CONDUCT OF CERTAIN GAMES BY AGRICULTURAL FAIRS

GAMBLING ‑- LOTTERIES ‑- FAIRS ‑- AGRICULTURAL ‑- CONDUCT OF CERTAIN GAMES BY AGRICULTURAL FAIRS

Applicability of chapter 280, Laws of 1971, 1st Ex. Sess., to bingo, raffles, amusement games, to other gambling games, and to games of skill, when conducted as part of an agricultural fair.

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                                                                    July 27, 1971

Honorable Damon R.Canfield
State Senator, 8th District
1368 Upland Drive
Sunnyside, Washington 98944

                                                                                                                 Cite as:  AGO 1971 No. 21

Dear Sir:

            By letter previously acknowledged you have requested an opinion of this office with regard to the types of games which, when operated by agricultural fairs, will be exempt from criminal penalties under the provisions of chapter 280, Laws of 1971, 1st Ex.Sess.

            Our answer to your question is set forth in the following analysis.

                                                                     ANALYSIS

            By its enactment of chapter 280, Laws of 1971, 1st Ex.Sess., the legislature enacted a comprehensive new regulatory law dealing with all types of gambling activities.  This act will become effective onAugust 9, 1971, ninety days after adjournment of the session at which it was enacted.

            Section 23 of the act repeals most of the prior statutes relating to gambling as contained in chapter 9.47 RCW.  On the other hand, the provisions of chapter 9.59 RCW, relating to lotteries, remain in effect but are declared inapplicable to ". . . those nonprofessional gambling activities enumerated in section 16 . . ."  See § 3, chapter 280, Laws of 1971, 1st Ex. Sess., which reads in full as follows:

             [[Orig. Op. Page 2]]

            "Whoever engages in professional gambling, or knowingly causes, aids, abets, or conspires with another to engage in professional gambling, shall be guilty of a felony and fined not more than one hundred thousand dollars or imprisoned not more than five years or both:  PROVIDED, HOWEVER, That this section and the provisions of chapter 9.59 RCW shall not apply to those nonprofessional gambling activities enumerated in section 16 of this 1971 amendatory act or to any act or acts in furtherance thereof."

            The term "gambling" is defined in § 2 (2) of the act as follows:

            "A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.  Gambling does not include parimutuel betting as authorized by chapter 67.16 RCW, bona fide business transactions valid under the law of contracts, including, but not limited to, contracts for the purchase or sale at a future date of securities or commodities, and agreements to compensate for loss caused by the happening of chance, including, but not limited to, contracts of indemnity or guarantee and life, health or accident insurance."

            The basic approach of this new act is to classify all gambling activity as either professional or nonprofessional, according to its type and the nature of the organization which conducts it.  Professional gambling is subject to a range of criminal sanctions, including a fine of up to $100,000 and five years imprisonment, whereas nonprofessional gambling is subject only to civil sanction through court injunction as a means of control or prohibition.  Section 16, to which reference is made in § 3, supra, provides that:

            "A person or an organization is not engaged in 'professional gambling' as defined in section 2, subsection (5) of this 1971 amendatory act when (1) such person or organization  [[Orig. Op. Page 3]] is engaged in such nonprofessional gambling activities as bingo, raffles, or amusement games, all as defined in this 1971 amendatory act."

            The terms "bingo," "raffles," and "amusement games" are defined, respectively, in subsections (11) through (13) of § 2 of the act as follows:

            "(11) 'Bingo' means a game in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random and in which no cards are sold except at the time and place of said game, when said game is conducted by a bona fide charitable or nonprofit organization which does not conduct or allow its premises to be used for conducting bingo on more than three occasions per week and which does not conduct bingo in any location which is used for conducting bingo on more than three occasions per week, or if an agricultural fair authorized under chapters 15.76 and 36.37 RCW, which does not conduct bingo on more than twelve consecutive days in any calendar year, no person other than a bona fide member of said organization takes any part in the management or operation of said game, and no person who takes any part in the management or operation of said game takes any part in the management or operation of any game conducted by any other organization or any other branch of the same organization and no part of the proceeds thereof inure to the benefit of any person other than the organization conducting said game.

