Request By:
Mr. David E. Murrell
Counsel for National Federation
of the Blind of Kentucky
Suite 1508 Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; Elizabeth E. Blackford, Assistant Attorney General
You have written to ask whether it would be legal to hold a card tournament where the proceeds from the entry fee would be donated to the National Federation of the Blind of Kentucky. As proposed, each participant would pay a $10.00 entry fee, and the tournament winner would win $500. Two games would be played; Five Card Draw Poker and Rook. In both games there will be elimination rounds with point scoring based on who has the most chips at the end of the round. The ultimate winner is the person who has the most chips at the end of the tournament. For reasons discussed below, this office is of the opinion that the proposed card tournament is legal only if the organization holding the tournament qualifies for charitable gaming status.
KRS Chapter 528 prohibits gambling which is defined in KRS 528.020(3) as follows:
"'Gambling' means staking or risking something of value upon the outcome of a contest, game, gaming scheme or gaming device which is based upon the element of chance, in accord with an agreement or understanding that someone will receive something of value in the event of a certain outcome." (Emphasis added.)
This section proscribes "games of chance" where the outcome is a result of the combined elements of skill and of chance as well as lotteries or gaming schemes wherein the outcome is determined solely by chance, but does not prohibit "games of skill" wherein the result of the game depends entirely upon the skill of the player. Cf. House Floor amendment to SB 277, 80 BR 1323/HCS, which exempts certain games of chance; also see 135 ALR 104, Games of Chance or Skill. Accordingly, the first question to be answered is: Are Rook and Draw Poker games of chance or games of skill?
The Kentucky courts have not specifically addressed the question of what constitutes a game of chance. However, other courts have applied a standard test. See, for example, Re Allen, 59 Cal.2d, 27Cal. Rptr, 168, 377 P.2d 280, 97 ALR2d 1415 (1962);Stubbs v. Dick, et al., Ohio 89 N.E.2d 480 (1949);State v. Stroupe, 76 S.E.2d 313, 238 N.C. 34 (1953);Indoor Recreation Enterprises v. Douglas, 194 Neb. 715, 235 N.W.2d 398 (1975);135 ALR 104. In considering this question, the Court in Stubbs v. Dicks, etal., supra, said:
"The basic question is: what is a game of chance?
"On this point, one of the earliest leading cases states: 'Universal acceptance of a "game of chance" is such a game as is determined entirely or in part by lot or mere luck, and in which judgment, practice, skill or adroitness have honestly no office at all. [Cites omitted.]'" Id., p. 482.
The Court, in State v. Stroupe, supra, stated the test to be applied in the following fashion:
"It would seem that the test of the character of any kind of a game . . . as to whether it is a game of chance or a game of skill is not whether it contains an element of chance or an element of skill, but which of these is the dominating element that determines the result of the game, to be found from the facts of each particular game. Or to speak alternatively, whether or not the element of chance is present in such a manner as to thwart the exercise of skill or judgment. [Cites omitted.] 'It is the character of the game and not the skill or want of skill of the player, which determines whether the game is one of chance or skill. A game of chance does not cease to be such because it calls for the exercise of skill, nor does a game of skill cease to be such because at times its result is determined by some unforeseen accident.' [Cite omitted]" Id., pp. 316-317.
Rook is like the game of Bridge in that the players must bid their cards and must make the bid in order to win. Some courts have held that Bridge is a game of skill 1 which is not subject to gambling prohibitions. However, others have deemed it a game of chance because of the fact the luck of the draw determines the worth of the hand. 2 In Rook, as in Bridge, skill is certainly necessary to proper bidding and playing out of the hand, but the luck of the draw determines whether the hand is bidable or playable. Skill cannot overcome the fact that a player is dealt a bad hand. The game is one in which the element of chance may thwart skill. Therefore, this office is of the opinion that Rook is a 'game of chance' which falls within the proscriptions of KRS Chapter 528.
By like token, draw poker does involve an element of skill, but is, by its character, predominately a game of chance. See 135 ALR 104, 130-134. Therefore, it too falls within the proscriptions of KRS Chapter 528.
Inasmuch as the holding of a Poker and Rook tournament would, generally speaking, be illegal, the question becomes whether there is any exemption which would permit such a tournament in your case. During this session, the legislature, by way of a House floor amendment to SB 277, 80 BR 1323/HCS, added a new subsection to KRS 528.020 which provides:
"(10)(a) 'Charitable gaming' means games of chance, including bingo, operated by charitable or religious organizations or institutions. In order to assume a charitable gaming status, the charitable or religious organization or institution and the gaming activity conducted thereby shall conform to the following requirements:
"1. The organization or institution conducting the gaming activity shall maintain a charitable or religious tax exemption according to the federal internal revenue code and shall have maintained such federal tax exempt status for a period of five (5) years prior to any prosecution under this chapter;
"2. The gaming activity conducted by such organization or institution shall be operated exclusively by volunteer personnel receiving no remuneration whatsoever by their services;
"3. Any proceeds resulting from the operation of charitable gaming activity shall be utilized solely for purposes consistent with the charitable or religious functions and objectives for which the operating organization or institution received and maintained federal tax exempt status.
"(b) The status of 'charitable gaming' shall be a defense to any prosecution under this chapter."
The statute seeks to decriminalize or to render legal all games of chance, including Bingo and lotteries, when conducted by charitable or religious organizations for appropriate purposes. The bill is unconstitutional insofar as it seeks to legitimize Bingo, lotteries or gift enterprises as these are constitutionally forbidden pursuant to Kentucky Constitution Sec.226. This, however, does not mean that the entire act is to be considered void. For, the act, though void in part, would effectively discriminalize certain charitable games of chance if the following two questions are answered affirmatively. First, are there any "games of chance" which are not lotteries or gift enterprises such that they are not forbidden under Kentucky Constitution Sec. 226? If so, may it be presumed that the legislature would have passed the act to decriminalize such games of chance absent its correlative effort to discriminalize lotteries, bingo or gift enterprises which are constitutionally forbidden?
This office is of the opinion that there are games of chance which are not lotteries. These games may be removed from the operation of criminal sanctions without violating Kentucky Constitution Sec. 226. In Commonwealth v. Kentucky Jockey Club, et al., 238 Ky. 729, 38 S.W.2d 987 (1931) the Court recognized that there is a distinction at law and in fact between gaming and lotteries which calls for a difference in treatment of the two. Id., 994. The Court said of Kentucky Constitution Sec.226 and the forms of gambling it was intended to proscribe:
"At the time section 226 was being considered in the convention that framed the Constitution, an amendment was proposed forbidding every species of gambling. Volume 1. Debates of Constitutional Convention p.1172. The delegate who proposed the amendment was asked whether his proposition embraced the prohibition of betting upon the speed of horses, to which he responded that it was his purpose to forbid all species of gambling and all games of chance in every conceivable form. He argued that all gambling was equally wrong, and that it was unfair to denounce gambling in the form of a lottery and to countenance it in other forms, such as betting upon horse races, and the like. The delegate from Lexington argued that it was not the appropriate place to deal with pooling privileges upon race courses, and other forms of gambling, because lotteries theretofore had been licensed by the Legislature, and the object of the pending section was not to deal with any other species of gambling, but to prohibit the Legislature from granting licenses to lotteries. The amendment was rejected, thus indicating that it was the intention of the Convention not to include in section 226 anything but lotteries of the type familiar at the time." p.993.
Lotteries have been consistently defined as:
". . . a scheme for the distribution of prizes by chance among persons who have paid or agree to pay a valuable consideration for the chance to obtain the prize. " Commonwealth v. Jenkins, 159 Ky. 80, 166 S.W. 794, 795 (1914).
In accord, Commonwealth v. Kentucky Jockey Club, et al., supra; Commonwealth v. Malso-Memphis Theaters, Inc., 293 Ky. 539, 169 S.W.2d 596 (1943); A.B. Long Music Company v. Commonwealth, Ky., 429 S.W.2d 391 (1968). The only schemes which have been deemed lotteries are those wherein the prizes are distributed solely by lot or chance. Contrast, for instance, Commonwealth v. Malco-Memphis Theaters, Inc., supra. with Commonwealth v. Kentucky Jockey Club, et al, supra.
Pursuant to the foregoing, the only games of chance that are constitutionally forbidden are those in which the outcome is determined solely by chance. Those "games of chance" which do involve some element of skill are not constitutionally forbidden, for, where some skill is required to play the game and to win, the outcome of the game is not determined solely by chance, but rather, by a combination of skill and of chance. Both Rook and draw poker involve some degree of skill. The nature of the games are not such that the outcome is determined solely by chance. Therefore, though Rook and draw poker are "games of chance", they are not lotteries and are not constitutionally forbidden.
This brings us to the final question which is: Though the House floor amendment to SB 277 is unconstitutional insofar as it seeks to legalize charitable Bingo and other forms of charitable lotteries (See OAG 80-408), is it constitutional and valid insofar as it seeks to legalize those charitable "games of chance" which are not lotteries? The answer is to be found in KRS 446.090 and the supporting case law. Pursuant to KRS 446.090:
". . . It shall be considered that it is the intent of the general assembly, in enacting any statute, that if any part of the statute be held unconstitutional the remaining parts shall remain in force, unless the statute provides otherwise, or unless the remaining parts are so essentially and inseparately connected with and dependent upon the unconstitutional part that it is apparent that the general assembly would not have enacted the remaining parts without the unconstitutional part, or unless the remaining parts, standing alone, are incomplete and incapable of being executed in accordance with the intent of the general assembly. "
The severability doctrine applies not only to different literary sentences or paragraphs, within an act, but also to various topics within a partially unconstitutional act. The valid portions of the act will be upheld unless the two portions of the act are so intertwined that it cannot be presumed that the legislature would not have passed the valid portion of the act without the invalid portion of the act. Kentucky Municipal League v. Commonwealth, Department of Labor, Ky., 530 S.W.2d 198 (1969); City of Pineville v. Farrow, Ky., 273 S.W.2d 56 (1955); Burns v. Shephard, Ky., 264 S.W.2d 685 (1954). Here, the obvious purpose of the act was to legitimize, or decriminalize, all forms of charitable gambling, particularly Bingo. While great emphasis is placed on the game of Bingo, the act is not written in such a way as to indicate that the legislature would not have enacted a provision legalizing charitable "games of chance" without that portion of the act which sought to decriminalize Bingo or other forms of lotteries or gift enterprises. Therefore, this office is of the opinion that KRS 528.020, as amended, is constitutional and valid insofar as it decriminalizes charitable "games of chance" other than lotteries.
Consequently, if your organization, the organization seeking to sponsor the Rook and draw poker tournament, can qualify for "charitable gaming status" under the act, it may legally conduct the proposed card tournament.
Footnotes
Footnotes
1 See Re Allen, supra; Annotation: Bridge as within Gambling Laws, 97 ALR2d 1420; Stubbs v. Dick, et al., supra.
2 Indoor Recreation Enterprises, Inc. v. Douglas, supra; 137 AL 104, 128-129.