Mississippi Gaming Com'n v. Treasured Arts, Inc., 96-CA-00193-SCT

• Decision Date: 11 September 1997
• Docket Number: No. 96-CA-00193-SCT,96-CA-00193-SCT
• Citation: 699 So.2d 936
• Parties: The MISSISSIPPI GAMING COMMISSION v. TREASURED ARTS, INC.
• Court: Mississippi Supreme Court

Page 936

699 So.2d 936

The MISSISSIPPI GAMING COMMISSION v. TREASURED ARTS, INC.

No. 96-CA-00193-SCT.

Supreme Court of Mississippi.

Sept. 11, 1997.

Michael C. Moore, Atty. Gen., Jackson, James R. Nixon, M. Carole Brand, R. Stewart Smith, Jr., Joan Myers, Special Asst. Attys. Gen., Jackson, Leyser Q. Morris, Jackson, for appellant.

Tim Waycaster, Waycaster & Warren, Jackson, David W. Baria, Hubbard Pierce & Baria, Jackson, for appellee.

Before PRATHER, P.J., and JAMES L. ROBERTS, Jr., and MILLS, JJ.

JAMES L. ROBERTS, Jr., Justice, for the Court:

STATEMENT OF THE CASE

¶1 This case was originally filed by Treasured Arts, Inc. (TAI), as a Complaint for Declaratory Judgment and for Other Relief in the Circuit Court of the First Judicial District of Hinds County, Mississippi on May 22, 1995, against the Mississippi Gaming Commission (MGC). The lower court was requested to declare that two products, Dinosaur Art Cards and Treasured Art Phone Cards, did not fit the definition of a lottery and are legally marketable in Mississippi. Both products were marketed with a game piece attached that is similar to "scratch-and-win" game pieces distributed as promotional devices by marketers of other products in the state.

¶2 Each party filed Motions for Summary Judgment, limiting the issues to whether consideration was being paid for the game piece portion of the product, thereby constituting an illegal lottery under the prior holdings of this Court and the laws of Mississippi. There was a factual dispute as to what the correct retail value was to be attributed to each per minute unit of long distance time. TAI submitted an affidavit showing the price it had to pay for each unit was $.66. The MGC produced an affidavit showing the price charged by another long distance carrier to be $.45 per unit. This potential fact issue was resolved when TAI stipulated to the second affidavit for purposes of the Motions for Summary Judgment only.

¶3 On December 27, 1995, the lower court granted TAI's Motion for Summary Judgment relying on Williams Furniture Co. v. McComb Chamber of Commerce, 147 Miss. 649, 112 So. 579 (1927). MGC appeals the ruling of the lower court raising the following issues:

I. WHETHER CONSIDERATION FOR A CHANCE TO WIN A CASH PRIZE WHEN A CONSUMER PURCHASES LONG DISTANCE TIME IN EXCESS OF THE USUAL VALUE OF THE LONG DISTANCE TIME AND RECEIVES THE CHANCE TO WIN A PRIZE.

II. WHETHER THE TREASURED ARTS POWER CALL CARD IS A LOTTERY UNDER THE LAWS OF MISSISSIPPI.

STATEMENT OF THE FACTS

¶4 TAI sells the Treasured Arts Power Call Card (Card). The Card costs $2 and allows three minutes of long distance telephone talk time with United States Long Distance (USLD), a long distance telephone service provider. The long distance talk time is prepaid by TAI and is guaranteed to be provided to the purchaser of the Card.

¶5 The Card is perforated, with one side containing a "scratch-and-win" game piece and the other written instructions on how to receive a maximum of three minutes long distance phone time through USLD. The Card may be torn in half, and the purchaser has the opportunity to win monetary prizes ranging from $1 to $50,000 from the "scratch-and-win" game.

¶6 This Card was presented to the MGC for a formal opinion as to its legality. MGC, through its attorney Carole Brand, responded by letter of March 2, 1995, that it would not issue a formal opinion and provided no additional direction to TAI as to the legality of the Card. Subsequently, TAI filed its Complaint in the lower court seeking declaratory judgment.

¶7 The MGC initially took the position that a distinction exists between games like the Pepsi Cola bottle cap game or the Jitney Jungle "scratch-and-win" game and the TAI Card game, because in the other games the purchaser receives a valuable product or service in exchange for his money and those game pieces are free. The MGC contended that a purchaser receives nothing of value when purchasing the Card, therefore any consideration paid for the Card is actually consideration for an opportunity to play the game.

¶8 Affidavits submitted to the lower court regarding the price as to retail value of per minute long distance time were conflicting. However, TAI stipulated to the per minute valuation by Miss. Lynn Reeder, a LDDS WorldCom employee, for purposes of the Motions for Summary Judgment. Her affidavit stated that the PhonePass TM pre-paid cards have a retail worth of $.45 per minute, which was the tariffed rate. She continued that the LDDS cards could be sold at a cheaper rate depending on the retailer.

