S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Joan Caldwell Johnson, Brice Anderson,
Lorraine Witherspoon
Baker, Faye Blaylock, Sara Edell
Boan, Mike Brewer, Mike Brown,
Ronald Callahan, Sandra Coulter,
Lisa Crum, Andreas Drutis,
Crystal Gayle Edwards, Darryl
Bernard Epps, Buster Elfin Floyd,
Deanna Kay Franz, William
Joseph Harnett, Jr., George
Henley, Loretta Jones, Margaret
Locklear, Tammy Locklear, Linda
McCleod, William McCormick,
Hugh Meise, Patty Miller, Andrew
Nobles, Gary Padgett, Mary
Pinchback, Vardry Pittman, Albert
J. Samra, Mason Skeenes, Danny
Kaye Smith, Jim Stolz, Amber
Strickland, Charles Stubbs, Lonya
Thigpen, James Thompson, Joseph
Chester Walker, Jessie Williams,
Valerie Williams, and on behalf of
themselves and all others similarly
situated, Plaintiffs,
and
Charles Molony Condon, as
Attorney General for the State of
South Carolina, Intervenor,
v.
Collins Entertainment Co., Inc.,
Ace Amusement, LLC, American
Amusement Co., Inc., American
Amusement of Aiken, Inc., B&J
Amusement, Best Amusement Co.,
Broyles & Lutz, Inc., CBA Games,
p.48
Johnson v. Collins Entertainment Co., Inc
Inc., Carousel Amusements, Coley,
Inc., Drew Industries, Fast
Freddies, Great Games, Inc.,
Greenwood Music Co., Inc., H & J
of South Carolina, Inc., Holliday
Amusement Co. of Charleston, Inc.,
Hoyts Music Co., Inc., Huckleberry
Amusement, Inc., Ingram
Investments, J.M. Brown
Amusement Co., Inc., Joytime
Distributors & Amusement, Larry
Wolfe Amusement, MHJ Corp.,
MHS Enterprises, Inc., Martin
Coin Machine, Inc., McDonald
Amusement Co., Midlands Gaming
Corp., Orangeburg Amusement,
Inc., Pedroland, Inc., R.L. Jordan
Oil Co. of North Carolina, Red Dot
Amusements, Rosemary Coin
Machines of Florence, Inc., Scott's
Vending Inc. of Columbia, Sumter
Petroleum Co., Tim's Amusement,
Inc., Video-Matic Amusements,
Inc., H. Hugh Andrews, II, Pamela
A. Andrews, Dwavne I. Bohannon,
J.M. Brown, Don E. Broyles, Grace
E. Coley, Fred Collins, J. Samuel
Cox, Kenneth G. Flowe, Carey
Hardee, Scott G. Hogue, Lowell E.
Holden, Patricia Holliday, Warren
P. Holliday, Henry E. Ingram,
Steven E. Lipscomb, Tim Mahon,
Jimmy Martin, Jr., Cynthia
McDonald, James McDonald, Allan
Schaefer, David R. Simpson, Ron
Simpson, Mickey H. Stacks,
William Darwin Wheeler, Hershel
L. Williamson, and A.J. Wilson,
Jr., in their individual and
corporate capacities as
representatives of all others
p.49
Johnson v. Collins Entertainment Co., Inc
similarly situated, Defendants.
On Certification from the United States District Court for
the District of South Carolina
Joseph F. Anderson, Jr.,
United States District Judge
Opinion No. 24858
Heard April 8, 1998 - Filed November 19, 1998
CERTIFIED QUESTIONS ANSWERED
Wilburn Brewer, Jr, of Nexsen, Pruet, Jacobs & Pollard, of
Columbia; Lawrence Edward Richter, Jr., and Saul
Gliserman, both of Richter Law Firm, of Mt. Pleasant;
Robert R. Bridwell, of Columbia; Richard Mark Gergel, W.
Allen Nickles, III and Carl Lewis Solomon, all of Gergel,
Nickles & Grant, of Columbia; Joseph Preston Strom, Jr.,
and Tom Young, both of Strom & Young, of Columbia; and
Richard K, Walker, of Phoenix, Arizona, for Plaintiffs Joan
Caldwell Johnson, et al.
Attorney General Charles Molony Condon, Chief Deputy
Attorney General John W. McIntosh, Deputy Attorney
General Zeb C. Williams, III, Assistant Deputy Attorney
General Robert Dewayne Cook, Assistant Attorneys General
Reginald I. Lloyd and Christie Newman Barrett, all of Office
of the Attorney General, of Columbia, for Intervenor the
State of South Carolina.
Oscar William Bannister, Jr. and James W. Bannister, both
of Hill, Wyatt & Bannister, of Greenville; Robert E. Blakely,
of Notre Dame, Indiana; and Timothy Clayton Youmans, of
the Collins Companies, of Columbia, for Defendant Collins
Entertainment. Zoe Sanders Nettles, Dwight Franklin
Drake, Robert Bruce Shaw, Benjamin Rush Smith, III and
C. Mitchell Brown, all of Nelson, Mullins, Riley &
p.50
Johnson v. Collins Entertainment Co., Inc.
Scarborough, of Columbia; A. Camden Lewis and Mary
Geiger, both of Lewis, Babcock & Hawkins, of Columbia, for
Defendants American Amusement Company, et al. David E.
Belding, of Columbia, for Defendants Red Dot Amusements,
et al. Timothy Gene Quinn, of Columbia, for Defendant
Carousel Amusement. Richard A. Harpootlian and Robert
G. Rikard, both of Richard A. Harpootlian, P.A., of
Columbia, for Defendant Coley, Inc. David E. Taylor, of
Columbia, for Defendant B&J Amusement. Anne Sumner
Douds, of Kiker & Douds, of Beaufort for Defendant Ingram
Investments. John C. Lindsay, Jr., of Lindsay & Lindsay,
of Bennettsville; and J. Boone Aiken, III, of Coleman, Aiken
& Chase, P.A., of Florence, for Defendant Pedroland, Inc.
Matthew A. Henderson, of Henderson, Brandt & Vieth, of
Spartanburg, for Defendant R. L. Jordan Oil of North
Carolina.
FINNEY, C.J.: This matter is before the Court on certification from the
United States District Court to answer the following questions.
1. What are the factors to be considered and standards to be applied
in determining whether a particular type of activity is a lottery as
prohibited by the South Carolina Constitution?
2. Do the Type II and Type III machines constitute lotteries in
violation of the South Carolina Constitution?1
PROCEDURAL HISTORY
Plaintiffs, purporting to represent themselves and others similarly
situated, initiated this action for damages and injunctive relief in the State
circuit court in June 1997. Defendants own or operate video gaming devices
1 The machines at issue are all video gambling devices that are
physically present and licensed for operation in this state as Class III
machines (subtypes II and III) under S.C. Code Ann. § 12-21-2720(A)(3).
Type II include the games of lotto, bingo and the traditional game of keno.
Type III include games such as poker and black jack as well as one
variety of keno.
p.51
Johnson v. Collins Entertainment Co., Inc
(video poker machines) under authority of licenses issued by the South
Carolina Department of Revenue. Defendants removed the action to Federal
District Court because the asserted claims included a cause of action under
the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S.C. §§
1961 et seq. Subsequently, additional plaintiffs and defendants were added,
and the complaint was amended to allege that video poker games are being
operated in violation of Article XVII, § 7 of the South Carolina Constitution,
which prohibits lotteries.