            "(12) 'Raffle' means a game in which tickets bearing an individual number are sold for not more than one dollar each and in which a prize or prizes are awarded on the basis of a drawing from said tickets by the person or persons conducting the game, when said game is conducted by a bona fide charitable or nonprofit organization, no person other than a bona fide member of said organization takes any part in the management or operation of said game, and  [[Orig. Op. Page 4]] no part of the proceeds thereof inure to the benefit of any person other than the organization conducting said game.

            "(13) 'Amusement game' means a game played for entertainment in which:

            "(a) The contestant actively participates;

            "(b) The outcome depends in a material degree upon the skill of the contestant;

            "(c) Only merchandise prizes are awarded;

            "(d) The outcome is not in the control of the operator;

            "(e) The wagers are placed, the winners are determined, and a distribution of prizes or property is made in the presence of all persons placing wagers at such game; and

            "(f) Said game is conducted by a bona fide charitable or nonprofit organization, no person other than a bona fide member of said organization takes any part in the management or operation of said game, including the furnishing of equipment, and no part of the proceeds thereof inure to the benefit of any person other than the organization conducting such game or said game is conducted as part of any agricultural fair as authorized under chapters 15.76 and 36.37 RCW."

            Finally, we must note the meaning of "bona fide charitable or nonprofit organization," as used throughout the foregoing three subsections.  This term is defined by subsection (14) of § 2 as meaning:

            ". . . any organization duly existing under the provisions of chapters 24.12, 24.20 or 24.28 RCW, any agricultural fair authorized under the provisions of chapters 15.76 or 36.37 RCW, or any nonprofit corporation duly existing under the provisions of chapter 24.03 RCW for charitable, benevolent, eleemosynary, educational,  [[Orig. Op. Page 5]] civic, patriotic, political, social, fraternal, athletic or agricultural purposes only, which has been organized and is operated primarily for purposes other than the operation of bingo games, raffles, amusement games, and which receives not more than five thousand dollars or twenty-five percent of its gross receipts, whichever is the greater, in any calendar year from the operation of bingo, raffles, amusement games, but these limitations on receipts shall not apply to any organization which conducts only one raffle per calendar year, the total gross income from which does not exceed twenty thousand dollars, and which does not conduct bingo games, amusement games.  The fact that contributions to an organization do not qualify for charitable contribution deduction purposes or that the organization is not otherwise exempt from payment of federal income taxes pursuant to the Internal Revenue Code of 1954, as amended, shall constitute prima facie evidence that the organization is not a bona fide charitable or nonprofit organization for the purposes of this section."

            With all of the foregoing in mind, our full answer to your question is as follows:

            A. Games not Dependent upon Chance:

            Because of the definition of "gambling" as set forth in § 2 (2), supra, it follows that a game of skill not involving any element of chance is not gambling at all and may be conducted by an agricultural fair, or by any other person or organization, without violating either the criminal or the civil sanctions of chapter 280, Laws of 1971, 1st Ex. Sess.

            B. Gambling Games:

            Conversely, if the game in question does constitute "gambling" as thus defined, it is subject to criminal sanctions as "professional" gambling unless it falls within the provisions of § 16, supra, dealing with bingo, raffles, and amusement games.

             [[Orig. Op. Page 6]]

            C. Bingo:

            The game of bingo, when conducted by an agricultural fair, is exempt from the criminal penalties for professional gambling under the act when all of the following conditions are met:

            (1) The organization conducting the game ‑

                        (a) is formally authorized to conduct agricultural fairs under state statutes;

                        (b) is operated primarily for purposes other than bingo, raffles or amusement games;

                        (c) does not receive more than five thousand dollars, or twenty-five percent of its gross receipts from all sources in any calendar year, whichever is the greater, from the operation of bingo, raffles or amusement games taken together.

            (2) Only members of the organization take part in the management or operation of the bingo game.

            (3) No portion of the proceeds of the bingo game may benefit any person other than the organization which conducts it.

