             THE      ATTORNEY          GENERAL
                         OF    TEXAS



                          December     20,   1990




Honorable Terra1 Smith           Opinion No. JM-1267
Chairman
Natural Resources Committee      Re: Authority of the legisla-
House of Representatives         ture to permit casino games of
P. 0. Box 2910                   chance without a constitutional
Austin, Texas 78768-2910         amendment   (RQ-2102)

Dear Representative   Smith:

     Article III, section 47, of     the Texas Constitution
provides that the.legislature   "shall pass laws prohibiting
lotteries  and gift enterprises,"     while permitting   the
holding of certain charitable bingo games and raffles.   The
legislature has so provided, forbidding in chapter 47 of the
Penal Code the holding of lotteries.       In addition,  the
definitions and prohibitions set forth in chapter 47, which
proscribes "gambling~~ as defined in that chapter, are broad
enough to effectively prohibit those types of games typical-
ly conducted in gambling casinos. See Searcy & Patterson
Practice Commentary, Tex. Penal Code g 47.02 (Vernon 1973).1

     You ask about the proper construction of section 47 of
article III.   Specifically  you ask the following     three
questions:




     1. The Practice Commentary         to section 47.02   provides
in pertinent part:

        Section 47.02 as enacted appears to proscribe all
   forms of gambling,  from coinmatching  and the weekly
   football pool to lotteries and roulette to parimutuel
   betting whether on track or with a bookie. As such
   the section preserves,   although with much greater
   economy, the basic scheme of prior law that in Penal
   Code arts. 615 to 618, 644, 645, and 646 to 652 out-
   lawed most forms of gambling.




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Honorable Terre11 Smith - Page 2       (JM-1267)




        1. May the legislature, without an amendment
        to Article   III, Section 47, of the Texas
        Constitution, authorize any of the following
        casino gambling games [in] this state:

             (a)   roulette;

             (b)   dice;

             (c)   slot machines; or

             Cd) other games awarding      a prize   solely
        by   chance?

        2. May the legislature, without an amendment
        to Article III, Section 47, of the Texas Con-
        stitution, authorize  any of the following
        casino gambling games in this state:

             (a)   poker;

             (b)   blackjack;

             (c)   sports pools: or

           (d)     other games involving    an element   of
        skill?

        3. May the legislature, without an amendment
        to Article   III, Section 47, of the Texas
        Constitution, authorize casino gambling   to
        exist 9$& on Port Arthur's Pleasure Island?

     There is no question that chapter 47 of the Penal Code
proscribes those gaming activities about which you ask. See
Penal Code 88 47.01, 47.02.     The issue is whether    those
gaming activities   fall within the ambit of the phrase
"lotteries and gift enterprises" set forth in section 47 of
article III and are thereby prohibited by the Texas Consti-
tution.   If they do, then the legislature may not authorize
those activities by amendins the Penal Code: if not, then it
may. &g 0,                  -494 S.W.Zd 866 (Tex. Crim. APP.
1973); barrv v. State, 45 S.W. 571 (Tex. Crim. App. 1898).

     The Texas Constitutions of 1845, 1861, 1866, and         1869
each contained  the following prohibition   regarding         lot-
teries:




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    Honorable Terre11 Smith - Page 3    (JM-1267)




               No lottery  shall be authorized   by this
            State: and the buying or selling of lottery
            tickets within this State is prohibited.

    Tex. Const. art. XII, 5 36 (1869); Tex. Const. art. VII,
    5 17 (1866): Tex. Const. art. VII, 5 17 (1861); Tex. Const.
    art. VII, § 17 (1845). The constitution of 1876 contained
    the following prohibition of lotteries set forth in section
    47 of article III:

               The Legislature   shall pass laws      pro-
            hibiting the establishment   of lotteries  and
            gift enterprises in this State, as well as
            the sale of tickets in lotteries, gift enter-
            prises or other     evasions   involving   the
            lottery principle, established or existing in
            other States.

    The addition of the language prohibiting 'I ift enterprises
    or other evasions of the lottery principle" 9 apparently was
    included in order to indicate the drafters' support of two
    Texas Supreme Court cases that held that the 13th Legisla-
    ture did not license the operation of "gift enterprises"  by
-   the enactment of an occupation tax on them and that a "gift
    enterprise," as then understood, was essentially a lottery.3
    See Randle v. State, 42 Tex. 580 (1875); State v. Randle, 41
    Tex. 292 (1874); 1 G. Braden, The Constitution of the State
    of Texas: An Annotated and Comnarative  Analvsis 192 (1977).




         2.  It is apparent that the phrase was intended to
    proscribe other forms of lotteries. See also Citv of Wink
    v. Griffith Amusement Co., 100 S.W.2d 695 (Tex. 1936): State
    V. Randle, 41 Tex. 292 (1874).