In December 1997, the plaintiffs filed a motion for a preliminary
injunction seeking to have the court enjoin the defendants from continuing to
operate their video poker games because the games are illegal lotteries under
the State Constitution and are violative of state statutes. The parties agreed that
the constitutional issue could override the statutory issues. The South
Carolina Attorney General has intervened and joined in the motion for
injunctive relief. The District Court allowed the parties to engage in
extensive discovery prior to a hearing on the motion for a preliminary
injunction. Based upon evidence presented at the motion hearing, that Court
made factual findings and issued an Order of Certification to the South
Carolina Supreme Court pursuant to South Carolina Appellate Court Rule
228.
ANALYSIS
Rule 228(b), SCACR,2 contemplates that the South Carolina Supreme
Court will base its answers to the questions certified exclusively upon the
findings of fact by the District Court and, if necessary, the record in this
matter.
In considering Question 1, we look to the applicable provision of the
State Constitution, which reads:
2 A certification order shall set forth the questions of law to be
answered, all findings of fact relevant to the questions certified, and a
statement showing fully the nature of the controversy in which the
questions arose. The Supreme Court may request the original or copies of
all or of any portion of the record before the certifying court to be filed
with the Court, if, in the opinion of the Supreme Court, the record or a
portion thereof may be necessary in deciding to accept or in answering the
questions. Rule 228(b), SCACR.
p.52
Johnson v. Collins Entertainment Co., Inc
No lottery shall ever be allowed or be advertised by newspapers,
or otherwise, or its tickets be sold in this State. The game of
bingo, when conducted by charitable, religious or fraternal
organizations exempt from federal income taxation or when
conducted at recognized annual State and county fairs, shall not
be deemed a lottery prohibited by this section.
S.C. Const. art. XVII, § 7.3
The Constitution does not prohibit games of chance or gambling per se;
with the exception that it is unlawful for public officials to engage in
"gambling or betting on games of chance." S.C. Const. art. XVII, §8. The
framers of our Constitution clearly distinguished between "lottery" and
"gambling or betting on games of chance." Adhering to the constitutional
distinction, the South Carolina statutory scheme includes sections that
specifically deal with lottery, gaming, and betting. See, e.g., S.C. Code Ann.
§§ 16-19-10 to 16-19-30 (lotteries); S.C. Code Ann. § 16-19-40 (prohibiting
games of chance or gambling devices at state and county fairs); and S.C. Code
Ann. § 16-19-60 (coin-operated pinball machines). This distinction between
lottery and other forms of gaming, found within the text of the Constitution
itself, supports the conclusion that its framers used the term "lottery" in a
narrow sense. This conclusion accords with that of the South Dakota
Supreme Court in a similar case:
[B]y separately stating the terms 'game of chance' and 'lottery,'
the framers of the original [constitutional] provision intended the
term 'game of chance' to be broad in scope, including most forms
of gaming, and the term 'lottery' in the narrower sense
3 Prior state constitutions included the following language similar to
the current lottery prohibition provision. "Lotteries, and the sale of lottery
tickets, for any purpose whatever, are prohibited, and the General
Assembly shall prevent the same by penal laws." S.C. Const. art. XIV, § 2
(1868). "No lottery shall ever be allowed, or be advertised by newspaper,
or otherwise, or its tickets be sold in this state; and the General Assembly
shall provide by law at its next session for the enforcement of this
provision." S.C. Const. art. XVII, § 7 (1895). In 1975, the constitutional
provision prohibiting lotteries was amended and remains in effect to this
date.
p.53
Johnson v. Collins Entertainment Co., Inc
contemplating the sale of tokens or tickets to large numbers of
people for the chance to share in the distribution of prizes for the
purpose of raising public revenue.
Poppen v. Walker, 520 N.W.2d 238, 245 (S.D. 1994).
The Constitutional exemption for bingo4 is consistent with a narrow
reading of the word "lottery" since bingo is commonly defined as a game
derived from lotto, which in turn is based on lottery,5 or a form of lottery
often played simultaneously by hundreds or thousands of people.6 However,
the fact that bingo is generally considered a lottery, and meets the common
definition of lottery, does not prove that other forms of gambling are lotteries.
Further, it does not undermine the conclusion that the term lottery is
narrowly construed.
The Court in Rountree v. Ingle, 94 S.C. 231, 77 S.E. 931 (1913)7
distinguished lotteries from gambling by stating: "Our statute makes not only
the promoter of a lottery, but the adventurers in it liable to indictment . . .
The purchaser of a lottery ticket in this State is therefore in a different plight
from one who loses money in gambling . . . who may recover the amount paid
out."
The Court in Darlington Theatres characterized a lottery as a form of
gambling which provided for the distribution of prizes by lot or chance.
Darlington Theatres Inc. v. Coker, 190 S.C. 282, 2 S.E.2d 782 (1939). While
every lottery is a gaming device, not every gaming device is a lottery within
the generally recognized meaning of the word- Accordingly, not all forms of
4 The game of bingo, when conducted by charitable, religious or
fraternal organizations exempt from federal income taxation or when
conducted at recognized annual State and county fairs, shall not be
deemed a lottery prohibited by this section. S.C. Const. art. XVII, § 7.
5 Encarta 97 Encyclopedia (Microsoft deluxe ed. 1996)
6 2 The New Encyclopedia Britannica 218 (15th ed. 1997).
7 The Court decided the question of plaintiff's right to ownership of a
prize claimed by the defendant who recovered the winning lottery ticket
after it had been discarded by the plaintiff. Rountree v. Ingle, supra.
p.54
Johnson v. Collins Entertainment Co., Inc
gambling are violative of our constitution. In 1818, this Court narrowly
construed the term "lottery" as "a term of art" noting that "otherwise it may
mean any thing, as in common parlance it is applied to one half of the
ordinary occurrences or accidents of life." State v Pinchback, 9 S.C.L. 128 (2
Mill) (1818) The Pinchback Court emphasized the necessity of restricting
application of the term lottery to only one class of adventures or hazards. In
doing so, the Court stated that an activity "may be an adventure or hazard
without a lottery; every throw of the die, even for an ordinary wager, is an
adventure or hazard and I am sure it never yet entered the mind of any man
that it constituted a lottery." State v. Pinchbeck, supra.
Likewise, the Court in Darlington Theatres found it apparent that "the
constitutional and legislative prohibition is directed at a special type of vice
in the fields of advertising and gift enterprises -- the type that has come to
be denominated both in the law and in common parlance by the word lottery."
Darlington Theatres, 190 S.C. at 290, 2 S.E.2d at 786. The Court held the
statutes enforcing the constitutional prohibition against lotteries were
"undoubtedly directed at a particular type of gaming or gambling which has
become commonly known as a lottery, and not the prohibition of games of
chance of all kinds." Id.
The Darlington Theatres decision addresses the definition of lottery in
some detail. The word lottery has no technical, legal meaning, but must be
construed in the popular sense. Darlington Theatres, 190 S.C. at 292, 2
S.E.2d at 786. Lottery is "a species of gaming, which may be defined as a
scheme for the distribution of prizes or things of value by lot or chance among
persons who have paid, or agreed to pay, a valuable consideration for the
chance to obtain a prize." Darlington Theatres, supra. The definition of
lottery involves a "scheme for raising money by selling chances to share in a
distribution of prizes; more specifically, a scheme for the distribution of prizes
by chance among persons purchasing tickets, the correspondingly numbered
slips, or lots, representing prizes or blanks, being drawn from a wheel on a
day previously announced in connection with the scheme of intended prizes."
