LOTTERIES: SALES STIMULATION PLAN, WHEREBY TICKETS HANDED TO CUSTOMERS WITH AND IN PROPORTION TO MERCHANDISE PURCHASED REPRESENT CHANCES TO WIN VALUABLE PRIZE AT DRAWING CONDUCTED BY THE STORE

LOTTERIES: SALES STIMULATION PLAN, WHEREBY TICKETS HANDED TO CUSTOMERS WITH AND IN PROPORTION TO MERCHANDISE PURCHASED REPRESENT CHANCES TO WIN VALUABLE PRIZE AT DRAWING CONDUCTED BY THE STORE.

Sales stimulation plan, whereby tickets handed to customers with and in proportion to merchandise purchased represent chances to win valuable prize at drawing conducted by the store, constitutes lottery under RCW 9.59.010, and is unlawful.

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                                                                    June 1, 1954

Honorable Paul N. Luvera
State Senator
2102 Nine Street
Anacortes, Washington                                                                                                Cite as:  AGO 53-55 No. 264

Dear Sir:

            By letter as previously acknowledged, you have requested the opinion of this office upon a particular retail sales stimulation plan.  To make clear the legal problem involved, we have taken the liberty of summarizing our understanding of the plan as described by you.

            A store conducting this program advertises or displays a valuable prize.  Persons shopping in the store receive tickets, with and in proportion to the price of merchandise purchased, which represent chances to win the prize in a drawing to be held by the store.

            Your question is whether or not this plan is lawful.

            It is our opinion‑-although we do not undertake to pass upon any other plan or state of facts at this time‑-that the operation described constitutes a lottery within the contemplation of RCW 9.59.010, and is therefore unlawful.

             [[Orig. Op. Page 2]]

                                                                     ANALYSIS

            The applicable statute, RCW 9.59.010, provides in relevant part that:

            "A lottery is a scheme for the distribution of money or property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance, whether it is called a lottery, raffle, gift enterprise, or by any other name, and is hereby declared unlawful and a public nuisance.

            "* * *" (Emphasis supplied)

            As the underscoring indicates, three elements compose a lottery:  (1) prize, (2) chance, and (3) consideration.  Society Theater v. Seattle, 118 Wash. 258, 203 Pac. 21; State v. Danz, 140 Wash. 546, 250 Pac. 37.  Elements (1) and (2) are clearly present here.  The question, as always in the examination of such plans, is the existence or absence of consideration for the chance.

            It may be said first that our office has previously given its opinion that such a program did constitute a lottery within the quoted statute.  A copy of that opinion, written for the prosecuting attorney of Chelan County on 7 April, 1916, has been enclosed for your convenience.  The facts presented to us were that

            "A certain mercantile establishment in the city of Wenatchee issues a chance upon an automobile with each purchase of a certain amount made from it.  The award of the automobile is made by picking a number by chance from a box containing numbers held by various purchasers * * *."

            Pointing out that our statute was the same as those of New York and Minnesota, from which it was derived, the writer of that opinion cited cases from both states holding that the requisite consideration need not be paid exclusively for the chance, but may be given for a combination of the chance and merchandise.  Later decisions from those jurisdictions hold to that view:  seeState v. Powell, 170 Minn. 239, 212 N.W. 169, 57 A.L.R. 425, andPeople v. Miller, 271 N.Y. 44, 2 N.E. (2d) 38.

             [[Orig. Op. Page 3]]

            There was no decision of our Supreme Court extant upon the question at that time.  The leading Washington case on consideration in lotteries is now State v. Danz, supra, handed down by the courten banc in 1926.  It is not directly in point upon the facts, having involved a "country store" night at a theater in the course of which donated merchandise prizes were distributed to the patrons, who had received chance tickets with their admission, on the basis of a drawing.

            The statement of the majority as to consideration, however, is in line with the position taken in the cited opinion of this office.  Thus it is said at p. 548 of 140 Wash:

            "* * *  A valuable consideration was paid.  What did the purchaser get?  Not simply a ticket for the screen show, but a ticket to that and to the chance drawing.  The appellants and their patrons so understood and intended it.  That was the plan and purpose for which the consideration was paid.  * * *"

            Reference to the briefs also shows that the court upheld, against strenuous argument, the following instruction to the jury:

            "You are instructed that if the evidence convinces you beyond a reasonable doubt that the defendants * * * gave tickets, entitling the holder thereof to participate in the distribution of personal property by chance, to persons who paid the defendants * * * the sum of 15¢ or 25¢ as the price of admission to the Hollywood Theater, then the defendants received a valuable consideration for said tickets."

            The court's approval of this instruction shows that as a matter of law those facts constituted a lottery, without regard to the subjective intent of the purchaser of the admission.

            The principle stated will of course control this office, although that case was decided by a widely divided court.  Thus we can say that the consideration needed to bring a plan within the interdiction of the statute may be paid for a combination of the merchandise and the chance, and not merely for the chance alone.

             [[Orig. Op. Page 4]]

            Although some courts have taken the opposite position, research discloses that the strong weight of authority, on facts similar or identical to those you submit, holds that the transaction is a lottery.  In this connection see: 54 C.J.S. 850et seq., Lotteries, § 4; 24 Am.Jur. 474, Gaming and Prize Contests, § 101; 34 Am.Jur. 654, Lotteries, § 10; Annotations in 48 A.L.R. 1115, 57 A.L.R. 424, and 103 A.L.R. 866, and Street, Law of Gaming (British, 1st ed. 1937) 208 et seq., Proposition 34.

            In view of the principle announced in the Danz case as to consideration, and because of the support therefor found in the authorities collected in the places cited in the foregoing paragraph, we conclude that the plan described is a lottery under the meaning of RCW 9.59.010.  However, inasmuch as particular facts or circumstances may alter the case, we do not wish to be understood as having expressed an opinion upon any other plan.

            We sincerely hope that this discussion will clarify the matter for you.

Very truly yours,

DON EASTVOLD
Attorney General

A. J. HUTTON, JR.
Assistant Attorney General