Harris v. Missouri Gaming Com'n

• Citation: 869 S.W.2d 58
• Decision Date: 25 January 1994
• Docket Number: No. 76123,76123
• Parties: Troy HARRIS, et al., Appellant, v. The MISSOURI GAMING COMMISSION, et al., Respondents.
• Court: United States State Supreme Court of Missouri

Page 58

869 S.W.2d 58

Troy HARRIS, et al., Appellant, v. The MISSOURI GAMING COMMISSION, et al., Respondents.

No. 76123.

Supreme Court of Missouri En Banc.

Jan. 25, 1994.

As Modified on Denial of Rehearing Feb. 22, 1994.

Curtis E. Woods, Terry W. Shackmann, David L. Black, Kenneth A. Schifman, Kansas City, Richard S. Brownlee, III, Mary D. Winter, Jefferson City, for appellant.

Jeremiah W. (Jay) Nixon, Atty. Gen., Don Downing, Deputy Asst. Atty. Gen., Michael L. Boicourt, Orval E. Jones, Asst. Attys. Gen., Jefferson City, W. Stanley Walch, James W. Erwin, Lawrence C. Friedman, Matthew J. Fairless, St. Louis, for respondents.

BENTON, Judge.

On April 28, 1993, the General Assembly enacted S.B. 10 & 11 "relating to the regulation of certain gaming activities" (the "Act"). Previously at the general election on November 3, 1992, the People approved a referendum law H.B. 149 "relating to certain gaming activities." ¹ The General Assembly, however in its Act repealed almost all of H.B. 149. The Act created a Gaming Commission to regulate riverboat gambling--previously done by the Tourism Commission under H.B. 149. § 313.004 RSMo Supp.1993. ² The Act also deleted H.B. 149's non-severability clause, and H.B. 149's preferences for Missouri products and workers. § 313.850, deleting § 21.4 of H.B. 149; § 313.812.4, deleting § 6.4 of H.B. 149. The Act continued special exemptions from licensing requirements for certain stretches of the Mississippi riverbank and for certain boats (though the Act, for the first time, allowed all riverboats to be permanently docked.) §§ 313.805(15), 313.812.3. The Act essentially maintained H.B. 149's definition of riverboat gambling games. § 313.800(8).

On April 30, 1993--one day after the Governor approved the Act--Troy Harris, plaintiff, filed a first amended petition for declaratory judgment that the Act was unconstitutional in violation of the Missouri Constitution, Article III, §§ 39(9), 40(28), and 40(30). Defendants filed motions to dismiss; no evidentiary hearing has yet been held. On July 14, 1993, the circuit court ruled that plaintiff Harris was not entitled to the entry of a declaratory judgment in his favor.

This Court reverses and remands for proceedings consistent with this opinion.

I.

Defendants challenge the standing of plaintiff Harris. In his petition, Harris--"a taxpayer and registered voter in this state"--attacks the "expenditure of state taxpayer funds from the general revenue and other public funds and state resources, including the time and effort of state officials who are paid by state funds to carry out their various duties under the Act."

For the fiscal year ending June 30, 1994, the General Assembly transferred from the state treasury $3 million for "start-up costs" of the Gaming Commission. H.C.S.S.B. 419, 87th General Assembly (1993) (§ 020). Defendants stress that the General Assembly intends that riverboat fees reimburse the treasury. Id. (§ 025) However, such reimbursement need not occur before July 1, 1995. § 313.835 enacted as § 16, S.B. 10 & 11, 87th General Assembly (1993).

In analogous circumstances, a taxpayer had standing to attack Missouri's entry into the multistate lottery. Tichenor v. Missouri State Lottery Com'n, 742 S.W.2d 170, 172 (Mo. banc 1988). Following Tichenor, this Court held that a taxpayer has standing to challenge an alleged illegal spending of public funds if there is "a direct expenditure of funds generated through taxation...." Eastern Mo. Laborers District Council v. St. Louis County, 781 S.W.2d 43, 47 (Mo. banc 1989) (citing eight of this Court's opinions spanning 120 years). Plaintiff Harris alleges a direct expenditure of funds generated through taxation. Based on the petition, plaintiff has standing.

II.

Harris first contends that S.B. 10 & 11 violates Article III, § 39(9) of the Missouri Constitution: "The general assembly shall not have the power ... to authorize lotteries or gift enterprises...." The parties agree that this constitutional prohibition does not apply to a proper constitutional amendment. See Payne v. Kirkpatrick, 685 S.W.2d 891, 903 (Mo.App.1984), approved in Barnes v. Bailey, 706 S.W.2d 25, 30 (Mo. banc 1986). Defendants assert that this prohibition also does not apply to S.B. 10 & 11.

S.B. 10 & 11 was enacted by the General Assembly and approved by the Governor. The enacting clause of S.B. 10 & 11 follows the constitutional mandate for the style of the laws of this State: "Be it enacted by the General Assembly of the State of Missouri, as follows." Mo. Const. Art. III, § 21.