190 S.C. at 292-93, 2 S.E.2d at 787.8
8 The dissent relies on the three element test of prize, consideration,
and chance derived from our decision in Darlington Theatres. This test
was used in Darlington Theatres to determine whether a drawing of
signature cards qualified as an illegal lottery. The general character of
the form of gaming in that case, a drawing with "tickets." was not in
p.55
Johnson v. Collins Entertainment Co., Inc
Historically, in the early 1800's, a lottery was typically a government-
sponsored means of raising revenue by selling tickets for prizes awarded by
lot. See Ronald J. Rychlak, Lotteries, Revenues and Social Costs: A
Historical Examination of State-Sponsored Gambling, 34 B.C.L.Rev. 11 (1992).
A "lottery" in its narrowest sense is conurionly defined as "a gambling game
. . . in which a large number of tickets are sold and a drawing is held for
certain prizes."9 Since its original ratification in 1868 the constitutional
provision has specified "tickets" as part of the prohibited lottery activity. See
1868 S.C. Const. art. XIV, § 2. Use of the word "tickets" indicates the
framers' narrow conception of a lottery as commonly understood, i.e., gambling
involves "tickets" and a drawing by lot.
CONCLUSION
We emphasize that the first question before this Court pertains to
whether a particular activity is a lottery prohibited by the state constitution.
The parties focus on the broader issue of chance. However, as the district
judge noted in the Order of Certification, it is unnecessary to define the
meaning of the term chance if this Court finds video gaming devices are not
lotteries. We find lottery is a term of art and video gaming devices do not
come within the plain and ordinary meaning of "lottery" because they do not
involve a drawing and "tickets" or other indicium of entitlement to a prize.10
We have made this finding based on the longstanding definitions and
distinctions enunciated in Darlington Theatres, Rountree, and Pinchback.
This Court is constrained to give the words of our Constitution their plain and
ordinary meaning. See Davis v. County of Greenville, 313 S.C. 459, 443
S.E.2d 383 (1994)(language of constitution given its plain and ordinary
meaning).
question. The issue there was simply whether a lack of consideration
removed the scheme from the definition of a prohibited lottery.
9 Random House Dictionary of the English Language Second Edition
Unabridged (1987).
10 Electronic ticketing would not necessarily preclude finding a
lottery where electronic registration is the functional equivalent of a
lottery ticket, i.e., evidence of one's entitlement to a prize over claims by
competing ticket-holders.
p.56
Johnson v. Collins Entertainment Co., Inc
Question 2 asks us to apply the legal definition of lottery to preliminary
findings of fact so that the conclusions of this Court may be considered by the
District Court Judge in determining whether to issue a preliminary injunction.
As stated in the Order of Certification, no finding of this Court will be binding
for entry of any permanent injunction or for the award of damages by the
District Court. We answer the second question with the caveat that we are
giving a response only to an interlocutory question of fact. Hence, the answer
of this Court to Question 2 is that Type II and III machines do not constitute
lotteries in violation of the South Carolina Constitution.
Deliberations on this matter were conducted within an atmosphere
charged with the knowledge of the potentially grave and far-reaching
consequences of our decision, regardless of the manner in which we responded
to the questions certified. We are bound by the parameters set out in the
State Constitution, statutes, and common law which direct our decision-
making process. We are persuaded, and legal authority directs, that the
alleged deleterious effect of an activity upon society is not a proper basis upon
which the Courts may declare unlawful any such activity. If the results of
our conclusions are "inimicable to public welfare, then it would be a matter
for legislative action, and not one for the Courts." Darlington Theatres, supra,
at 789. The judiciary does not play a role in determining whether video poker
machines should be allowed or prohibited in our State. For this reason we
must not abuse the language of our constitution to force a solution to an issue
that rightfully must be resolved by our General Assembly.
CERTIFIED QUESTIONS ANSWERED.
MOORE, A.J., and Acting Associate Justice Charles W.
Whetstone, Jr., concur. TOLL, A.J., dissenting and concurring
in separate opinion. BURNETT, A.J., dissenting in separate
opinion.
p.57
Burnett, A.J. (dissenting): In my opinion, the Type II and
Type III video gaming machines described in the district court's
certification order constitute lotteries within the meaning of the South
Carolina Constitution. Accordingly, I respectfully dissent. In offering my
dissent, I recognize "[t]his Court must construe the constitution and laws
of this State without concern for political or popular opinion." Martin v.
Condon, 324 S.C. 183, 189, 478 S.E.2d 272, 275 (1996).
QUESTIONS OF LAW
Pursuant to Rule 228, SCACR, the South Carolina Supreme
Court agreed to answer the following two questions of law for the United
States District Court:
I What are the factors to be considered and standards to be
applied in determining whether a particular type activity is a
lottery as prohibited by the South Carolina Constitution?
II Do the Type II and Type III machines described [in the
certification order] constitute lotteries in violation of the South
Carolina Constitution?
DISCUSSION
I.
A. Definition of Lottery
Obtaining its definition from the Random House Dictionary,
the majority holds a lottery is "a gambling game ... in which a large
number of tickets are sold and a drawing is held for certain prizes."1d This
definition equates a lottery with a raffle and ignores the South Carolina
Constitution and this Court's long-standing legal precedent.
With the adoption of the State Constitution in 1868, lotteries
were constitutionally prohibited for the first time in South Carolina. S.C.
Const. art. XIV, § 2 (1868)("Lotteries, and the sale of lottery tickets, for
any purpose whatever, are prohibited, and the General Assembly shall
1d Random House Dictionary of the English Language 1137 (2nd. ed.
1987).
Johnson et al. v. Collins Entertainment Company, Inc., et al.
prevent the same by penal laws."). Similarly, the 1895 Constitution
prohibited lotteries. S.C. Const. art. XVII § 7 ("No lottery shall ever be
allowed, or be advertised by newspaper or otherwise, or its tickets sold in
this state; and the General Assembly shall provide by law at its next
session for the enforcement of this provision.").
In 1974, the citizens of South Carolina voted to amend the
anti-lottery provision of the Constitution. This amendment was ratified by
the General Assembly in 1975. The current anti-lottery provision of the
South Carolina Constitution states as follows:
No lottery shall ever be allowed or be advertised by
newspapers, or otherwise. or its tickets be sold in this State.
The game of bingo, when conducted by charitable, religious or
fraternal organizations exempt from federal income taxation or
when conducted at recognized State and county fairs, shall not
be deemed a lottery prohibited by this section.
S.C. Const. art. XVII, § 7 (emphasis added).
The underscored language of this provision, which has
remained virtually unchanged since 1868, is unambiguous. It prohibits all
lotteries. If the framers of the Constitution had intended to only prohibit
ticket lotteries, as asserted by the majority, the constitutional prohibition
would have expressly limited the prohibition to ticket lotteries. To the
contrary, the South Carolina Constitution has never limited a lottery to a
scheme which issues tickets or "other indicium of entitlement to a prize,"
as asserted by the majority today.
In fact, with the passage of the constitutional amendment in
1974, the citizens of this State specifically recognized that the game of
bingo is a lottery prohibited by article XVII, § 72d By adopting the
amendment, the citizens of South Carolina legalized the playing of bingo
in certain limited instances. Under the majority's definition, however, the
2d Army Navy Bingo, Garrison No. 2196 v. Plowden, 281 S.C. 226, 314
S.E.2d 339 (1984)(bingo is a lottery); Bingo Bank. Inc. v. Strom, 268 S.C.
498, 501, 234 S.E.2d 881, 883 (1977)("'[T]he game of bingo' under the 1975
amendment refers to the game previously played illegally by charitable
organizations throughout the State.").
p.59
Johnson et al. v. Collins Entertainment Company, Inc., et al.
playing of bingo would be legal in all circumstances since the game does
not involve the issuance of tickets. See Knight v. State ex rel. Moore, 574
So.2d 662, 669 (Miss. 1990)('[A]ny attempt to equate a bingo card with a
lottery ticket would be superficial at best and unpersuasive at worst.").
The majority's definition is contrary to the citizens' understanding of the
constitutional provision.
Further, the constitutional prohibition against the sale of
lottery tickets does not limit and/or characterize lotteries as a form of
gambling in which tickets are sold. Instead, it merely forbids the sale of
lottery tickets, in addition to the operation of lotteries and the
advertisement of lotteries. Similarly, in many jurisdictions, the term
"lottery" is not limited to "ticket lotteries," even though the constitutions in
those jurisdictions, like the Constitution in this State, refer to tickets. Ill.
Const. art. IV, § 27 ("[T]he general assembly shall have no power to
authorize lotteries or gift enterprises for any purpose, and shall pass laws
to prohibit the sale of lottery or gift enterprise tickets in this state."); Kan.
Const. art. XV, § 3 ("Lotteries and the sale of lottery tickets are forever
prohibited."); La. Const., art. XIX, § 8 ("Lotteries and the sale of lottery
tickets are prohibited in this State."); Ohio Const. art. XV, § 6 ("Lotteries,
and the sale of lottery tickets, for any purpose whatever, shall forever be
prohibited in this State, except that the General Assembly may authorize
an agency of the state to conduct lotteries . . . ."); Oregon Const. art. XV, §
17 ("Lotteries, and the sale of lottery tickets, for any purpose whatever,
are prohibited, and the legislative assembly shall prevent the same by
penal laws."); Tenn. Const. art. XL § 5 ("The Legislature shah have no
power to authorize lotteries for any purpose and shall pass laws to prevent
the sale of lottery tickets in this State."); W.Va. Const. art. VI, § 36 ("The
legislature shall have no power to authorize lotteries or gift enterprises for
any purpose, and shah pass laws to prohibit the sale of lottery or gift
enterprise tickets in this State; . . . .").
Finally, the majority's definition of "lottery" ignores this
Court's holding in Darlington Theatres v. Coker , 190 S.C. 282, 2 S.E.2d
782 (1939), where, after considering various definitions,3d the Court
3d The majority asserts the issue before the Court in Darlington
Theatres was not the definition of lottery but whether the element of
consideration existed in a particular scheme. To the contrary, the
definition of lottery was the precise issue before the Court.
p.60
Johnson et al. v. Collins Entertainment Company, Inc., et al.
ultimately concluded:
to constitute a lottery or a scheme in the nature of a lottery, it
is essential that three elements be present, to wit: (1) The
giving of a prize, (2) by a method involving chance, (3) for a
consideration paid by the contestant or participant.
Id. S.C. at 291, S.E.2d at 786. The majority of other jurisdictions have
adopted the same three element test in defining the term "lottery" in their
own constitutional provisions prohibiting lotteries.4d
4d See Opinion of the Justices, 692 So.2d 107, 110 (Ala. 1997)("A
'lottery,' as we have defined that term, contains the following three
elements: (1) [a] prize, (2) awarded by chance, (3) for a consideration."
(internal citations omitted)); see also Youngblood v. Bailey, 459 So.2d 855
(Ala. 1984)(recognizing three element test in interpreting constitutional
lottery provision); In re Interrogatories of Governor Regarding Sweepstakes
Races Act, 585 P.2d 595, 598 (Colo. 1978)(en banc)(in interpreting constitutional
provision, Court declared, "Our cases have established that a
lottery is present when consideration is paid for the opportunity to win a
prize awarded by chance."); National Football League v. Governor of State
of Delaware, 435 F. Supp. 1372, 1383 (D. Del. 1977)(in interpreting
constitutional provision, Court stated, "It is unquestioned that there are
three elements necessary to a lottery: prize, consideration, and chance.");
see also Affiliated Enterprises v. Waller , 5 A.2d 257, 259 (Del. Super.
1939); Iris Amusement Corp.. v. Kelly , 8 N.E.2d 648, 651 (Ill.
1937)(interpreting constitutional and statutory provisions, the court found
"a lottery consists of three essential parts or elements -- i.e. (1) a chance,
(2) for a prize, (3) for a price."); State ex rel. Stephan v. Finney , 867 P.2d
1034, 1043 (Kan. 1994)("Clearly, the term lottery, as used in art. 15, § 3 of
the Kansas Constitution, has been defined by this court as any game,
scheme, gift, enterprise, or similar contrivance wherein persons agree to
give valuable consideration for the chance to win a prize or prizes."); Otto
v. Kosofsky, 476 S.W.2d 626, 629 (Ky. 1971), cert. denied. 409 U.S. 912, 93
S.Ct. 227, 34 L.Ed.2d 173 (1972)(in interpreting constitutional provision,
court found "[al lottery is a scheme for the distribution of prizes or things
of value purely by lot or chance among persons who have paid or agreed
to pay a consideration for the chance to share in the distribution.");
Gandolfo v. Louisiana State Racing Com'n, 78 So.2d 504, 509 (La. 1954)(in
interpreting constitutional provision, court stated, "Lottery has been
p.61
Johnson et al. v. Collins Entertainment Company, Inc., et al.
defined as a scheme for the distribution of prizes by lot or chance."); State
ex rel. Home Planners Depository v. Hughes, 253 S.W. 229, 230 (Mo.