         3.  The licensing statute defined "gift enterprises"   in
    the following fashion:

       Every person,   firm, or corporation  who shall sell
       anything with a promise, either expressed or implied,
       to give anything in consideration of such sale and
       purchase, shall be regarded as the proprietor of a
       gift enterprise.

    Acts 1873, 13th Leg., ch. 121, 5 3, at 200.




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Honorable Terre11 Smith - Page 4    (JM-1267)




     Section 47 of article III was amended   in 1980 to permit
the operation of bingo games by charitable   organizations and
again in 1989 to permit such organizations   to hold raffles.
Acts 1989, 71st Leg., H.J.R. 32, 5 1; Acts   1979, 66th Leg.,
S.J.R. 18, § 1. Subsection (a) of section    47 of article III
of the Texas Constitution now provides the   following:

           The Legislature shall pass laws prohibit-
        ing Lotteries  and uift enternriseq-in  this
        State other than those authorized    by Sub-
        sections (b) and (d) of this section -[which
        authorize the legislature   to permit under
        certain circumstances    the conducting    of
        charitable bingo games and raffles].     (Em-
        phasis added.)

     The Texas Supreme Court has declared   that section  47
was not intended to condemn merely   lotteries, but was  in-
tended also to condemn separately stated schemes, which were
not lotteries, but which involved the lottery principle,  or
chance:

           In general, it may be   said that chance  is
        the basic element of a     lottery.   Unless  a
        scheme for the awarding    of a prize requires
        that it be awarded by a    chance, it is not a
        lottery. . . .

            There are, however, in a lottery, accord-
         ing to the authorities,      three   necessary
        elements, namely, the offering of a prize,
        the award of the prize by chance, and the
        giving of a consideration for an opportunity
        to win the prize.   38 C-J. p. 289, § 2.     But
        the ons tut'o                       inas which
        f all sor
               h t 0 f containina    all the essential
         elements of a lotterv. namelv. those thinas
        which involve the lotterv nrincinle. of which
        qII   ce" 's                        itutes the
        verv basis of a lotterv. and without which it
        w ul
        o.                         (Emphasis added.)

[
C't of W'n                            o., 100 S.W.2d 695,   701
(Tex. 1936).

     But it is equally clear that the drafters    did not
intend section 47 of article III to proscribe a  forms of
gambling.  During the drafting of the constitution,     an
amendment to section 47 was offered to add the words  "and
                                                                  4




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Honorable Terre11 Smith - Page 5         (JM-1267)




shall pass laws prohibiting  gambling of every character   in
all places."   The amendment was not adopted.    1875 Texas
Constitutional Convention,  Journal of the Constitutional
Convention of the State of Texas, Begun and Held at the City
of Austin, September 6, 1875, at 269. Moreover, it is clear
that the term wlottery'* was not thought at the time     that
section 47 was adopted to include all forms of gambling
either. See Panas V.    Texas Breeder   & Racina Ass'n     80
S.W.2d 1020 (Tex. Civ. App. - GalvesEon 1935, writ diAm#d)
(construing section 47 not to prohibit wagering on horse
races); State v. Rand&, 41 Tex. 292 (1874); V.T.C.S.     art.
179e (creating the Texas Racing Commission and permitting
parimutuel wagering on horse races and greyhound races).

     Texas courts uniformly    have held     that three       elements
comprise a lottery:

        (1) a prize    in   money   or    other      thing   of
        value:

        (2)   its distribution by chance: and

        (3) payment, either directly or indirectly,
        of a valuable consideration for the chance to
        win the prize.

Citv of Wink        * Brice v. State, 242 S.W.Zd 433, 434
(Tex. Crim. ipp?%;)   ; Cole v. State, 112 S.W.2d 725   (Tex.
Crim. App. 1937); State v. Soconv Mobil Oil Co., 386 S.W.Zd
169 (Tex. Civ. App. - San Antonio 1964, writ ref'd n.r.e.)i4
see also Attorney   General Opinions JM-513   (1986); H-820
(1976).

     With your first two questions, you ask whether a list
of gaming activities typically conducted in gambling casinos
falls within the ambit of the phrase    "lotteries and gift



     4. Subdivision (6) of section 47.01 of the Penal             Code
defines *llottery" in the following fashion:

   *Lottery' means any scheme or procedure whereby one or
   more prizes are distributed by chance among persons
   who have paid or  promised consideration for a chance
   to win anything of value, whether such scheme or pro-
   cedure is called a pool, lottery, raffle, gift, gift
   enterprise, sale, policy game, or some other name.




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Honorable Terre11 Smith - Page 6    (JM-1267)




enterprises."  For purposes of this opinion, we assume that
two of the necessary  three elements of a lottery would be
present during the holding of the gaming activities     about
which you inquire, h,     the payment  of consideration   and
the awarding of a prize.   We understand you to ask whether
the necessary  third element, the award of the prize by
chance, as opposed to an award determined by skill, would
also be present.