S.B. 10 & 11 explicitly "repeal[s]" the referendum law, H.B. 149, enacted by the General Assembly and approved by the voters. ³ The power to repeal or modify a referendum law is within the power of the legislature. State ex rel. Drain v. Becker, 240 S.W. 229, 232 (Mo. banc 1922). Enactment of a referendum law does not "deprive any member of the General Assembly of the right to introduce any measure," including S.B. 10 & 11. See Mo. Const. Art. III, § 52(b).

The challenged law, S.B. 10 & 11, is clearly an act of the General Assembly, and thus subject to the limitations in Article III, § 39(9). The referendum law, H.B. 149, is not challenged in this suit and is therefore irrelevant.

Defendants claim that S.B. 10 & 11 is not a "new enactment" but simply a "continuation" of H.B. 149, and thus by § 1.120 RSMo 1986, this Court must review H.B. 149 on this appeal. Even assuming that § 1.120 applies, H.B. 149 and S.B. 10 & 11 are significantly different. S.B. 10 & 11 creates a Gaming Commission and a new riverboat gambling regulatory scheme, introduces a different regulator for charitable bingo, deletes requirements that riverboats use Missouri products and employees, dedicates tax revenue from riverboats to a different fund and use, repeals the limit on the percentage of the boat's space used for gambling, provides severability for the separate provisions of the law, and changes various other elements previously in H.B. 149. See §§ 313.004, 313.005(3), 313.800-313.850.

Defendants particularly stress the similarity of the definition of "gambling game" in both S.B. 10 & 11 and H.B. 149, as well as other authorizing provisions common to both laws. Compare § 313.800(8) with § 1(10) of H.B. 149. However, even in these provisions, the General Assembly changed the wording from that in H.B. 149. S.B. 10 & 11 is a new enactment of the General Assembly subject to Article III, § 39(9) of the Constitution.

III.

It has been generally acknowledged that there is no fixed technical or legal meaning of the term "lottery" and that the term must be construed in a popular sense. State ex inf. McKittrick v. Globe-Democrat Publishing Co., 341 Mo. 862, 110 S.W.2d 705, 713 (Mo. banc 1937); State v. Mumford, 73 Mo. 647, 650 (Mo.1881); 38 Am.Jur.2d Gambling § 5 (1968). There is also ample authority describing the rationale for singling lotteries out from other forms of gambling. In 1970 this Court, citing the United States Supreme Court, said:

We decline the opportunity to dilute the established laws prohibiting all lotteries in Missouri. Our view finds strong support in Lucky Calendar Co. v. Cohen, 117 A.2d 487, 492-93 (N.J.1955), wherein Chief Justice Vanderbilt said:

'Of all the forms of gambling, lotteries have been the most condemned by the courts. Over a century ago the United States Supreme Court unanimously condemned their anti-social effects in comparison with ordinary gambling in sweeping terms that reflected judicial experience generally with lotteries:

'Experience has shown that the common forms of gambling are comparatively innocuous when placed in contrast with the widespread pestilence of lotteries. The former are confined to a few persons and places, but the latter infests the whole community: it enters every dwelling; it reaches every class; it preys upon the hard earnings of the poor; it plunders the ignorant and simple.' Phalen v. Commonwealth of Virginia, [49 U.S.] 8 How. 163, 168, 12 L.Ed. 1030, 1033 (1850).

The lure of the chance for 'easy money' has not changed in the intervening century. The enormous profits to be had from lotteries have attracted the devious ingenuity of those who seek to profit by catering to the weakness of those whom the statute aims to protect, primarily for the benefit of society in general.

Mobil Oil Corp. v. Danforth, 455 S.W.2d 505, 509 (Mo. banc 1970).

Harris alleges that the games authorized by the Act are "lotteries" by Article III, § 39(9), of the Missouri Constitution:

The general assembly shall not have the power: ... (9) Except as otherwise provided in section 39(b) or section 39(c) of this article, to authorize lotteries or gift enterprises for any purpose, and shall enact laws to prohibit the sale of lottery or gift enterprise tickets, or tickets in any scheme in the nature of a lottery; except that, nothing in this section shall be so construed as to prevent or prohibit citizens of this state from participating in games or contests of skill or chance where no consideration is required to be given for the privilege or opportunity of participating or for receiving the award or prize and the term "lottery or gift enterprise" shall mean only those games or contests whereby money or something of value is exchanged directly for the ticket or chance to participate in the game or contest....

This Court has repeatedly held that the elements of a lottery are consideration, chance, and prize. Mobil Oil Corp., 455 S.W.2d at 507; State v. McEwan, 343 Mo. 213, 120 S.W.2d 1098, 1099 (Mo. banc 1938); McKittrick, 110 S.W.2d at 713; State ex rel. Home Planners Depository v. Hughes, 299 Mo. 529, 253 S.W. 229, 230 (Mo. banc 1923). The Constitution itself adopts this definition: the term "lottery ... shall mean only those games or contests whereby money or something of value is exchanged directly for the ... chance to participate in the game...." Mo. Const. Art. III, § 39(9).

The parties do...