                                   ATTORNEY GENERAL OF TEXAS
                                               GREG       ABBOTT




                                                September 20,2005



The Honorable Jane Nelson, Chair                           Opinion No. GA-0358
Committee on Health and Human Services
Texas State Senate                                         Re: Whether the legislature, in the absence of a
Post Office Box 12068                                      constitutional amendment,    may authorize the
Austin, Texas 787 1 l-2068                                 creation of county gaming districts on a local
                                                           option basis to administer a state video lottery
                                                           (RQ-0332-GA)

Dear Senator Nelson:

        You ask whether a bill, proposed but not enacted during the regular session of the Seventy-
ninth Legislature, would have been effective in the absence of a constitutional amendment. ’ Senate
Bill 1326 sought, by adding chapter 328 to the Local Government Code, to authorize the creation
of county gaming districts on a local option basis to administer a state video lottery. See Tex. S.B.
1326, 79th Leg., R.S. (2005).

         Article III, section 47(a) of the Texas Constitution requires the legislature to “pass laws
prohibiting lotteries and gift enterprises.” TEX. CONST.art. III, 5 47(a). In the 1980s the legislature
proposed and the voters approved three amendments to article III, section 47 that permitted the
operation of bingo games and charitable raffles by specific religious and nonprofit organizations.
See id. 5 47(b)-(d). In 1991 the electorate adopted an amendment that pert-nits the legislature to
“authorize the State to operate lotteries and [to] authorize the State to enter into a contract with one
or more legal entities that will operate lotteries on behalf of the State.” See id. 5 47(e); Tex. Att’y
Gen. Op. No. GA-0103 (2003) at 4-7.

         In Attorney General Opinion GA-01 03, this office was asked to determine “whether the
Texas Legislature may authorize the operation of video lottery terminals without an amendment
to the Texas Constitution.”       Tex. Att’y Gen. Op. No. GA-0103 (2003) at 2. The opinion first
considered the historical meaning of the term “lottery” under article III, section 47(a) of the
constitution. See TEX. CONST. art. III, 5 47(a) (requiring the legislature to “pass laws prohibiting
lotteries and gift enterprises”). On the basis of long-standing decisions of the Texas Supreme Court



          ‘Letter from Honorable   Jane Nelson, Chair, Senate Committee on Health and Human Services, to Honorable
Greg Abbott, Texas Attorney        General (Mar. 10, 2005) ( on file with Opinion Committee, also available at
http://www.oag.state.tx.us).
The Honorable Jane Nelson      - Page 2         (GA-0358)




and the Texas Court of Criminal Appeals, the opinion found that any game that contains the elements
of prize, chance, and consideration constitutes a “lottery.”

          Section 328.05 1 of the proposed legislation would have permitted the commissioners court
of any county to “call an election on the question of creating a county gaming district in the county
. . . to permit the conduct of video lottery games in the district.” Tex. S.B. 1326, 79th Leg., R.S.,
5 1, sec. 328.051 (2005). Section 328.001 would have defined “video lottery” as “the conduct of
video lottery games on behalf of this state as authorized under this chapter,” and “video lottery
game” as “any game of chance, including a game of chance in which the outcome may be partially
determined by skill or ability, that for consideration may be played by an individual on an electronic
machine or video display.” Id. sec. 328.001(3)-(4). If the proposition to create a county gaming
district were supported by a majority of the voters in the election, the district would be created. See
id. sec. 328.05 1(d).

          An individual or a company interested in obtaining a “video lottery retailer” license would
apply to the Texas Lottery Commission (the “Commission”), which could by rule establish the
minimum qualifications therefor. Id. sec. 328.101(a), (c). A person holding a video lottery retailer
license would be authorized to “operate video lottery games in accordance with this chapter and
commission rules at one location approved by the commission within the boundaries of each
district.” Id. sec. 328.101(b). The bill would also have established procedures for regulating the
conduct of games, for issuing, suspending and revoking licenses, and for division of the proceeds
realized from the operation of games. See id. sets. 328.104-. 105, .15 1, .153-. 154.

          Senate Bill 1326, as we have indicated, would have authorized “a person that holds a license
. . . [to] operate video lottery games in accordance with this chapter and [Lottery] [Clommission
rules.” Id. sec. 328.101(b).      The principal difference between the substance of the bill under
consideration here and the facts presented in Attorney General Opinion GA-0103 is that, in the
situation you pose, there was a specific bill detailing precisely the method by which a person would
have been authorized to operate video lottery terminals, whereas in the latter we were considering
the question in the abstract. Senate Bill 1326 basically would have authorized local option elections
by which the voters in each county or precinct could approve the establishment of a gaming district
and delegated to the various commissioners courts the power to initiate the process of permitting the
operation of video lottery terminals.

         It is well established that the legislature may not authorize an action that the Texas
Constitution prohibits. Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers ’Comp.
Comm’n, 74 S.W.3d 377, 381 (Tex. 2002); Maher v. Lasater, 354 S.W.2d 923,925 (Tex. 1962).
Furthermore, the legislature is not empowered to delegate authority that it does not possess. City of
Amarillo v. Tutor, 267 S. W. 697,699 (Tex. 1924). Because the operation of video lottery terminals
is not allowed by article III, section 47(e) of the Texas Constitution, we conclude that the legislature
may not, absent a constitutional amendment, authorize the creation of county gaming districts on a
local option basis that would then permit the Commission to administer a video lottery in those
counties.
The Honorable Jane Nelson    - Page 3        (GA-0358)




                                      SUMMARY

                       The legislature may not, absent a constitutional amendment,
               authorize the creation of county gaming districts on a local option
               basis that would then permit the Texas Lottery Commission to
               administer a video lottery in those counties.




BARRY R. MCBEE
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee
