Request By:
Ms. Catherine C. Staib
General Counsel
Department of Alcoholic Beverage
Control
123 Walnut Street
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; John H. Gray, Assistant Attorney General
Thank you for your letter of February 5, 1981, in which you ask, "May a licensee of the Department of Alcoholic Beverage Control, at the licensed premises, offer, for a set fee to a tour operator, an activity in which games of chance are played with paper money and prizes are auctioned off and paid for with paper money? "
As you know, KRS 243.500(7) states that a license must be revoked or suspended for setting up, conducting, operating or keeping, on the licensed premised any of the following:
1. Any gambling game, device, machine or contrivance, or
2. Any lottery or gift enterprise, or
3. Any handbook or facility for betting or transmitting bets on horse races.
Therefore, if the activities that your question contemplates involve gambling, KRS 243.500(7) requires that the licensee's license be revoked.
KRS Chapter 528, the section of the penal code which regulates gambling, defines gambling as meaning "staking or risking something of value upon the outcome of a contest, game, gaming scheme or gaming device which is based upon an element of chance, in accord with an agreement or understanding that someone will receive something of value in the event of a certain outcome." KRS 528.010(3).
"Something of value" means any money or property, any token, object or article exchangeable for money or property, or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service, entertainment or a privilege of playing at a game or scheme without charge. KRS 528.010((9).
It is the opinion of this office that if nothing but paper money is used in these activities, and that if such paper money is provided at no expense to the participants, then the participan's would not be staking or risking something of value on the outcome of these activities, and hence would not be gambling. If gambling is not involved, then seemingly a licensee could offer the types of activities that you described.
However, if the cost of these activities is passed on to the participants by the tour operators in the form of a hidden increase to the initial overall tour cost, then the participants in these activities would in fact be risking something of value on these games, in that they would have "purchased" this paper money when they paid for their tour. Gambling, therefore, seemingly would be involved in these activities and these activities could only be offered at the risk of revocation or suspension of license.
It is hoped that this has adequately answered your question. If not, please feel free to call upon us.