Untitled Texas Attorney General Opinion

Honorable Fred T. Porter CciuntyAttorney Kaufman~Countg Kaufman, Texas Dear Sir: Opinion NO. 0-2063 RE: Whether or not "Box Office Insur- ance" constitutes a lottery. We have carefully considered the question presented in your letter of March 7, 1940, wherein you request the opinion of this Department as to whether or not the "BOX Qf- flee Insurance Plan" of a local theatre constitutes a lottery in violation of Article 654 of the Penal Code. Your letter reads In part as follows: "I would illceto have an opinion from your department on whether the following plan of stimulating attendance at theatres is a lottery under the authorities in this state. The plan is as follows: "It is called 'Box Office Insurance' and a printed policy is issued to each and every person contacted by the management of the show whether a patron or not. This policy is worth the face value of $25.00 under certain conai- tions. Once a week, on a certain night select- ed, the managment calls for numbers to be given by persona in the audience. Four numbers are asked for, each being below 10, and these four numbers when arranged together form the number of the policy. Before the issuance of any pol- icy the person receiving such signs an applica- tion card which is numbered and put In a file. If the person whose application card has the number called out by the audience Is present in the theatre,he or she receives the cash value of the policy; but if the person is not in the theatre a'tthe time of the calling out of the number aiidname, then the name of the one whose application card was so numbered shall be prominently posted in the lobby of the theatre for a period of one month, and any time during Honorable Fred T. Porter, page 2 O-2063 the month the holder of that policy can call and the management will pay the amount of the policy to such holder. If at the end of the one month period, no one has called and presented such pol- icy, then the amount of such policy is donated by the theatre management to the Parent-Teachers As- sociation of the town or if there is no Parents Teachers Association then to some other like organization. There 'isattached'hereto a copy of the Policy, application card and envelope for further Information in regard to the plan. Section 47 of Article III, of the Constitution of Texas, reads: "The Legislature shall pass laws prohlbit- ing the establishment of lotteries and gift en- terurisea in this state, as well as the sale of tickets in lotteries, gift enterprises or other evasions involving the lottery principal, estab- lished or existing, in other states." Article 654 of the Penal Code, reads as follows: "If any person shall establish a lot~tergor dispose of any estate, real or personal; by lot- tery, he shall be fined not leas than One Hundred ($100) Dollars nor more than One Thousand ($1,000) Dollars; or if any person shall sell, offer for sale or keep for sale any t.lcketsor part tickets in an lottery, he shall be fined not less than Ten ($10) Dollars nor more than Fifty ($50) Dollars." AS stated ta you in opinion No. O-1819, dated January 27 1940, the elements essential to constitute a lottery are (1s a prize. (2) chance; (3) a consideration. City of Wink vs. Griffith Am&ement Company (Texas~Supreme Court), 100 S. W. tit) 695; Griffith Amusement Company vs. Morgan, 98 3. W. (26) . It is clear that the first two elements are present -- a prize of $25.00 is offered once a week; llkewiae, the chance element occurs when the prize is distributed to the fortunate "insured", if he is lucky enough to have his "policy" number called. Our problem concerns whether or not the necessary element of consideration is present. In this connection you point out that the money of- fered may be received by two classes of prize-winners: first, those within the.theatre who have an opportunity to witness and participate in the proceedings; and secondly, all other people who are not in attendance at the theatrd who have made Honorable Fred T. Porter, page 3 0 -2063 application for a "Box Office Insurance" policy. In the event one of the latter class of person's policy number is called, his name will be posted in a prominent place in the lobby for a period of one month, during which time he may call, Indenti- fy himself and receive the prize. Insofar as the first class is concerned, that