            D. Raffles:

            Since an agricultural fair comes within the definition of "bona fide charitable or nonprofit organization" under § 2 (14), supra, where it is authorized under the provisions of chapters 15.76 and 36.37 RCW, it follows that a fair so authorized may, without criminal sanction, conduct raffles as defined in § 2 (12) of the act on the same basis as any other such organization.  This means, in essence, that an agricultural fair so authorized, if operated primarily for purposes other than bingo, raffles or amusement games, may conduct raffles if:

            (1) (a) The organization does not receive more than $5,000 or twenty-five percent of its gross receipts, whichever is the greater, in any calendar year from the operation of bingo, raffles or amusement games taken together;

             [[Orig. Op. Page 7]]

            OR (b) The organization does not conduct bingo or amusement games, and conducts only one raffle per year, in which case that one raffle may produce not more than $20,000 without regard to the limitations in the preceding subparagraph.

            (2) Only members of the organization take part in the management or operation of the raffle.

            (3) No portion of the proceeds of the raffle benefits any person other than the organization which conducts it.

            (4) Tickets for the raffle are sold for not more than one dollar each.

            E. Amusement Games Conducted as Part of an Agricultural Fair:

            Again, as in the case of bingo and raffles, the organization ‑ in order to conduct "amusement games" without criminal sanction under the act ‑ must be one which:

            (1) Is formally authorized to conduct agricultural fairs under state statutes.

            (2) Is operated primarily for purposes other than bingo, raffles or amusement games.

            (3) Does not receive more than $5,000, or twenty-five percent of its gross receipts from all sources, whichever is the greater, in any calendar year from the operation of bingo, raffles or amusement games taken together.1/

             [[Orig. Op. Page 8]]

            Furthermore, any amusement games which are conducted by such organization must meet all of the following criteria:

            (1) Such games must involve a substantial amount of skill, and the outcome must not be in the control of the operator.

            (2) Only merchandise prizes may be awarded.

            (3) The entire game, including awarding of prizes, must take place in the presence of everyone placing wagers on the game.

            With all of these criteria in mind, we next turn to the portion of your letter in which you have listed various examples of fun games which you describe as having ". . . been enjoyed as clean, inexpensive fun for generations . . ." including:

            ". . . throwing darts at targets or balloons, throwing baseballs at dolls or tenpins on racks, throwing rings, tossing small coins into such merchandise prizes as dishes, vases, etc., operating electronic horse‑racing devices, operating shooting galleries, and the like."

            Of course, it is not possible to pass, definitively, upon each and every one of the foregoing types of games (in terms of the applicability or nonapplicability of the various provisions of the act here under consideration) without a full detailed description of all of the facts pertaining to each game.  In other words, the applicability of the various criteria which we have set forth above to any particular game conducted by an agricultural fair will, necessarily, depend upon all of the facts involved in each game.  If a game is purely one of skill, with no element of chance involved, it will not be subject to criminal sanction under the act because it will not constitute "gambling" at all.  At the other end of the spectrum, if the game is purely one of chance, it will constitute "professional" gambling and thus be subject to criminal sanction unless it is either the game of bingo or a raffle and it is conducted in the manner described in "B" or "C" above, whichever is applicable.  If the game falls in between these two extremes ‑ i.e., if both chance and skill are involved in its play ‑ it must then meet the definition of an "amusement game" in order to be immune from the enforcement of criminal sanctions.

             [[Orig. Op. Page 9]]

            Thus, by way of example only and without purporting to pass upon the precise status of any particular game, it might well be found that a game involving the throwing of darts at balloons is purely a game of skill ‑ and, therefore, not a gambling game at all.  Comparatively speaking, those games involving the throwing of baseballs at dolls or at tenpins on racks would seem to involve less skill and a greater degree of chance, and thus are probably permissible only if conducted as "amusement games" ‑ a conclusion which, most likely, would also apply to the operation of a shooting gallery, particularly if the placement of the targets is, to some degree, dependent upon chance.  In the case of such "amusement games," the important point to remember, beyond the fact that some material degree of skill must be involved along with an element of chance, is that the game in question must in any event be conducted openly and honestly ‑ fully in the presence of everyone placing wagers on the game and without its outcome being under the control of the operator.