Allen (1962) 59 Cal.2d 5 the court held that the

game of bridge was a game in which skill predominated and thus was

not a game of chance. Draw poker is a game of chance. (Lavick v.

Nitzberg (1948) 83 Cal.App.2d 381, 382-383.) Roulette has been

described as "a banking and a percentage game." (Vasey v. Campbell

(1906) 4 Cal.App. 451, 453.)     Rolling the ball into the groove

above a spinning roulette wheel would appear to involve little

skill, and none which would affect the place on the wheel on which

the ball finnaly comes to rest. Shooting craps and other games in

which the result depends on a throw of dice are generally held to

be games of chance. (38 Am.Jur.2d, § 40; 66 Ops.Cal.Atty.Gen. 276,

283 (1983).) Keno is a game of chance. (64 Ops.Cal.Atty.Gen. 114,

116 (1981).) Twenty-one, or blackjack as it is sometimes called,

is a game of chance. ( Jacques v. State Board of Equalization

(1957) 155 Cal.App.2d 448; 65 Ops.Cal.Atty.Gen. 123, 128; 66

Ops.Cal.Atty.Gen. 276, 280.) In Tooley v. U.S. (D.Nev. 1955) 134

F. Supp. 162, 166-167, the court observed:


          "No one will question the fact that craps, twenty-

     one and roulette are games of chance with percentages

     heavily loaded in favor of the house, yet there are some

     expert players, cross-roaders, who can outplay and break

     the house even on these admitted gambling games. But

     that does not convert these games from games of chance to

     games of skill." 



     3
      While skill may dominate successful performance of a single

event chance rapidly overtakes skill when one wagers on the

successful repetition of that event. Thus a basketball player who

sinks 2 free throws out of 3 for the season has less than an even

chance (2/3x2/3=4/9) to sink two in a row, less than one chance in

three (2/3x2/3x2/3=8/27) to sink three in a row and less than one

chance in five (16/81) to sink four in a row.


                               10.                          87-906

          Applying the distribution by chance element of a lottery

to the "casino night" described in the request, we note that both

roulette and twenty-one are games of chance, not of skill. Both

games therefore constitute lotteries when played for prizes by

players who have paid a consideration for the chance to win.

Similar "casino games" of chance, such as craps, would also

constitute lotteries when played in like manner. It is assumed

that the "drawing" of the winning raffle tickets referred to in the

question will be selected at random from a container holding all

the eligible raffle tickets.       Thus the distribution of the

merchandise as prizes would be by chance making the a raffle a

lottery if the players paid a consideration for the chance to win.



          The third element of a lottery is consideration. The

question of consideration is to be determined from the standpoint

of the holders of the tickets who might win the prize, not from the

standpoint of those who are conducting the event. ( People v.

Cardas (1933) 137 Cal.App. (Supp.) 788, 791; Cal. Gas Retailers v.

Regal Petroleum Corp. (1958) 50 Cal.2d 844, 860.) This follows

clearly from the statutory definition that it is the distribution

of property by chance "among persons who have paid or promised to

pay any valuable consideration for the chance of obtaining such

property or a portion of it." ( Cal. Gas Retailers v. Regal

Petroleum Corp., supra, at p. 860.)


          The kind of consideration necessary for a lottery is not

as extensive as the consideration necessary for a contract. Civil

Code section 1605 provides that "any benefit conferred, or agreed

to be conferred, upon the promisor, by any other person, to which

the promisor is not lawfully entitled, or any prejudice suffered,

or agreed to be suffered, by such person, other than such as he is

at the time of consent lawfully bound to suffer, as an inducement

to the promisor, is a good consideration for a promise."       The

benefit conferred language will not suffice as consideration for a

lottery because it is what is paid by the ticket holder that

determines consideration for a lottery, not what benefit is

conferred on the sponsor.     Thus the fact that the sponsor's

business is enhanced does not provide the consideration necessary

to make a promotion a lottery. ( Cal. Gas Retailers v. Regal

Petroleum Corp., supra, at p. 862.)


          The question to be answered on the consideration element

was stated three ways by the court in People v. Cardas, supra, at

pages 790-791: Was a valuable consideration paid for the chance of

winning the prize by those who stood to win? Was anything of value

hazarded upon the chance by them? Did the holders of the prize

tickets pay a valuable consideration for the chance? Since the

statutory definition requires that the consideration necessary is

a "valuable one" paid, or promised to be paid by the one receiving

the ticket, the fact that a ticket holder must go to the place of

business of the sponsor of the scheme to deposit the ticket stub


                               11.                          87-906

cannot be considered the necessary consideration. ( Cal. Gas

Retailers v. Regal Petroleum Corp., supra, at pp. 861-862.)


