AGO 97013.

• Court: Nebraska

Nebraska Attorney General Opinions 1997. AGO 97013. DATE: February 13, 1997SUBJECT: Constitutionality Under Neb. Const. art. III, § 24, of LB 522 and LB 534.REQUESTED BY: Senator Stan Schellpeper Nebraska State LegislatureWRITTEN BY: Don Stenberg, Attorney General L. Jay Bartel, Assistant Attorney General You have requested our opinion concerning the constitutionality under Neb. Const. art. III, § 24, of portions of two bills currently before the Legislature (LB 522 and LB 534) proposing to expand the manner in which certain gambling activities may be conducted in Nebraska. LB 522 proposes, in part, to authorize a form of "electronic" pickle card device which would incorporate a video display feature. LB 522, §§ 1 to 7. The bill also would amend the provisions of the Nebraska County and City Lottery Act to eliminate the "paper ticket" requirement currently contained in the Act, as well as the prohibitions against "player activation" and the use of "mechanical", "computer", "electronic" or "video" gaming devices, to permit "electronic" keno. LB 522, §§ 8-13. Section 14 of LB 522 would authorize organizations licensed to conduct live thoroughbred horseracing to apply for a license to conduct a lottery under the County and City Lottery Act. LB 534, which is virtually the same as LB 915, introduced during the last legislative session, would amend the definition of "lottery" under the County and City Lottery Act to include, in addition to the ticket drawing or keno forms presently authorized, a third method of determining winners, broadly stated as being "[b]y some other method based on an element of chance;. . . ." LB 534, § 1. The bill also proposes to eliminate the prohibition in Neb. Rev. Stat. § 9-607(2)(a) (Cum. Supp. 1996) against lotteries including "any gambling scheme which uses any mechanical gaming device, computer gaming device, electronic device, or video gaming device. . .," and to remove such devices from the definition of "gambling device" under Neb. Rev. Stat. § 28-1101(5) (1995). You request our advice concerning whether these provisions of LBs 522 and 534 are within the Legislature's power under Neb. Const. art. III, § 24, to authorize "lotteries" for charitable or community betterment purposes, or whether the proposed legislation impermissibly proposes to authorize "games of chance" prohibited under the Nebraska Constitution. For the reasons outlined below, we reiterate our prior conclusion that, in order to give effect to the separate recognition of the prohibition against "games of chance" under the Nebraska Constitution, and the exception allowing "lotteries" for charitable or community betterment purposes, the term "lotteries" must be interpreted in its narrow sense, meaning schemes in which tickets or tokens are distributed or sold and prize winners are either secretly predetermined or ultimately selected by some form of random drawing. Applying this interpretation to LBs 522 and 534, it is our opinion that, for the reasons stated below, the amendments proposed are likely unconstitutional. I. Previous Attorney General Opinions. In your request, you reference two recent Attorney General opinions addressing the constitutionality of legislation which proposed to authorize "slot machines" or other "electronic gaming devices" as "lotteries" for charitable or community betterment purposes. Op. Att'y Gen. No. 95085 (November 17, 1995); Op. Att'y Gen. No. 96007 (January 23, 1996). In Opinion No. 95085, based on our understanding that the terms "slot machine" or "video or electronic gaming device" referred to gaming devices in the nature of "traditional" slot machines, or video devices based on a slot machine theme, and video or electronic devices based on games such as poker, blackjack, or dice, (id. at 2n.1), we concluded: [T]he Legislature may not enact legislation to permit the use of "slot machines" or other "electronic gaming devices" under the constitutional grant permitting the Legislature to authorize "lotteries, raffles, and gift enterprises. . .the proceeds of which are used for charitable or community betterment purposes." Under Article III, § 24, the Legislature is precluded from authorizing "any game of chance or any lottery or any gift enterprise" except as provided in the Constitution. In our opinion, "slot machines" or other forms of "electronic gaming devices" fall within the category of "games of chance" prohibited by the Constitution, and not "lotteries" which the Legislature may sanction under its authority to permit "lotteries" for charitable or community betterment purposes. Accordingly, "slot machines" or other "electronic gaming devices" may not be authorized by the Legislature for these purposes absent an amendment to the Nebraska Constitution. Id. at 24-25. Subsequently, in Opinion No. 96007, in which we addressed the constitutionality of legislation (LB 915) identical to LB 534 proposing to amend the County and City Lottery Act to allow "lotteries" to be "based on some other element of chance", we stated: [T]he issue is not whether the Constitution prohibits the use of video or electronic gaming devices in the conduct of a "lottery;" rather, as we have stated, the issue is whether the gambling activity constitutes a permissible "lottery," as opposed to a prohibited "game of chance.". . .Thus, the Legislature may not constitutionally adopt a definition of "lottery" which purports to authorize "lotteries" for charitable or community betterment purposes which, in fact, constitute prohibited "games of chance." Id. at 3-4. II. Application of Prior Opinions to LBs 522 and 534. As your opinion request relates to two distinct legislative proposals for expanded gambling, we will address each separately for purposes of our analysis. A. LB 522 LB 522, as noted, contains language proposing to amend provisions of both the Nebraska Pickle Card Lottery Act and the Nebraska County and City Lottery Act. You have presented three separate questions pertaining to the constitutionality of LB 522. 1. "Electronic" Pickle Cards. Sections 1 through 7 of LB 522 propose to amend the Nebraska Pickle Card Lottery Act, Neb. Rev. Stat. §§ 9-301 to 9-356 (1991 and Cum. Supp. 1996) to authorize a form of "electronic" pickle card device. Section 2 would amend the definition of "pickle card" in § 9-315 to include an "electronic pickle card", which would be "electronically open[ed]. . .by moving a finger or other physical object over the face of the displayed pickle card,. . . ." You state that [t]his provision is intended to authorize use of technology which electronically duplicates a pickle card lottery as currently authorized by Nebraska law, and is intended to contain all of the characteristics of the paper game including: finite pool of predetermined winning and losing tickets, random selection of winners and losers, number and amount of preselected prizes, having players play against one another as opposed to playing against a machine, and visual depiction of the same types of symbols as well as electronic duplication of the manner of selecting winners. The language of this section continues to require that the person play the game by opening the card to reveal certain numbers, letters, symbols or configurations in order to determine winners or losers and does not authorize slot machines, video or electronic devices based on a slot machine theme, or video, computer or electronic gaming devices based on games such as poker, blackjack, or dice. This provision is only intended to change the means of accessing the game, similar to the concept of using a fax machine to send a letter rather than the post office; the content is not changed, merely the means of transmitting it. Based on this description, your question is whether the Legislature may authorize use of this electronic pickle card device as a lawful form of "lottery", or whether such would be a "game of chance" prohibited by art. III, § 24, of the Nebraska Constitution? The Nebraska Supreme Court upheld the validity of...