¶9 The MGC contends that the TAI Card constitutes a lottery in violation of both Mississippi common and statutory law. The MGC states that the Card offers a prize by chance and consideration is given for the chance to win that prize. TAI retorts that neither the MGC nor any other state agency nor the courts of this state on a case-by-case basis should be in a position of determining what any given product is worth to any given consumer thereby establishing what a fair consideration should be for the product.

DISCUSSION OF THE ISSUES

I. WHETHER CONSIDERATION FOR A CHANCE TO WIN A CASH PRIZE WHEN A CONSUMER PURCHASES LONG DISTANCE TIME IN EXCESS OF THE USUAL VALUE OF THE LONG DISTANCE TIME AND RECEIVES THE CHANCE TO WIN A PRIZE.

II. WHETHER THE TREASURED ARTS POWER CALL CARD IS A LOTTERY UNDER THE LAWS OF MISSISSIPPI.

¶10 Because these issues are so intertwined and virtually the same such that the answer to one will sufficiently provide an answer to the other, the Court will discuss the two together. To begin, it is necessary to delineate the appropriate standard of review.

¶11 The Court employs a de novo standard of review in reviewing a lower court's grant of summary judgment motion. Roussel v. Hutton, 638 So.2d 1305, 1314 (Miss.1994). Summary judgment is appropriate if the evidence before the Court--admissions in the pleadings, answers to interrogatories, depositions, affidavits, etc.--shows there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Newell v. Hinton, 556 So.2d 1037, 1041 (Miss.1990). This Court does not try issues on a Rule 56 motion, but only determines whether there are issues to be tried. Mississippi Ins. Guar. Assoc. v. Byars, 614 So.2d 959, 963 (Miss.1993). In reaching this determination, the Court examines affidavits and other evidence to determine whether a triable issue exists, rather than the purpose of resolving that issue. Comment, Miss. R. Civ. P. 56.

¶12 The common law definition of a lottery is: "(1) The offering of a prize; (2) the awarding of a prize by chance; (3) the giving of a consideration for the opportunity to win the prize; and all three of these elements must concur in order to constitute a lottery." Williams Furniture Co. v. McComb Chamber of Commerce, 147 Miss. 649, 112 So. 579, 579-80 (1927). The offer of a prize and an award are not enough by themselves to be considered a lottery. A purchaser must actually give consideration for the opportunity to win the prize. Id.

¶13 The Legislature enacted Miss.Code Ann. § 75-76-3, which incorporates the same three basic elements of consideration, chance and prize. The pertinent portion of that section is set forth as follows:

(6) The Legislature recognizes that Section 98 of the Mississippi Constitution of 1890 prohibits the conducting of any lottery in this state and that, while not defining the term "lottery," Section 98 clearly contemplates, as indicated by specific language contained therein, that a lottery involves (a) The player or players pay or agree to pay something of value for chances, represented and differentiated by tickets, slips of paper or other physical and tangible documentation upon which appear numbers, symbols, characters or other distinctive marks used to identify and designate the winner or winners; and

the sale of tickets and a drawing in order to determine the winner. The Legislature also recognizes that Section 98 of the Mississippi Constitution of 1890 directs the Legislature to provide by law for the enforcement of its provisions. Therefore, in carrying out its duties under the Constitution and effectuating the intent of Section 98, the Legislature hereby finds that a lottery, as prohibited by the Constitution, does not include all forms of gambling but means any activity in which:

(b) The winning chance or chances are to be determined by a drawing or similar selection method based predominately upon the element of chance or random selection rather than upon the skill or judgment of the player or players; and

(c) The holder or holders of the winning chance or chances are to receive a prize or something of valuable consideration; and

(d) The activity is conducted and participated in without regard to geographical location, with the player or players not being required to be present upon any particular premises or at any particular location in order to participate or to win.

Miss.Code Ann. § 75-76-3(6)(a-d).

¶14 The parties are in disagreement as to whether a purchaser of a Card actually pays any consideration for the opportunity to chance to win a prize such that there is a violation of subsection (a) of the statute. TAI asserts that the consideration paid for the Card is paid for the card itself and not for the game piece attached. If true, this would mean no consideration is paid for the opportunity to win a prize and the product does not constitute a lottery. However, the MGC claims the purchaser of a Card is paying more than the maximum retail value for per minute long distance time, which results in consideration for the opportunity to win the monetary prizes offered by TAI.

¶15 Here, as in Williams Furniture Co., this Court is called upon to determine whether a promotional scheme is a lottery. In Williams Furniture Co., merchants were permitted to give customers tickets that could be used by the customer on either the...