          The consideration to make a transaction a lottery need

not be paid exclusively for the chance to win the prize. It is

sufficient that the consideration be paid for something else and

the chance to win the prize. ( People v. Gonzales (1944) 62

Cal.App.2d 274, 279-280; Holmes v. Saunders (1952) 114 Cal.App.2d

389, 390-391; Cal. Gas Retailers v. Regal Petroleum Corp., supra,

at p. 859.) 


          A game does not cease to be a lottery because some are

admitted to play without paying for the privilege, so long as

others paid for their chances. ( People v. Shira (1976) 62

Cal.App.3d 442, 460.)


          Where, in a business promotion plan, there is a general

and indiscriminate distribution of free prize tickets whether or

not the recipients have made a purchase and valuable prizes are

awarded to those holding winning tickets selected by chance, the

plan is a gratuitous distribution of property, not a lottery

because the ticket holders did not pay a valuable consideration for

their tickets. ( People v. Cardas, supra; People v. Carpenter,

supra; and Cal. Gas Retailers v. Regal Petroleum Corp., supra.)


          While it is simple to state the foregoing rules announced

by the courts to determine the consideration element of a lottery

their application to particular cases can be difficult. One reason

is the difficulty in choosing which rules apply.       Where prize

tickets are given both to those who have made a purchase and those

who have not, does the rule that the consideration need not be paid

exclusively for the chance to win apply so the purchase price paid

is not only for the merchandise but also for the chance to win?

Does the rule that the game does not cease to be a lottery because

some play free while others must pay apply? Or it this just a

business promotion with a gratuitous distribution of property? The

key to which of these rules apply lies in whether the distribution

of free tickets has been "general and indiscriminate". Only when

the court concludes that the distribution of free tickets is such

that it can realistically be said that the person who bought

merchandise did not pay for his ticket because he could have got

one free without making the purchase will it be concluded that the

person did not pay a valuable consideration for the chance to win

the prize. (People v. Shira, supra, at pp. 459-460.)


          In Cal. Gas Retailers v. Regal Petroleum Corp., supra, at

page 859, the court rejected any mechanical application of rules to

determine whether a scheme is a lottery. Quoting from 34 American

Jurisprudence 650 the court said:


          ". . . that no sooner is the term 'lottery' defined

     by a court, than ingenuity evolves some scheme within the


                               12.                          87-906

     mischief discussed, although not quite within the letter

     of the definition given; but an examination of the many

     cases on the subject will show that it is very difficult,

     if not impossible, for the most ingenious and subtle mind

     to devise any scheme or plan, short of a gratuitous

     distribution of property, which has not been held by the

     courts of this country to be in violation of the lottery

     laws. . . . The court will inquire, not into the name,

     but into the game, however skillfully disguised, in order

     to ascertain if it is prohibited."


Thus the courts will cut to the heart of the scheme to determine

whether the players paid a valuable consideration for the chance to

win the prize however that consideration may be disguised.       An

examination of six cases which have considered the element of

consideration in a lottery will provide some insight on how

California courts have applied the rules discussed above.


          In Holmes v. Saunders, supra, a numbered ticket was

provided to each person who paid $1 for a six months subscription

to a publication in a subscription drive.      The holder of the

winning ticket to be drawn on a specified date at the Oakland

Auditorium Arena would receive a Buick automobile. The court held

this was a lottery stating that "the consideration to make such a

transaction a lottery need not be paid exclusively for the chance

to win the prize.    It is sufficient that the consideration, as

here, be paid for something else and the chance to win the prize."


           In People v. Cardas, supra, a theater owner advertised

that free trips to Catalina would be given to the holders of

winning prize tickets.       Five thousand prize tickets were

distributed with programs in the neighborhood of the theater and

2000 others were distributed to passing motorists. Others were

handed out in front of the theater to patrons and non-patrons

alike.   No prize tickets were given by the cashier who sold

admission tickets and it was not necessary to buy an admission

ticket to secure a prize ticket.     The prize ticket stubs were

deposited in a receptacle outside the theater. The drawing was

held on the stage but the winning numbers were announced both

inside and outside the theater. A person with a winning ticket

could enter the theater to claim the prize without paying an

admission.   The court held that this was not a lottery because

"those who purchased admission tickets and received prize tickets,

. . . could not be said to have paid a consideration for the prize

tickets since they could have received them free."


          People v. Gonzales, supra, was another theater promotion

involving five theaters. Every two weeks $500 was awarded in a

"cash night" drawing to the holder of the winning ticket.      The

winning number was determined by spinning wheels and announcing it

simultaneously over the public address systems in all five

theaters.   One minute was given for the holder of the winning


                               13.                          87-906

ticket to claim the prize. One prize ticket was given for each

admission ticket bought at the time of purchase and another was

handed to each patron as they left the theater.      No ticket was

given to anyone who had not paid for an admission. There were no

announcements or participation outside the theater. The court held

the cash night to be a lottery. The court distinguished People v.

Cardas, supra, at page 281 by "the fact that there was a general

and indiscriminate distribution of the drawing tickets irrespective

of whether admission was paid; that attendance inside the theater

was not a prerequisite to participation in the drawing; and

announcement was made outside the theater for the benefit of non-

customers."


          Cal. Gas Retailers v. Regal Petroleum Corp., supra,

involved an advertising and merchandising plan by the operators of

several gas stations. Prize tickets were given away free to anyone

who asked for them, and to many who did not ask for them both at

and away from the stations.      Receipt of the tickets was not

dependent on any purchase. Ticket stubs had to be deposited at one

of the stations. Winning ticket numbers were drawn periodically

and posted at each station. The winner had a week to claim his

prize. In some cases the scheme was financed by adding a cent to

the price of the gasoline which was passed on to the customers.

The court held there was no lottery because it clearly appeared

from the record that any person could have received a ticket, free

for the asking, without making any kind of purchase. 


          In Polonsky v. City of South Lake (1981) 121 Cal.App.3d

464 the court held that where the city issued a limited number of

building permits to those applicant lot owners selected by lot, the

fact that the city charged a fee to the applicants to pay for the

cost of notifying all lot owners of the plan did not constitute

consideration necessary to make the plan a lottery.


          People v. Shira, supra, involved a game called "Ringo"

played in an amusement zone in Long Beach. The defendant had a

city license for his "Amusement-Skill" business.          The game

consisted of a regular bingo game, preceded by a small ring toss

phase to qualify those who would play the bingo game, and followed

by large ring toss to qualify the bingo winner for the prize. In

the small ring toss each person was given small red ring free of

charge. If he succeeded in tossing it over a small peg he would

get two bingo cards free and could participate in the bingo game

without charge. If he missed the toss he could buy a small white

ring for 25 cents and receive two bingo cards with it. Those who

succeeded in tossing the white ring over the peg got their 25 cents

back but not if they missed. In either case they played the bingo

cards. Only 12 percent of those playing bingo got their cards free

by successfully tossing the small rings. After winning at bingo

the person won the prize only if he succeeded in tossing a larger

ring over a larger peg. The court held that Ringo was an illegal

lottery because the vast majority of the bingo players must pay a


                               14.                          87-906

valuable consideration (25 cents) for the chance to win and the

game of bingo, one purely of chance, dominated over the skill

involved in the ring tosses.    The court analyzed the  Cardas,

Gonzales, Carpenter, and Regal cases at great length. The court

stated (at p. 459):


          "We construe the implicit holdings of those four

     cases to be, as they pertain to the presence or absence

     of the element of consideration, that in order for a

     promotional giveaway scheme to be legal any and all

     persons must be given a ticket free of charge and without

     any of them paying for the opportunity of a chance to win

     the prize. Conversely, a promotional scheme is illegal

     where any and all persons cannot participate in a chance

     for the prize and some of the participants who want a

     chance to win must pay for it."


          "In Cardas, Carpenter, and Regal the schemes lacked

     the element of consideration and were legal because there

     was a general and indiscriminate system of distribution

     of the drawing tickets and the money paid by the patrons

     for the admission ticket to the theater or for gasoline

     was no more than consideration for viewing the movie or

     for the gasoline itself. The element of consideration in

     the promotional scheme in Gonzales and the scheme were

     illegal   because   there   was   not   a   general   and

     indiscriminate distribution of the drawing tickets and

     money paid for an admission ticket to the theater also

     constituted consideration paid for the chance at the

     prize." 