1923)(en banc)(In determining whether a certain scheme was a lottery
"within the meaning of section 10 of article 14 of the Constitution, which
forbids the authorization of lotteries or gift enterprises for any purpose,"
the court stated "'lottery' . . . includes every device whereby anything of
value is, for a consideration, allotted by chance.... Consideration, chance,
prize -- these are the elements."); State ex rel. Gabalac v. New Universal
Congregation of Living Souls, 379 N.E.2d 242, 244 (Ohio Ct. App. 1977)(In
interpreting constitutional provision, court rejected the argument that
"lottery" includes all gambling, but nevertheless declared, "A lottery is a
scheme whereby a monetary consideration is paid and the winner of the
prize is determined by lot or chance."); Hendrix v. McKee, 575 P.2d 134,
139 (Or. 1978)(en banc)(in interpreting constitutional provision, Court
reaffirmed the definition of a lottery as "any scheme whereby one, on
paying money or other valuable thing to another, becomes entitled to
receive from him such a return in value, or nothing, as some formula of
chance may determine. . . ." (quoting State v. Schwemler, 60 P.2d 938
(1936)); see also State v. Coats 74 P.2d 1102, 1106 (Oreg. 1938)('Three
things are necessary to constitute a lottery, viz., prize, chance, and
consideration."); Roberts v. Communications Inv. Club of Woonsocket , 431
A.2d 1206, 1211 (R.I. 1981)("It is well settled that a 'lottery' proscribed in
either a state constitution or statute is defined as a scheme or a plan
having three essential elements: consideration, chance, and prize.");
Secretary of State v. St. Augustine Church/St. Augustine School, 766
S.W.2d 499, 501 (Tenn. 1989)(in affirming recognition of the three element
test by quoting Tennessee precedent -- that "[b]y the great weight of
authority, in order that a transaction may be a lottery, three elements
must be present consideration, prize and chance" -- court held that bingo
dearly constituted a lottery under the Tennessee Constitution); Albertson's
Inc. v. Hansen, 600 P.2d 982, 985 (Utah 1979)(In interpreting
constitutional and statutory provisions restricting lotteries, Court declared,
"to be a lottery, this scheme must involve 'property' (or 'prize'), a
distribution by 'chance,' and the payment of 'any valuable consideration for
the chance."'); State ex el. Evans v. Brotherhood of Friends, 247 P.2d 787,
796 (Wash. 1952)(en banc)(in interpreting constitutional provision, theP>
court declared, "The overwhelming weight of authority is to the effect that
slot machines as here involved and of the usual type and variety are
lotteries."); State v. Hudson, 37 S.E.2d 553, 558 (W.Va. 1946)("The
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Johnson et al. v. Collins Entertainment Company, Inc., et al.
I do agree with the majority's assertion that a lottery is a form
of gambling. However, it does not necessarily follow that "lottery" must be
defined narrowly as a scheme in which a large number of tickets are sold
and a drawing is held for a certain prize.5d In fact, this definition leaves
unanswered questions. How many tickets must be sold for a scheme to
constitute a lottery? If one person buys one thousand tickets and another
buys one ticket, is the game a lottery? If the prize is altered by the
number of players, i.e., the prize is determined by the number of
participants, is the prize "certain?"6d
I adhere to the three element test established in Darlington
Theatres, supra, to define the term "lottery." While the framers of the
South Carolina Constitution could not contemplate computer simulated
games when drafting the anti-lottery provision of the Constitution, they
nonetheless intended to prohibit lotteries, i.e., all schemes involving
consideration, chance, and prize. The Constitution is a flexible document
applicable to changing times and conditions. Knight v. Hollings, 242
S.C. 1, 4, 129 S.E.2d 746, 747 (1963)("[A] constitutional provision ... is not to
be viewed solely in the light of conditions existing at the time of its
adoption, being intended not to obstruct the progress of the state but
essential elements of a lottery are consideration, prize and chance, and,
where they are present and chance predominates, even though skill or
judgment may enter to some extent in the operation of a particular
scheme or device, the scheme or device is a lottery."); Coca-Cola Bottling
Co. of Wisconsin v. La Follette 316 N.W.2d 129, 132 (Wis. Ct. App.
1982)(In considering the state's constitutional and statutory provisions
restricting lotteries, the Court stated, "At common law, there are three
elements of a lottery -- a prize, chance, and a consideration.").
5d The majority relies on Rountree v. Ingle, 94 S.C. 231, 77 S.E. 931
(1913), and State v. Pinchback, 9 S.C.L. (2 Mill) 128 (1818), as holding the
definition of "lottery" must be narrowly construed. Rountree did not
discuss the definition of lottery. Pinchback involved the application of a
penal statute and the decision was issued before any constitutional
provision prohibiting lotteries.
6d The majority provides no legal authority, and I have located none,
which requires a "certain prize" as an element of a lottery.
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Johnson et al. v. Collins Entertainment Company, Inc., et al.
rather to meet and be applied to new conditions and circumstances as they
may arise . . . .") Accordingly, any scheme which meets the definition of
lottery is prohibited by the Constitution. See 38 Am.Jur.2d, Gambling § 5
(1968)("It has been said that the word 'lottery' is generic, and that it
includes every device whereby anything of value is, for a consideration,
allotted by chance.").
B. Chance
Since I adhere to the three element test established in
Darlington Theatres, it is necessary that I define the role of chance in
deciding whether a particular scheme is a lottery.7d
1. The Parties' Arguments
In determining the role of chance, the defendants maintain
the "British Rule" or "Pure chance doctrine" is the established law in South
Carolina. Under this doctrine, only a scheme in which the result is
determined solely by chance is a lottery; if skill plays any part, the scheme
is not a lottery. Braddock v. Family Finance Corporation, 506 P.2d 824
(Idaho 1973)(a scheme is considered a lottery when a participant's
judgment plays no part in the selection and award of the prize).
Defendants base their argument on Powell v. Red Carpet Lounge 280 S.C.
142, 311 S.E.2d 719 (1984), and the reception statute.8d
The plaintiffs contend the Court should adopt the "American
Rule" or "dominant factor doctrine" in determining whether a game is one
of skill or chance. Under the dominant factor doctrine, "a scheme
constitutes a lottery where chance dominates the distribution of prizes,
even though such a distribution is affected to some degree by the exercise
of skill or judgment." Morrow v. State, 511 P.2d 127, 129 (Alaska 1973).
7d Because the parties appear to agree on the definitions of
consideration and prize, I will not define those terms.
8d S.C. Code Ann. § 14-1-50 (1977)("All, and every part, of the common
law of England, where it is not altered by the Code or inconsistent with
the Constitution or law of this State, is hereby continued in full force and
effect in the same manner as before the adoption of this section.").
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Johnson et al. v. Collins Entertainment Company, Inc., et al.
2. Analysis
In my opinion, the British rule or pure chance doctrine is not
the established law in South Carolina. Red Carpet id., is not controlling.
In Red Carpet, the sheriff seized the defendant's coin-operated machines to
determine the legality of their existence and possession. The Court
specified there was no allegation of illegal use of the machines. The Court
determined the possession of the machines did not violate the constitution
and, further, as there was no indication the machines were used for illegal
purposes, the lottery issue was not involved. Red Carpet did not in any
manner describe the role of chance in determining whether a scheme is a
lottery.
Moreover, in accordance with the reception statute, the
common law of England is ordinarily presumed to govern if there is no
South Carolina authority to the contrary. State ex rel. McLeod v. Sloan
Construction Co., Inc., 284 S.C. 491, 328 S.E.2d 84 (Ct.App. 1985). This
statute does not, however, preclude the Court from interpreting the
Constitution and declaring the law of South Carolina. This is the first
occasion in which the Court has considered the role of chance within the
meaning of the term "lottery."
I reject the pure chance doctrine. Under the doctrine, any
skill, however minimal, is sufficient to remove a scheme from the
definition of lottery. Under the pure chance doctrine many obviously
chance-based games, such as guessing contests, would not be lotteries. For
instance, a mathematician might more accurately predict the number of
marbles in a glass bowl than a non-mathematician. However, certain
unknown elements, such as the thickness of the glass and number of
marbles hidden from view, would make an exact calculation impossible.
Under the pure chance doctrine, some skill would be exercised in
determining the number of marbles and the contest would not be a lottery.
See State ex Inf. McKittrick v. Globe-Democrat Pub. Co., 110 S.W.2d 705
(Mo. 1937)(en banc).
