                 TO BE PUBLISHED IN THE OFFICIAL REPORTS

                      OFFICE OF THE ATTORNEY GENERAL
                                State of California

                                   BILL LOCKYER
                                   Attorney General



                                            :
                 OPINION                    :                 No. 98-1103
                                            :
                     of                     :                 May 5, 1999
                                            :
             BILL LOCKYER                   :
             Attorney General               :
                                            :
         CLAYTON P. ROCHE                   :
         Deputy Attorney General            :
                                            :




         THE HONORABLE ELAINE ALQUIST, MEMBER OF THE
CALIFORNIA STATE ASSEMBLY, has requested an opinion on the following question:

             May a person, on behalf of another, purchase California state lottery tickets
from an authorized retailer and charge a fee for the services rendered?


                                    CONCLUSION

              A person may not, on behalf of another, purchase California state lottery
tickets from an authorized retailer and charge a fee for the services rendered.




                                            1                                     98-1103
                                                         ANALYSIS

                A company is proposing to buy state lottery tickets on behalf of its customers.
A customer would telephone the company, ordering a specified number of tickets and paying
for the tickets by credit card. The company would purchase the tickets from an authorized
ticket retailer and deliver the tickets to the customer. If a prize is won, the company would
assist the customer in receiving the prize. For its services, the company would charge the
customer a fee, for example, 50 cents per ticket purchased. We are asked whether the
company may operate such a business. We conclude that it may not.

               Generally speaking, conducting a lottery in California is illegal. The
Constitution provides in part: “The Legislature has no power to authorize lotteries and shall
prohibit the sale of lottery tickets in the State.” (Cal. Const., art. IV, § 19, subd. (a).) The
Legislature has carried out with this constitutional directive by enacting Penal Code sections
319-329.1 In addition, the Legislature has proscribed numerous gaming (§§ 330-337s) and
horse racing (§§ 337.1-337.9) activities. Of particular significance here is the prohibition
contained in section 337a:

                 “Every person,

                 “. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

              “3. Who, whether for gain, hire, reward, or gratuitously, or otherwise,
       receives, holds, or forwards, or purports or pretends to receive, hold, or
       forward, in any manner whatsoever, any money, thing or consideration of
       value, or the equivalent or memorandum thereof, staked, pledged, bet or
       wagered, or to be staked, pledged, bet or wagered . . . upon the result, or
       purported result, of any lot, chance, casualty, unknown or contingent event
       whatsoever . . .

                 “. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

             “. . . is punishable by imprisonment in the county jail for a period of not
       more than one year or in the state prison.

                 “. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”



       1
           All references to the Penal Code prior to footnote 2 are by section number only.

                                                                   2                                                             98-1103
               With respect to the proposal in question, the company would be receiving
money from its customers to be wagered on the results of the state lottery by purchasing
lottery tickets. Section 337a prohibits a person from acting as the agent of another in
purchasing lottery tickets and charging for the services rendered.

                The proposal considered here is similar to the one examined by the court in
Advanced Delivery Service, Inc. v. Gates (1986) 183 Cal.App.3d 967. In Gates, a company
proposed taking money from customers and going to a race track to place bets on horses
picked by the customers. The company would charge a fee for the “messenger” service
rendered and return the pari-mutual tickets to the customers. The court had no difficulty in
concluding that the proposal would violate section 337a, relying upon a long line of cases
(see, e.g., In re Walker (1938) 11 Cal.2d 464, 468-469; People v. Tompkins (1952) 109
Cal.App.2d 215, 221-222; People v. Haughey (1941) 48 Cal.App.2d 506, 509-511). (Id.,
at pp. 972-975.) The court noted that nothing in the Horse Racing Act provided an
exemption from the provisions of section 337a where the company would be betting with
money it had received in the capacity as an agent. (Id., at pp. 975-977.)

                In Gates, the court examined the Horse Racing Act as an exception to the
general Penal Code prohibitions against gambling, since the Constitution expressly allows
the Legislature to regulate “horse race meetings and wagering on the results.” (Cal. Const.,
art. IV, § 19, subd. (b).) Likewise, the Constitution authorizes the California State Lottery
as an exception to the operation of lotteries generally proscribed by the Constitution and the
Penal Code. (Cal. Const., art IV, § 19, subd. (d).) The California State Lottery Act of 1984
(Gov. Code, §§ 8880-8880.72; “Act”) implements this constitutional authorization. We
have previously determined that the Act’s provisions create an exception to the general
Penal Code prohibitions. (77 Ops.Cal.Atty.Gen. 89, 92 (1994); see §§ 8880.6, 8880.70.)

              An examination of the Act reveals nothing that would exempt the proposed
activity from the prohibition of Penal Code section 337a. The company, it is conceded,
would not qualify as a “retailer” of state lottery tickets. (See §§ 8880.47-8880.55.) While
the company would purchase the lottery tickets from an authorized retailer, such purchase
would not convert the company itself into an authorized retailer.

               The proposal does not constitute a lottery “pool” of multiple purchasers of a
lottery ticket. (§ 8880.33; see 77 Ops.Cal.Atty.Gen., supra, at 90-93.) While multiple
purchasers may have a representative to purchase tickets and manage the pooling
arrangement (77 Ops.Cal.Atty.Gen., supra, at 90-93), such is not the proposal here.




                                              3                                      98-1103
               No other law would exempt the company’s proposal from the prohibition of
Penal Code section 337a. As pointed out by the court in Advanced Delivery Service, Inc.
v. Gates, supra, 183 Cal.App.3d at 977, any changes in the governing statutes are “a matter
best left to the Legislature with its fact finding capabilities through hearings at which all
interested parties may have input.”

                We conclude that a person may not, on behalf of another, purchase California
state lottery tickets from an authorized retailer and charge a fee for the services rendered.

                                         *****




                                             4                                       98-1103