          In the "casino night" described in the question we are

advised that the chips are "given" to those buying tickets to the

event. There is no indication that any of the chips to be used at

the games would be given away free to those who did not buy

tickets. Thus there is no general and indiscriminate distribution

of free chips to make this a gratuitous distribution of property.

Instead we believe the courts would find that a portion of the

price paid for the "casino night" tickets paid for the chips and

thus provided the consideration requisite for a lottery.


          The players use the chips first to play the casino games

at which they would either lose some or all of their chips or win

more of them.   Some of the "casino games", including roulette,

would constitute lotteries in that the players paid valuable

consideration for the chips for the chance to win a prize. After

the games are over we are advised that the players would use the

chips they had left or had won to buy raffle tickets for valuable

merchandise. As section 319 indicates, a raffle is another name

for a lottery. The valuable merchandise (the prize) is distributed

by chance (drawing the winning ticket) to those who have paid a

valuable consideration (for the chips) for the chance to win.


                               15.                          87-906

          The other use of the chips referred to in the question is

their use in bidding at an auction for valuable merchandise. Since

the auction comes at the end of the event most of the chips used at

the auction will be those which have been won at the gaming tables.

The auction provides the means of converting those chips into

valuable merchandise, making them "representative of value" and an

essential element making the playing of such games a violation of

section 330.


                          Participation


          In addition to the elements discussed above a person must

participate in a prohibited game or lottery in a manner specified

by statute to violate the gaming and lottery laws. Merely being a

spectator does not violate either law.


          Section 330 provides that "every person who deals, plays,

or carries on, opens, or causes to be opened, or who conducts,

either as owner or employee, whether for hire or not" a game

prohibited therein and "every person who plays or bets at or

against any of said prohibited games" is guilty of a misdemeanor.

Anyone who carries on or conducts a prohibited game played for

money violates section 330 whether or not he is an employer or

employee. (People v. Sam Lung (1886) 70 Cal. 515, 517.) Applying

this language to the "casino night" described, those who deal,

play, or bet at or against a prohibited game as well as those who

open, cause to be open, carry on or conduct a prohibited game would

violate section 330.


          Section 320 provides that "Every person who contrives,

prepares, sets up, proposes, or draws any lottery, is guilty of a

misdemeanor." Section 321 provides that "Every person who sells,

gives, or in any manner whatever, furnishes or transfers to or for

any other person any ticket, chance, share, or interest, or any

paper, certificate, or instrument purporting or understood to be or

to represent any ticket, chance, share, or interest in, or

depending upon the event of any lottery, is guilty of a

misdemeanor." Section 322 provides that "Every person who aids or

assists, either by printing, writing, advertising, publishing, or

otherwise in setting up, managing, or drawing any lottery, or in

selling or disposing of any ticket, chance, or share therein, is

guilty of a misdemeanor." Section 326 provides that "Every person

who lets, or permits to be used, any building or vessel, or any

portion thereof, knowing that it is to be used for setting up,

managing, or drawing any lottery, or for the purpose of selling or

disposing of lottery tickets, is guilty of a misdemeanor."


          Applying this language to the "casino night" described,

those who propose, prepare, set up, furnish chips with the "casino

night" tickets, transfer raffle tickets for chips, assist in the

raffle drawing, or in some other manner participate in a lottery in



                               16.                          87-906

a manner prohibited by the above quoted sections are guilty of a

misdemeanor.


          The question states that the "casino night" will be

sponsored and conducted by a charitable organization. Of course

this will be done by individuals who are acting on behalf of the

organization.   If any of these individuals do any of the acts

prohibited by the gaming or lottery statutes the fact that they

acted on behalf of a charitable organization will not provide any

defense to such violations. Nor will the fact that the proceeds of

the "casino night" will be used only for charitable purposes

provide any defense to their violations. (See 64 Ops.Cal.Atty.Gen.

114, 117 (1981).) The only exception in California's gambling laws

for charities is that provided in section 326.5 authorizing cities

and counties to authorize certain organizations to conduct bingo

games for charitable purposes only. 


          We conclude that a charitable organization may not

lawfully sponsor or conduct a "casino night" event for which

tickets are sold to the general public where those attending would

be given chips with which to play roulette, twenty-one, and similar

types of games and the chips won by the players would be used at

the end of the event to (1) acquire raffle tickets to be drawn for

valuable merchandise or (2) bid at auction for valuable

merchandise.


                            * * * * *





                               17.                          87-906