     In Attorney General Opinion C-619 (1966), this office
was asked whether a certain referral selling plan called a
"representative purchasing commission agreement" constituted
a lottery.   In discussing the necessary element of chance,
the opinion declared:

        The second element, the distribution of the
        prize by chance, requires a closer analysis
        in the light of the decisions as to whether
        the dominatina element of the entire    scheme
        was that of chance, or that of skill, judg-
        ment , or ingenuity, 54 C.J.S. 846, Lotteries,
        Sec. 2b(2), and cases cited. If the plan or
        game depends entirely on skill, it is not a
        lottery although prizes are offered for the
        best solution. Boatriaht    . State, 118 Tex.
        Crim. 381, 38 S.W.Zd 87 71931).     If chance
        predominates over skill or judgment and per-
        meates the whole plan, a lottery is estab-
        lished. &.9rwood & Robert Yakima. I c
        Clvde   . Le     67 W.D.Zd :;8, 409 P.:d' 1:;
        (Wash.GSup.azti5).

Id. at 5-6 (emphasis in original). m     Adams v Antonio, 88
S.W.2d 503, 505   (Tex. Civ. App. - Waco   1935,'writ   ref'd)
(dicta to the effect that gaming statute was violated       in
instance in which chance predominates over skill):    see also
Attorney General Opinions WW-222     (1957); V-1483    (1952);
V-544 (1948); V-238 (1947).

     We conclude  that the legislature,    without  amending
section 47 of article III of the Texas Constitution,      may
amend chapter 47 of the Penal Code to permit the holding   of
those gaming activities  that do not constitute a lottery,
i.e., that do not comprise the elements of consideration,   a
prize, and chance. Whether    any of the gaming activities
about which you ask involves the dominating      element   of
skill, as opposed to chance, is a question     of fact that
cannot be resolved   in the opinion process.     It is the
character of the game, and not the skill or want of skill of




                               P. 6773
Honorable Terre11 Smith - Page 7      (JM-1267)




the player, that determines whether the game is one of skill
or chance. m     w     v. AntOnlQ m      (authorities cited
therein).   Therefore,  we cannoi answer your first two
questions.

     Your third question is whether the legislature      may,
without amending  section 47 of article III of the Texas
Constitution, permit the holding of those gaming activities
typically comprising casino gambling a      in Port Arthur.
You have not provided us with a draft of any proposed
amendment to chapter 47 of the Penal Code.       We do not
provide general guidance or answer speculative questions   in
the opinion process. Accordingly, we decline to answer your
third question.   We note, however, #at    any amendment   to
chapter 47 of the Penal Code that permitted in Port Arthur
alone the holding of otherwise proscribed gaming activities
should be considered in light of article III, section 56, of
the Texas Constitution.5     But see V.T.C.S.   art.    179e,
9 6.14(c) (provides that each greyhound track licensed under
the act must be located in a county that has a population of
more than 190,000 according    to the most recent    federal
census, and that includes all or part of an island that
borders the Gulf of Mexico).

     We   conclude that the legislature may, without  amending
section   47 of article III of the Texas Constitution,   amend
chapter   47 of the Penal Code to authorize gaming activities
that do   not constitute a lottery or gift enterprise, i.e.,




     5. Article III, section 56, of the Texas Constitution
prohibits the legislature from enacting, except as provided,
local and special laws and provides in pertinent part:

        The Legislature  shall not,    except as   otherwise
   provided in this Constitution,      pass any    local or
   special law, authorizing:

          .   .   .   .

   For limitation of civil or criminal actions:

          .   .   .   .

   And in all other cases where a general law can be made
   applicable, no local or special law shall be enacted.




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Honorable Terre11 Smith - Page 8     (JM-1267)


                                                                 ?




that do not comprise the three elements of consideration,
prize, and chance. Whether any specific gaming activity
involves the dominating element of skill, as opposed to
chance, is a question of fact that this office cannot
resolve in the opinion process. Therefore, we cannot answer
as a matter of law your first two questions.  Because we do
not answer speculative questions in the opinion process, we
cannot answer your third question.

                       SUMMARY

           The legislature, without amending   section
        47 of article III of the Texas Constitution,
        may amend chapter 47 of the Penal Code to
        authorize the holding of those gaming activ-
        ities that do not comprise the elements of   a
        lottery, i.e., consideration,     prize,   and
        chance. Whether any specific gaming activity
        involves the dominating element of skill, as
        opposed to chance, is a question of fact that
        this office cannot resolve in the opinion
        process.                        I        .




                                     JIM     MATTOX
                                     Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKIEY
Special Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jim Moel,linger
Assistant Attorney General




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