Instead, I would hold, where the dominant factor in a
participant's success or failure in a particular scheme is beyond his
control, the scheme is a lottery, even though the participant exercises
some degree of skill or judgment. If a participant's skill does not govern
the result of the game, the scheme contains the requisite chance necessary
to constitute a lottery. On the other hand, if through the exercise of skill
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Johnson et al. v. Collins Entertainment Company, Inc., et al.
or judgment a participant can determine the outcome, the scheme is not a
lottery.9d My opinion is supported by the majority of jurisdictions which
have considered this question.10d Only three jurisdictions adopt the pure
9d I note the language in Darlington Theatres, supra, "by a method
involving chance," suggests even the minimal involvement of chance in a
scheme is sufficient to constitute a lottery.
10d United States v. Marder , 48 F.3d 564, 569 (1st Cir.), cert. denied,
514 U.S. 1056, 115 S.Ct. 1441, 131 L.Ed.2d 320 (1995)(Under
Massachusetts law, "[C]hance must predominate over skill in the results of
the game, or the element of chance must be present in such a manner as
to thwart the exercise of skill or judgment in a game."); Johnson v.
Phinney , 218 F.2d 303, 306 (5th Cit. 1955)("With respect to the element of
chance, the authorities are in general agreement that if such element is
present and predominates in the determination of a winner, the fact that
players may exercise varying degrees of skill is immaterial; and the game
or device is a lottery."); National Football League v. Governor , supra at
1385 ("I conclude that the legislative interpretation of the term lottery
together with the weight of authority in other jurisdictions would persuade
the Delaware Supreme Court that 'lottery' should be interpreted to
encompass not only games of pure chance but also games in which chance
is the dominant determining factor."); Morrow v. State, supra at 129 ("We
agree that the sounder approach is to determine the character of the
scheme under the dominant factor rule."); State ex Inf. McKittrick v.
Globe-Democrat Pub. Co., supra, at 713 ("[A] contest may be a lottery even
though skill, judgment, or research enter thereinto in some degree, if
chance in a larger degree determine[s] the result."); People v. Settles, 78
P.2d 274, 277 (Cal. App. Dep't. Super. Co.1938)("The test of the character
of a game or scheme as one of chance or skill is which of these factors is
dominant in determining the result."); Finster v. Keller , 96 Cal. Rptr. 241
(Cal. Ct. App. 1971); In re Interrogatories, supra at 598 ("Article XVIII,
Section 2 [of the Colorado Constitution] is violated if chance is the
controlling factor in the award."); Tinder v. Music Operating, Inc., 142
N.E.2d 610, 614 (Ind. 1957)("In a lottery the winning of a prize is
dependent primarily, if not solely, upon chance. In none of said cases was
the prize dependent upon the skill or manipulation of the player. This is
a significant factor not contemplated in a lottery."); Commonwealth v.
Lake 57 N.E.2d 923, 925 (Mass. 1944)("[A] game is now considered a
lottery if the element of chance predominates and not a lottery if the
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Johnson et al. v. Collins Entertainment Company,
chance doctrine.11d
element of skill predominates."); State v. Hahn, 72 P.2d 459, 461 (Mont.
1937), overruled on other grds. State v. Bosch, 242 P.2d 477 (Mont.
1952)("The test of the character of the game is not whether it contains an
element of chance or an element of skill, but which is the dominating
element that determines the result of the game."); State v. Steever , 246
A.2d 743 (N.J. Super. Ct. App. Div. 1968)(football pool was lottery because
it involved substantial element of chance); Hoff v. Daily Graphic, Inc., 230
N.Y.S. 360, 363 (N.Y. Sup. Ct. 1928)("The test of the character of the game
is not whether it contains an element of chance or an element of skill, but
which is the dominating element that determines the result of the game.");
State v. Stroupe, 76 S.E.2d 313, 317 (N.C. 1953)("[T]he test of the
character of [the game] ... 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 . . . ."); Stevens v.
Cincinnati Times-Star Co., 73 N.E. 1058, 1061 (Ohio 1905)("[I]f the
dominating, determining element is one of chance, that element gives
character to the whole scheme."); Commonwealth v. Laniewski, 98 A.2d
215, 217 (Pa. Super. Ct. 1953)("It is sufficient that chance be the dominant
factor."); Roberts v. Communications Investment Club of Woonsocket,
supra. at 1211 ("In deciding whether the element of chance is present, we
adopt, as have most jurisdictions which have faced this issue, the
'dominant factor' doctrine, under which a scheme constitutes a lottery
when an element of chance dominates the distribution of prizes, even
though such a distribution is affected to some degree by the exercise of
skill or judgment."); D'Orio v. Startup Candy Co., 266 P. 1037, 1038 (Utah
1928)(chance must be dominating element); Seattle Times Co. v. Tielsch,
495 P.2d 1366 (Wash. 1972)(en banc)(dominant factor test); State v.
Hudson, supra at 558 ("[A] lottery exists, even though skill, judgment or
research enters to some extent, if chance predominates in the
determination of the result."); see also State v. Wassick, 191 S.E.2d 283
(W.Va. 1972); State v. Dahlk, 330 N.W.2d 611, 617 (Wis. Ct. App.
1983)("Chance rather than skill must therefore be the dominant factor
controlling the award in a lottery. Most jurisdictions apply the 'dominant
factor' test, by which a scheme is a lottery if chance dominates even
though some degree of skill or judgment is present.").
11d See Opinion of the Justices, supra (as long as there is some degree
of skill, that activity differs from a lottery); Braddock v. Family Finance
p.67
Johnson et al. v. Collins Entertainment Company, Inc., et al.
II
Applying the elements of consideration, prize, and chance to
the video gaining machines described in the district court's certification
order, I reach the following conclusions:
A. Consideration
According to the certification order, play on all of the video
gaming machines "requires the payment of money directly into the
machines." Order, p.6. The payment of money in order to play a video
game is consideration.
B. Prize
With regard to all of the video gaming machines, the
certification order finds "[t]he player can receive cash at the conclusion of
play for any accumulated credits, Order, p.6. A cash award is
clearly a prize.
C. Chance
The certification order describes the Type II and Type III video
game devices, in part, as follows:
The machines at issue are microprocessor based devices with
random number generators . . . .
Specific operation of the games on the machines varies
significantly. In each case, however, significant facets of the
game are controlled by the selection of a card. number, or icon
by the random number generator... In each case, . . . . the
random selection is critical to the play of the game because it
determines the numbers, cards, or icons which, in turn,
determine whether the player wins or loses the game. The
random selections occur independent of the control or direction
Corp., supra (any skill or judgment practiced by the participant removes
the enterprise from the category of lottery); State v. Coats, supra (if any
substantial degree of skill or judgment is involved, it is not a lottery).
p.68
Johnson et al. v. Collins Entertainment Company, Inc., et al.
of the player. regardless of the player's skill. knowledge, or
experience.
In most instances, all decisions made by the player that might
affect the outcome of the game are made before the last
random selection. In the remaining instances, the last act may
be the player's decision not to risk an already strong hand by
subjecting it to an additional random act.
In the process of designing the games, the manufacturers use
mathematical models to determine the 'optimum play.'
Optimum play models establish the rate of financial return a
player using the best possible strategy for maximizing winning
potential can expect to receive... The pay tables are adjusted
by the manufacturers so that, over time, oven optimum play
would result in a return of less than 100%. In other words the
machines are designed to return, on average, less than one
dollar for each dollar spent. even with players using the best
possible strategies....
