Request By:
Ms. Norma Skoog
The Kroger Co.
1014 Vine Street
Cincinnati, Ohio 45201
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Suzanne Guss, Assistant Attorney General
This is in response to your recent letter in which you asked this office for an opinion on whether a Ford Motor Co. giveaway of automobiles conducted on Kroger supermarket premises will jeopardize wine and beer licenses held by the Kroger Co. You state that, by arrangement between Kroger and Ford, customers will register for the contest at individual supermarkets and that no minimum purchase is required for registration.
Under KRS 243.500(7) a beer or wine license will be revoked or suspended if the licensee permits or sets up, conducts, or operates on licensed premises any lottery or gift enterprise. "Lottery" and "gift enterprise" are defined as a gambling scheme in which the participants pay or agree to pay consideration for chances to win something of value; the winning chances are determined by a drawing or some other method based upon chance. KRS 528.010(5).
The automobile giveaway contest you have described in your letter loes not appear to fail within the definition of a lottery or gift enterprise. In Commonwealth v. Malco-Memphis Theaters, 293 Ky. 531, 169 S.W.2d 596, 598 (1943), the Kentucky Court of Appeals stated:
". . . There can be neither legal nor moral objections to the gratuitous distribution of money or other property whether by direct gift or by selecting the donees by lot or chance. Such plan or system involves no element of gambling and is not a lottery or gift enterprise within the meaning of section 226 of our Constitution. To constitute a lottery there must be a payment of a valuable consideration for the chance to receive the prize. It is only when people are induced to give up consideration in the hope of obtaining greater returns that the law becomes concerned. . . ." (Emphasis added).
So long as the public does not pay valuable consideration for the chance to win an automobile, your "giveaway" contest will not be considered a lottery or gift enterprise. The mere act of entering the business premise to register for the contest or pick up free chances does not constitute valuable consideration. However, should the chance of winning the prize be "part of the inducement" to purchase goods, the contest would be violative of § 226 of the Kentucky Constitution and the beer or wine license subject to revocation or suspension pursuant to KRS 243.500(7). See OAG 81-146,
It is the opinion of this office that the proposed Kroger-Ford "giveaway" contest does not involve consideration and therefore complies with the laws of this Commonwealth.