is, pa- trons actually present in the theatre, there can be no doubt that the scheme constitutes a lottery. We quote from the language of Chief Justice Cureton, City of Wink vs. Griffith Amusement Company, supra: " .. . In the instant case, there were two different classes of possible prize winners, namely, the holders of free registration num- bers, who chose to remain outside of the theater, where neither the show nor the paraphenalia of and actual operation of the drawing could be seen, and those who, at least on 'Bank Night', paid the consideration required at the door, en- tered the theater, and saw the show, including the paraphernalia to be used in the drawing, and the actual drawing itself while comfortably seat- ed close at hand so that they might hear without fail the announcement of the winner and be pres- ent to claim the prize, each privilege a concomi- tant part of the entire scheme. It is idle to B, as to whose who entered the theater and en- joyed the Drivilenea named, that the admissiog Charge and advantages stated above and the Drize emolu- ment of the arawlniz. This admission charne is in- PeDareble ftiomthe Drivilenes enumerated, which were materlallv different from the Drlvilenes of those who remained outside of the theater hold- ins the so-called 'free' renistration numbers. It la ialeto say that the Dasment made for see- 1 -, in Dart at leaa;Leat;~r6!e for the arawi M and the chance Riven. IUZQ to be seen and done in the theatre and the ~ri- vilenes above enumerated which accomDanied them, are all a Dart of one and the same show, meaning the entire Droceedirxs inside the theater. The fact that vart of the things to be enioyed br those who Daid at the door were classed as 'free' by the defendant in error does not chance the legal effect of the transaction, or what was ac- tually done by the defendant in error, namely, for the Drice of admission to Rrant the natron not only the ODDortunitr to see end hear the DiC-2 i Honorable Fred T. Porter, page 4 0-2063 m, but to see and hear and enios the habill- ments of the 'Bsnk NiRht I, drawing, etc., detail- ed above. We are unable to see in what msnner the giving of free renlS.ration numbers to those outside of the theater would chanue the lenal effect of what was clone'inaidethe theater,*. which a charge was made; . . ." (Underscoring ours) But what of those persons who may participate "free" by merely making a plication for a policy and whose name (if they are fcrtunateP will.be ,losedin a prominent position in the lobby? Does this device constitute an atteupted evasion of the lottery laws, or is the scheme outside their purview? 1% hap been sa'Ldthat had those who conducted the famous Louisi~anaLotterv In the early days made good their promise to give s free ttcket to the president of each bank in the state, still the scheme wnuld not have escaped the condemna- tion of the laws against lotteries. The countless schemes of man to capitalize upon the natural cupidity of his fellowman are legion; yet our Texas courts have in all cases pierced the veil of subterfuge and refused to countenance artifice. This Is the position we be- lieve our courts will take should a case like the present come before them. We believe that a consideration does move to the donor of the prize in the present instant sufficient t3 coiidemnthe plan even though participation is allowed by non.patrona who have a month tc claim their prize. As in the first pa.ragraphof your letter, the purpose of the plan la to stimulate attendance, and, we suppose in aaait:on serves as an advertising scheme. Is this not at least an indirect con- sideration moving to the owner of the theatre? 'Webelieve so. As stated by Judge Graves in Cole v. State, 112 S. W. (2d) 725, on motion for rehearing: I, . . . A consideration may consist of a benefit movin& to the donor of the prize renerd- less from whom the benefit may borne. See Corpus Jurls, vol. 13, p. 311. Appellant testified thEt he thought since eatablishiriga bank night that it is possible on Tuesday night it (the attendance) had increased some, and that the advertisement for his theater, he thought, was benefited by bank night, and, in the light of c'~rknowledge of human nature, we feel,sure that, unless such henefits had accrued?,he would not ha,vecontinued such bank ntghta. (Unaerscorlng curs) Honorable Fred T. Yorter, page 