Order, pp.6-8 (emphasis added).
The order specifically describes the Type II games as follows:
The second category of games ("Type II") include the games of
lotto, bingo, and the traditional game of keno. The player
deposits his or her money, the player makes some decision, a
random selection occurs, and the outcome of the game is
determined. Although the player makes some decision in the
process of playing these games, such as by selecting an
arbitrary number, the player's decision does not affect the role
that chance plays in the outcome of the game.
Order, p.9 (emphasis added).
As noted in the certification order, one of the defendants'
expert mathematicians testified Type II games operate purely on chance.
The district judge stated, "[i]t is, therefore, without dispute that Type II
games are pure games of chance." Order, p.12.
Under either the pure chance doctrine or dominant factor
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Johnson et al. v. Collins Entertainment Company, Inc. et al
doctrine, chance governs the outcome of a Type II video game. I would
hold Type II games constitute lotteries in violation of Article XVII, § 7 of
the South Carolina Constitution.
With regard to Type III games, the certification order finds:
The third category of games ("Type III") includes games such as
poker and black jack as well as one variety of keno. In these games,
the player makes a variety of decisions at one or more points during
play of the game. The decisions the player makes may affect the
continued play and the ultimate results of the game in a variety of
ways.
First, the player may make decisions as to how to continue to play.
For instance, in a poker game the player will decide which cards to
keep and which to discard. While this decision could be based on
sheer caprice, it would normally be based on the player's view of the
probability of receiving certain replacement cards that would
constitute a winning hand. This decision may also be influenced by
the player's analysis of the relative value of the given hands that
could be received. In other words, a player faced with two or more
possible "good" options may be willing to try for the less likely hand
if the payout is high enough to justify the increased risk...
In short, the Type III games are the most complex and diverse
.... Still, some features are common to all machines .... In
particular, each game begins with the random selection of
cards, numbers, or other icons. The player sees these and is
given an opportunity to make one or more decisions. A second
random selection is then made by the machine. The ultimate
outcome is, therefore, influenced by, but is not entirely
determined by the player's decisions. However. regardless of
skill, knowledge, or experience, a player cannot alter the
probabilities inherent in the play of any Type I, Type II, or
Type III video machine games. Neither can the player modify
the function of the random number generator, or the random
delivery of cards, numbers, or icons.
Further, in any particular play, the odds of obtaining a particular
card or combination of cards after discard are weighted against the
player.
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Johnson et al. v. Collins Entertainment Company, Inc. et al
Order, pp.9-11 (emphasis added).
Whether chance predominates over skill is not easily answered
with regard to the Type III games because the parties define "skill"
differently. The plaintiffs maintain since play is completed by a random
act outside the control of a player or by a player's decision to stand on the
result of a prior random act, and the odds are stacked against a player,
chance predominates. In effect, the plaintiffs define "skill" as the ability to
affect the odds of obtaining a given card and, ultimately, the outcome of
the game.
On the other hand, the defendants define "skill" as a player's
ability to maximize the numbers of credits or dollars won through
knowledge of probabilities and consideration of the potential payoff. One
of the defendants' experts presented a mathematical model which
compared the results of a player using optimum game strategy with a
player acting entirely randomly. Since the most skilled player would win
back 96.5% of his credits and the most unskilled player would win back
31% of his credits, the expert concluded skill predominated over chance.
Another of the defendants' experts testified, with regard to
video blackjack, differing play strategies could produce differences in
excess of 50% in returns expected from the best and worst players. In the
modified keno game, "Double Up Keno," there would be even greater
differences in the expected returns of the best and worst players. The
district court noted "[t]his testimony was based on the same form of
mathematical model discussed [by the defendants' previous expert]."
Order, p.19.
As noted in the defendants' expert's mathematical model, the
probability of obtaining a particular hand does not increase, regardless of
a player's level of skill. Although a skilled player (unlike an unskilled
player) can improve his chances of winning and maximize those winnings,
his ability to affect the outcome of a game, i.e., actually obtain the
winning card, is determined by the random number generator. Similarly,
if two players both exercise optimal strategy, chance would determine
which player, if either, would obtain a given card. A player's skill, no
matter how good or poor, does not control the random "deal" of the cards.
In my opinion, skill should be defined in terms of the ability to
obtain the desired outcome - a certain card - rather than the ability of one
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Johnson et al. v. Collins Entertainment Company, Inc., et al.
player to play more judiciously than another.12d As noted by the
certification order, a video poker player is unable to control the random
selection of cards, in spite of his skill, knowledge, or experience. Since the
player cannot improve the likelihood he will obtain a certain card, I
conclude chance dominates over skill in the operation of the Type III video
game machines. My conclusion is supported by authority from numerous
other jurisdictions13d Accordingly, the Type III video machines are lotteries
12d See State ex Inf. McKittrick v. Globe-Democrat Pub. Co., supra at
717 ("The rule that chance must be the dominant factor is to be taken in a
qualitative or causative sense rather than in a quantitative sense.").
13d United States v. Marder, supra (evidence supported finding chance
predominated over skill in playing video poker); Games Management, Inc.
v. Owens, 662 P.2d 260, 264 (Kan. 1983)("[t]he small amount of skill
required to play [video games of 'Double-Up' (poker) and 'Twenty-One'
(version of blackjack)] is clearly overshadowed by pure chance" where the
winner is determined by random appearance of cards over which the
player has no control); Garano v. State , 524 N.E.2d 496, 500 (Ohio
1988)(In finding video poker machines are games of chance, "[t]he fact that
an element of skill may be involved in a game does not override the fact
that elements of chance exist and, therefore, the game can be classified as
a game of chance."); Commonwealth v. Two Electronic Poker Game
Machines, 465 A.2d 973, 978 (Pa. 1983)(In playing video poker machine,
"the element of chance predominates and the outcome is largely
determined by chance."); United States v. Dobkin, 423 S.E.2d 612, 614
(W.Va. 1992)("[A]lthough there is some element of skill involved, poker or
any electronic simulation thereof, is a game of chance."); Score Family Fun
Center, Inc. v. County of San Diego, 275 Cal.Rptr. 358 (Cal. App. 4 Dist.
1990)("Mini-Boy 7" video game which offers games of draw poker, seven
card stud, blackjack, baccarat, hi-lo, double-up, and craps, is game of
chance); Plato's Cave Corporation v. State Liquor Authority , 496 N.Y.S.2d
436, 438 (N.Y.A.D. 1 Dept. 1985)("Although there is a degree of skill in
playing poker, 'the outcome depends in a material degree upon an element
of chance,' i.e. the draw of the cards." (internal cites omitted)); Collins
Coin Music of North Carolina v. North Carolina Alcoholic Beverage
Control Comn., 451 S.E.2d 306, 308 (N.C. App. 1994)("[A]lthough a
player's knowledge of statistical probabilities can maximize his winnings in
the short term, he cannot determine or influence the result since the cards
are drawn at random.").
p.72
Johnson et al. v. Collins Entertainment Company, Inc. et al.
and, therefore, illegal under Article XVII, § 7 of the South Carolina
Constitution.
CONCLUSION
The majority suggests it is the General Assembly's role to
determine whether video gambling is inimical to the public welfare and, if
so, respond with appropriate legislation. I agree. Nonetheless, this Court
is ultimately responsible for interpreting the South Carolina Constitution.
