State ex rel. Rodriguez v. American Legion Post No. 99, Club License No. 1626

• Decision Date: 05 November 1987
• Docket Number: Nos. 9436,9527 and 9530,s. 9436
• Citation: 750 P.2d 1110,106 N.M. 784,1987 NMCA 137
• Parties: STATE of New Mexico, ex rel. Abe RODRIGUEZ, Director, Department of Alcoholic Beverage Control, and Steven Schiff, District Attorney of the Second Judicial District, Plaintiffs-Appellees, v. AMERICAN LEGION POST NO. 99, CLUB LICENSE NO. 1626, et al., Defendants-Appellants.
• Court: Court of Appeals of New Mexico

Page 1110

750 P.2d 1110

106 N.M. 784

STATE of New Mexico, ex rel. Abe RODRIGUEZ, Director,

Department of Alcoholic Beverage Control, and

Steven Schiff, District Attorney of the

Second Judicial District, Plaintiffs-Appellees, v. AMERICAN LEGION POST NO. 99, CLUB LICENSE NO. 1626, et al.,

Defendants-Appellants.

Nos. 9436, 9527 and 9530.

Court of Appeals of New Mexico.

Nov. 5, 1987.

Certiorari Denied Feb. 26, 1988.

[106 N.M. 785] Hal Stratton, Atty. Gen., Holly A. Hart, John M. Paternoster, Asst. Attys. Gen., Santa Fe, for plaintiffs-appellees.

John P. McCollum, Albuquerque, for defendant-appellant, American Legion Post No. 99.

Ken Cullen, Albuquerque, for defendant-appellant, Solo Club, Inc.

Michael E. Vigil, Marchiondo, Vigil & Voegler, P.A., Albuquerque, for defendants-appellants.

OPINION

BIVINS, Judge.

Appellant organizations (Clubs) and appellees State of New Mexico and Schiff (state) disputed the application of the Bingo and Raffle Act, NMSA 1978, Sections 60-2B-1 to -14 (Repl.Pamp.1981 & Cum.Supp.1987) (the Act) to certain activities of the Clubs. The dispute was submitted to the District Court of the First Judicial District as an action for declaratory judgment filed by the state. The parties entered into a stipulation of facts and submitted cross-motions for summary judgment. After reviewing the parties' arguments, the district court granted the state's motion and issued a declaratory judgment holding that the Clubs' activities constituted gambling not authorized by the Act. These appeals ensued. On September 23, 1986, we issued an order consolidating the cases for purposes of appeal and staying the declaratory judgment pending the outcome of the appeal.

ISSUE

The only issue on appeal is whether the Clubs' video gaming machines are protected by the Act. The Clubs contend that their practice of awarding prizes and cash based on the results of the games constitutes the operation of games of chance sanctioned by the Act. We disagree and affirm the trial court.

FACTS

In 1981 the New Mexico Legislature passed the Act. It allows certain nonprofit organizations to conduct games of chance commonly known as bingo and raffles, as long as the entire net proceeds of any game are spent for educational, charitable, patriotic, religious or public-spirited purposes. Secs. 60-2B-3 and -8.

Following the passage of the Act, the Clubs placed electronic or mechanical video gaming machines on their premises for the use of their customers. These machines award free games to lucky players, and the Clubs convert those free games into cash or prizes by, for example, paying the winner 25cents for each free game. The state discovered this practice and agreed to refrain from immediate prosecution and instead to file an action for a declaratory judgment to allow the courts to determine the legality of the Clubs' practice under the Act. To expedite this action, the parties stipulated to the following key facts: (a) the Clubs have video gaming machines on their premises; (b) the games are operated by putting a coin or tokens (purchased from the Clubs) into a slot; (c) the players who win free games from the machines are awarded prizes in cash or merchandise; (d) the award of free games, and thus of the prizes, is determined by chance, although perhaps accompanied by some skill; (e) the machines are available for play during the entire time in which the Clubs are open to members; and (f) the Clubs are all licensed under the Act or have applied for licenses under the Act. The parties demonstrated for the trial court one type of machine found in the Clubs. This machine was an electronic draw poker game; the machine deals the player a hand that appears on the screen. The player can discard cards and draw new ones, or stand pat, by pressing appropriate buttons. The game ends after one deal/discard/draw sequence. If at the end of the game the player's hand includes a pair of jacks or better, the player has won one or more free games. The number of free games depends on the hand; two pairs are worth two games; three-of-a-kind, three; and so on up to a maximum of 250 free games for a royal flush. The player can then play those free games or cash them in with the bartender for 25cents per game or, in some Clubs, merchandise. Thus, a player can potentially win $62.50 on one 25cents play of the machine. This game allows one player to play up to twenty games at one time, which means the player can risk $5.00 on each play. Not all of the Clubs' games are poker games; other games include electronic blackjack, bingo, and simulated horse-racing, as well as games not described in the record.

DISCUSSION

The Act defines "game of chance" as

that specific kind of game of chance commonly known as bingo or lotto in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random and that specific kind of game of chance commonly known as raffles which is conducted by drawing for prizes or the allotment of prizes by chance or by the selling of shares, tickets or rights to participate in the game[.]

Sec. 60-2B-3(M). The Clubs construe this provision to mean that the legislature authorized three types of raffles: (1) drawing for prizes; (2) allotment of prizes by chance; (3) selling of shares, tickets or rights to participate in the game. They then argue that their machines allot prizes by chance by awarding free games that can be converted into prizes. Thus, the Clubs contend their operations of these games are "raffles" under the Act.

The Clubs bolster their position by referring to the statutory and common-law definitions of "lottery" found in NMSA 1978, Section 30-19-1(C) (Cum.Supp.1987) and in cases such as State v. Jones, 44 N.M. 623, 107 P.2d 324 (1940). These definitions state essentially that a lottery exists any time one pays consideration for an opportunity to win a prize awarded by chance. The Clubs argue that the definitions of "lottery" mirror the "allotment of prizes by chance" phrase in the definition of raffles. Therefore, the Clubs contend the legislature must have had the definitions of lottery in mind when defining raffles. This argument would make the definitions of "lottery" and "raffle" synonymous; as such, any scheme for the distribution of prizes by chance in exchange for consideration (the lottery definition) would be a raffle. Thus, the Clubs conclude the phrase "commonly known as raffles" would include any game in which consideration was paid to win a prize by chance. Under this broad definition of "commonly known as raffles," the Clubs' activities would be allowed under the Act. To support their broad definition of "raffles," the Clubs cite numerous foreign cases. We find these cases unpersuasive. We conclude that the language of our statute, properly construed, provides a resolution of the appellate issue. See generally Annot., Validity and Construction of Statute Exempting Gambling Operations Carried on By Religious, Charitable, or Other Nonprofit Organizations from General Prohibitions Against Gambling, 42 A.L.R.3d 663 (1972).

If we were to adopt the Clubs' broad definition of "raffles," any game in which a prize is awarded by chance would qualify as a raffle. Organizations licensed under the Act could operate slot machines, roulette wheels, many types of card games, and, in fact, virtually any sort of gambling device as long as the net profits were spent for lawful purposes as defined in the Act. We reject this interpretation. It is not reasonable to assume that the legislature would authorize such widespread gambling without explicitly saying so, and this court must presume that the legislature acted...