5 O-2063 Likewise,~as stated by Chief Justice Gallagher in Robb hnd Rowle united, Inc., ‘et al v. State (C. C. A. 1939), 127 s. w. (2af 221; “Appellants apparently concede .that ‘Buok’ nights ab operaMa by them involved tile distri- bution of cash awards by chance, but they con- tend that nb conaidercition iias received by them for such distribution. Substantially the same contention was made in the case of State v. Robb & Rowley.Uiiited, Ihc. ;Tex. Ciir. App., 118 9. W. (2d) 917, and the court, in its opinion in that case, held that while no direct charge was made for registration, nevertheleaa the inoreaaed patronage expected by reason of the operation of such scheme, though only an indirect benefit, was a sufficient consideration to warrant its being classified as a lotter See also: Cole v. State, 133’Tex. Cr. R. 54r , 112 5. W; 2d.725, 2 and j.*.City of Wink v. Griffith, 100 9. grq&) 695, 699, par. 12, and authorities therie cl.tea i, State v: U&wan, MO. Sup., 120 S. W. (26) 1098. .~ In Featherstone v. Independent Serviaii Station Associa- ti6n, ,(C.C.A. 1928) 10 S. W. (26) 124, defendants distributed tickets to patrons of their service station good for a chadce on an,automobile to be given away. .Defendants likewise gavel away ‘&me ticket free to those who had not purchased merchan- dise, and the oourt said!,, “This testimony falls to show any material ohange in the eoheme as originally operated, but reveals a change simply in the plan o? its opera- tion. While dealers, under the nti plan, d&s- tributed tickets to noncustomers as well as to customers, .it *eems that the scheme was to dia- ‘. tribute tickets, in the me”in to customers; as the evidenoe discloses that only 8 few negligi- ble in number, were given to persons oiher than oustomers. That the giving of tickets, at-d the drawings and distribution of prices, were in- ducem6nts.to patronage and unquestionably lured customers, is shown from the very satisfactory business results that followed. Patronage thus induced was the consideration that paseed from ,, the ticket hdlder for the chanoe received , . . . . . In Smith v. ‘State, (Ct. Cr. App. 1939) 127 S. W. (26) 297, defendant received a license fee from,,retail m&chants for the privilege of joining a ‘%oah’a_ Ark orga?icatlon. Honorable Fred T. Porter, page 6 Q-2063 The merchants in turn distributed cards and stamps to the public, upon the completion of which cards a person was en- titled to participate in a chdnce to receive a substantial prize. The court tieldthat payment of these license fees to defendants by the merchants operated'aa~~an~indirecttionairler- ation for all persons who can@ to such merchants' place of business and requested a stamp-.orcard for the purpose of entering into this contest. '~Thecourt held this scheme to constitute a lottery and said: "We think'it clearly appears herein that appellant received a fee from the 145 misrchanta and dealers who paid hitia license fee and join- ed his 'Noah's Ark' organization, and that the payment of such fee operated as a consideration for the entering Into the drawing contest of all persons who'came to such dealers' place of buai- netisand requested a'card or a stamp for the pur- pose of entering this contest. That this license fee was the.uasment of a consideration movinu in- directly from the contestant and directly to the auuervisor or owner of this scheme. Moving indi- rectly, it may be for the benefit of the contestant through his merchant or dealer who also received a benefit therefore presumably at least, in the advertising that he was obtaining &a well as play- ing upon the natural cupidity of mankind to obtaln~ something for nothing, and this moving it completes the trinity of a prize arrived at by chance, and based upon a consideration, not only given by the conteatant.but received by the donor. (UM erscor- ing ours) In view of the authorities cited and for the reasons stated, you are respectfully advised that it is the opinion of this Department that the "Box Office Inauratice"plan under the facts stat&3 constitutes a lottery in violation of Article 654 of the Penal Code of this State. Very truly yours JDS :LM:wc ATTORNBY GENERAL OF TKXAS APPROVED MAR 18, 1940 By s/Walter R. Kbch s/Gerald C. Mann Assistant ATTORNEY GENERAL OF TEXAS By a/J&me%.D. Stillen Approved OpIniofiCommittee James D. Smullen By s/BWB Chairman