Evatte v. Cass, 217 S.C. 62, 65, 59 S.E.2d 638, 639 (1950)("[T]he final
responsibility of interpreting the Constitution rests upon this Court."). I
construe Article XVII, §7 of the South Carolina Constitution as
prohibiting all schemes which meet the definition of "lottery," including the
video gaming machines described in the federal district court's certification
order.
p.73
TOAL, A.J. (concurring and dissenting): Because I profoundly disagree
with the analysis and conclusions reached by the majority, I must join my
brother Justice Burnett's opinion in substance. I concur in Justice Burnett's
answer to the first certified question. He has set forth the legal standard
which should be used to define the term lottery as it appears in South
Carolina's Constitution in a manner which is faithful to our Court's
precedents and well within the mainstream of American court decisions. I
also concur with Justice Burnett's answer to the second certified question in
which he applies his definition of lottery to the machines in question and
concludes that Type II and Type III video gaming machines do constitute
lotteries under our constitution.
However, I write separately to express the view that the United States
District Court for the District of South Carolina is free to answer the second
question as Justice Burnett and I do. In order to explain this view, I concur
only in that portion of the majority's opinion which concludes that since the
second certified question asks us to decide a factual question, no such finding
will be binding on the federal district court for purposes of entry of any
permanent injunction or award of damages. Since our opinions regarding the
application of any of the proposed tests are advisory, it is within the federal
district court's prerogative to decide whether Type II and Type III machines
are unconstitutional. My own advice to the federal court is that under any
of the definitions of lottery put forth by this Court today, Type II and Type
III machines are clearly unconstitutional in South Carolina. Each of these
points is discussed below.
A ADVISORY NATURE OF OPINIONS
The federal district court asked this Court to answer two certified
questions. The first question asked us to provide South Carolina's legal
definition of a lottery. The second question asked us to apply that definition
to the preliminary findings of fact in this case, i.e., to decide a factual
question. In answering the second certified question, the majority advises the
federal district court that under their definition of lottery, the video poker
machines at issue here do not constitute lotteries under the South Carolina
Constitution. Justice Burnett and I disagree with them.
As noted by Chief Justice Finney and stated in the Order of
Certification, "no finding of this Court will be binding for entry of any
permanent injunction or for the award of damages by the District Court."
This Court may accept certified questions only to answer questions of law.
Rule 228(a), SCACR. Thus, this Court's determination of whether Type II
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Johnson et al. v. Collins Entertainment Company, Inc. et al.
and Type III are in fact "lotteries" under our Constitution does not bind the
federal district court. This determination is ultimately in the hands of the
federal district court.
B. APPLICATION OF THE MAJORITY TEST
Under Justice Burnett's test, in which I join, Type II and Type III
machines are clearly unconstitutional. The majority, on the other hand,
advises that under its test, Type II and Type III machines are not
unconstitutional lotteries. However, I believe that even under the test
proposed by the majority, the federal district court can conclude that Type II
and Type III machines constitute a lottery under our Constitution.
The majority concludes that the video gaming machines are not
unconstitutional lotteries because they do not involve (1) a drawing and (2)
"tickets" or other indicium of entitlement to a prize.
Although the majority finds that the video gaming machines do not
involve a "drawing," the majority fails to consider that the machines at issue
here function in the same manner as most modem popular lotteries. These
popular lotteries involve a random generation of numbers to determine the
winning combination. The "drawing" does not depend upon the number of
people playing the lottery. As such, single person play would not negate the
fact that a drawing takes place. Similarly, in this case, all of the video
gaming machines are microprocessor based devices with random number
generators. A player wins if the right combination of numbers is generated
by the machine. Thus, a drawing occurs by the machines' random generation
of numbers, irrespective of the number of people playing.
As for the second requirement of "tickets," even the majority recognizes
that the definition of "tickets" should take into account modern technology.
The majority states in footnote 10 of its opinion that '[e]lectronic ticketing
would not necessarily preclude finding a lottery where electronic registration
is the functional equivalent of a lottery ticket . . . ." In the instant case,
although a player does not receive an actual ticket or token prior to playing
the game, his opportunity to win is symbolized by the activation of the
machine upon the insertion of money and the compilation of his credits or
plays displayed during the game. Upon the insertion of money, the machines
reveal the player's monetary credit with that game. The machines keep track
of the player's initial credit and any "free plays" the player wins during his
game. These credits are what the player exchanges with the store owner for
cash. There is no practical difference between a physical ticket evidencing
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Johnson et al. v. Collins Entertainment Company, Inc. et al.
the right to play for a prize and an electronic representation of such a right
in the form of free play credits. Furthermore, the right to receive the cash
prizes from the machine owners is physically represented by the ticket the
player receives when he cashes out a game. That prize amount is limited by
statute.
Finally, although the majority opinion does not discuss the requirement
of chance, it is patently clear Type II and Type III video machines would
satisfy even a pure chance standard. As stated in the Order of Certification,
all of the machines are microprocessor based devices with random number
generators. The random selections occur independent of the control or
direction of the, player, regardless of the player's skill, knowledge, or
experience. (Ord. p. 6-7). The bottom line is that a player cannot alter the
probabilities inherent in the play of Type I, Type II, or Type III video
machine games. (Ord. p. 10).
Thus, in my view, under any of the tests proposed today, Type II and
Type III video game machines are illegal lotteries under the South Carolina
Constitution. Of course, the final application of the law to the facts of this
case rests wholly within the discretion of the federal district court. It may v
ery well be that the federal district court, having asked our advice on the
application of our lottery test to the facts before it, will accept the advice of
the majority. I simply express the view that these opinions give the federal
district court a range of choices.
C. CONCLUSION
Although no solid consensus has been reached in this case, the
members of this Court have attempted with mutual respect and in utter good
faith to reconcile our positions on the South Carolina Constitution's anti-
lottery provision and its application to video gaming machines. As part of t
he judicial branch of government, our role is limited to discerning the
meaning and application of existing law. Naturally, interpretations may vary
among members of any court. My profound disagreement with my brothers
in the majority is matched by my enduring respect for their sincerity and
integrity. Although many appellate courts transform passionate philosophical
disagreement into permanent rupture of the court's collegiality,1e this Court
1e See E. Lazarus, Closed Chambers: The First Eyewitness Account of the
Epic Struggles Inside the Supreme Court, Times Books, Random House, 1999.
In an act of consummate disloyalty to the court he once served, the author,
a former law clerk, describes bitter division within our highest court.
p.76
Johnson et al. v. Collins Entertainment Company, Inc. et al.
will not splinter over any given opinion.2e We have each considered and
circulated many drafts of these opinions. I offer this glimpse into the
deliberations of conference in order to underscore the complexity of this
matter and gravity of our consideration. We are greatly divided on this case,
but one truth about our Constitution in which we are all united is that we
have no role to play in answering the broader policy questions of whether
video gaming machines and other lotteries should be allowed, prohibited, or
regulated in South Carolina. These policy decisions can only be made by the
statutory enactment of the General Assembly, regulatory action of the
executive agencies so empowered, or by further Constitutional mandate of the
people of South Carolina.
2e Eminent contemporary southern historian Dr. Walter Edgar proposes
as his working thesis for South Carolina: A History, University of South
Carolina Press, 1998, that the hallmark of South Carolinians is our impulse
to conduct ourselves so as to achieve "the good order and harmony of the
whole community."
p.77