                              AUSTIN       11. TIC&+@

                                 October     31, 1957



Honorable Nelson R. Sharpe                  Opinion No. WW-295
Assistant   District Attorney
Kleberg County Courthouse                   Re:   Whether a certain sales promo-
Kingsville,   Texas                               tion scheme his a lottery in viola-
                                                  tion of the Texas Penal Code.
Dear Mr.   Sharpe:

                 You have requested an opinion as to whether a certain sales
promotion scheme is in violation of the Texas Lottery laws.    You have stat-
ed tbat the sales promotion scheme in question known as “Lucky Day”. is
as follows:

                A business house totals its monthly sales and then divides
the number of working days in the month into the total monthly sales to de-
termine the average daily sales.    At the end of the month the daily sales
for each working day is computed and the day of the month on which the
sales most nearly approach the average daily sales for that month is de-
clared the “lucky day”.   All customers   who made purchases   of merchand-
ise on the “lucky day” receive a refund of the entire purchase price of the
articles so purchased.

                 Article   III, Section   47, of the Constitution    of Texas,   pro-
vides:

                  “The Legislature   shall pass laws prohibiting the
         establishment  of lotteries  and gift enterprises    in this State,
         as well as the sale of tickets in lotteries,   gift enterprises
         or other evasions involving the lottery principle,      established
         or existing in other States.”

                 Article   654, Penal     Code of Texas,    1925,   provides:

                 “If any person shall establish a lottery or dispose of
         any estate, real or personal,   by lottery, he shall be fined not
         less than one hundred nor more than one thousand dollars; or
         if any person shall sell, offer for sale or keep for sale any
         ticket or part ticket in any lottery, he shall be fined not less
         than ten nor more than fifty dollars.”
Hon. Nelson   R. Sharpe,   page 2 (WW-295)




                 There is no Texas statute which defines a lottery, but the
Texas courts have consistently      adopted the following definition:    A lottery
is a scheme for the distribution of prizes by lot or chance among persons
who have paid or who have agreed to pay a valuable consideration          for the
opportunity to win these awards.      The Texas courts have consistently       held
that a lottery consists   of three essential   elements,   namely, (1) a prize or
prizes,  (2) the award or distribution    of the prize or prizes by chance, and
(3) the payment either directly or indirectly by the participants ~of a con-
sideration for the right or privilege    of participating.   City of Wink v. Grif-
fith Amusement     Company,    129 Tex. 40, 100 S.W.Zd 695 (1956); Cole v. State,
133 Tex.Crim.     548, 112 S.W.2d 725 (1938); Smith v. State, 136 Tex.Crim.
611, 127 S,W.2d 297 (1939); Brice V. State, 242 S.W.2d 433 (Tex.Crim.           1951).

                 The sales promotion scheme that you have described            is one
whereby a merchant invites customers         to purchase his merchandise       with
the offer that the consideration   that the customer exchanges for the mer-
chandise will cover the purchase price of the merchandise           and the chance
to win a prize, i.e., the right to participate    in the merchant’s    “lucky day”.
It seems clear that such a scheme falls within the court’s definition of a
lottery and the three essential   elements of a lottery, (1) prize, (2) chance,
and (3) consideration,   are present.   It is, therefore,  our opinion that such a
sales promotion scheme is in violation of Article 654, PenalCode            of Texas,
1925.

                                  SUMMARY

                 A sales promotion scheme whereby a business house es-
tablishes a “lucky day” and refunds to customers      who made purchases   of
merchandise    on the “lucky day” the purchase price of the articles  so pur-
chased, is a lottery and in violation of Article 654, PenalCode of Texas, 1925.

APPROVED:                               Yours   very truly,

OPINION    COMMITTEE:                   WILL WILSON
                                        Attorney General      of Texas
H. Grady Chandler, Chairman
J. C. Davis, Jr.
W. V. Geppert
C. K. Richards                          By @&d           Q-J&
John Minton
                                             Richard B. Stone
George P. Blackburn
                                             Assistant Attorney    General
REVIEWED  FOR THE
ATTORNEYGENERAL

BY:   James   N. Ludlum
