Tichenor v. Missouri State Lottery Com'n

• Citation: 742 S.W.2d 170
• Decision Date: 05 January 1988
• Docket Number: No. 69992,69992
• Parties: W.B. TICHENOR, Appellant, v. MISSOURI STATE LOTTERY COMMISSION, et al., Respondents.
• Court: United States State Supreme Court of Missouri

Page 170

742 S.W.2d 170

W.B. TICHENOR, Appellant, v. MISSOURI STATE LOTTERY COMMISSION, et al., Respondents.

No. 69992.

Supreme Court of Missouri En Banc.

Jan. 5, 1988.

Duane Benton, Jefferson City, for appellant.

William L. Webster, Atty. Gen., David G. Edwards, Asst. Atty. Gen., Jefferson City, for respondents.

BLACKMAR, Judge.

The Missouri constitutions of 1865, 1875, and 1945 contained strict provisions against lotteries. ¹ These provisions have been gradually eroded in recent years, as the state has tried to fill its coffers from the pockets of willing gamblers in preference to further burdening the reluctant taxpayers. ² At the 1984 general election the voters approved an amendment submitted by the legislature authorizing the general assembly to establish a "Missouri state lottery." Mo. Const. Art. III, Sec. 39(b).

The constitutional provision was not self enforcing, and the general assembly adopted enabling legislation at its next session, establishing the Missouri Lottery Commission and enjoining it to proceed so that "a lottery may be initiated at the earliest feasible and practicable time." L.1985, S.B. 44; Sec. 313.200-250, 220, RSMo 1986. The commission then approved and instituted various lottery games. Also in accord with the constitutional imperative, a maximum of 45% of the proceeds of ticket sales is distributed as prizes, a maximum of 10% is allocated for expenses, and a minimum of 45% is designated for the general revenue fund of the state treasury. Art. III, Sec. 39(b)(3), Mo. Const. The general assembly appropriated "start-up" money to get the enterprise in operation, but its power to do so was limited to the first year of operation and the advances must be repaid out of lottery proceeds within two years. Section 313.330, RSMo 1986. The lottery is now wholly dependent upon the yield from ticket sales, and no additional funds may now be appropriated. Section 313.321, RSMo 1986.

The lottery did not produce as hoped and the commissioners were vexed because Missourians have continued to venture large sums in lotteries with more attractive prize structures sponsored by neighboring states. They saw a solution in a proposed "Multi-State Lottery," in which a consortium of states would contribute to an attractive prize pool, to be awarded in a drawing for which all ticketholders in the participating states would be eligible. The commissioners sought statutory authority. The proposals cleared several legislative hurdles but fell short of enactment at the 1987 session of the general assembly. The commissioners then proceeded on their own initiative, entering into an agreement designed to bring Missouri into the multi-state lottery by February of 1988.

By the terms of this agreement the Missouri commission will receive all the proceeds from lottery tickets sold in this state, as in the past. Forty-five percent of the proceeds will be allocated to the state treasury and 10% will be retained for expenses. The balance will be transmitted to the managers of the multi-state enterprise, with its headquarters in Des Moines, Iowa, for inclusion in its pool. Holders of tickets purchased in Missouri may win prizes to which the other participating states have contributed, or the Missouri proceeds may benefit players in other states, depending on the luck of the draw. It is possible that prospects in other states will be lured by advertisements which would not be permissible by Missouri's strict standards, but there will be no advertising in Missouri which violates our constitutional or statutory provisions. No state funds will be appropriated to facilitate Missouri's participation in the multi-state lottery, but the commission has expended funds in its possession, presumably out of the 10% allocated for expenses, to "explore, join and participate in the multistate lottery," and no doubt will continue to do so. The commission estimates that as much as $300,000 may be so expended.

Even though a net gain from the multi-state lottery is expected and no money will be taken from the state treasury, we believe that the funds of the lottery commission are "state funds" in the broad sense, and that the plaintiff as a citizen and taxpayer of Missouri has standing to challenge the legality of these expenditures in court. Berghorn v. Reorganized School District No. 8, 364 Mo. 121, 260 S.W.2d 573, 581 (1953); Missourians for Separation of Church and State v. Robertson, 592 S.W.2d 825, 839 (Mo.App.1979). He alleges that Missouri's participation in a multi-state lottery is illegal by reason of several provisions of the state and federal constitutions and statutes.

The case was tried on stipulated facts. The trial court found that the plaintiff's points were not well taken and entered judgment denying the relief sought, without additional findings or opinion. The plaintiff appealed to this Court, suggesting that we have initial jurisdiction because the proposed action involves possible conflict with a provision of the constitution of this state (Article III, Sec. 39(b)), and because the construction of revenue laws of this state (Sec. 313.200 to 313.350, RSMo 1986) is required.

Although the jurisdictional grounds assigned are not pellucid, we conclude that the notice of appeal was filed in entire good faith and proceed to decide the case without further jurisdictional inquiry because of the importance of the questions presented. Mo. Const. Art. V, Secs. 3, 4; Sermchief v. Gonzales, 660 S.W.2d 683 (Mo. banc 1983). We are greatly helped by the excellent briefing and oral argument by counsel for both sides, on an expedited schedule. We find that the proposed entry into the multi-state lottery is not facially invalid for any of the reasons assigned, and affirm the judgment of the circuit court.

I.

It is first argued that the phrase "Missouri state lottery" as used in the constitution is a limitation on the authority of the legislature and of the commission, and that a lottery in which the proceeds of sales of Missouri tickets go into a pot which may be won by a person who has purchased a ticket in another state, and in which Missouri residents may win prizes to which ticket purchasers in other states contribute, cannot be brought within the compass of the constitutional designation. This point, if well taken, is dispositive of the case. Neither the legislature nor the commission may establish a lottery which is not within the constitutional authority.

The plaintiff-appellant argues that the constitutional authorization should be construed strictly because it represents an exception to the historic Missouri policy against lotteries and gambling enterprises of all kinds. The defendant officials contend, contrariwise, that the voters of the state showed that they wanted a lottery and that the constitutional authorization should be liberally construed to give effect to this authorization. We suggest that the words should be read in accordance with their plain meaning, so as to carry out the purpose manifested by the voters of the state in approving the amendment referred to them by the general assembly. ³ By reason of the amendment, a lottery in which all the profits inure to the benefit of the state of Missouri accords with the public policy of the state, rather than contravening it. We should not construe the constitutional provision in such a way as to thwart the voters' purpose, and should impose only such restrictions as are clearly required by the statute.

The intent we look to, furthermore, is that of the voters. The legislature may only lay a proposed constitutional amendment before the electorate. Its intent is immaterial except to the extent that it may be found in the text of the proposal actually placed on the ballot. Thus the circumstance that an earlier legislative proposal contained language which might be more readily supportive of the authority to participate in a multi-state lottery enterprise is of little moment. Nor is it significant that the full text of the amendment does not appear on the ballot. The text is available to the voters, at the polling place and elsewhere. The text is our only authentic basis for ascertaining intent.

The plaintiff points out that, if the commission's proposal is upheld, the proceeds from Missouri tickets may be awarded as prizes to non-Missourians. This is not an important circumstance. The basic purpose of the Missouri state lottery is to lift money from the pockets of Missourians, not to reward them. The prizes are only a means to this end. Out-of-state residents are welcome to purchase tickets and to receive prizes in the present lottery operations, if they can handle the logistics.

The plaintiff points to constitutional and statutory provisions in other states which explicitly authorize multi-state lotteries. The fact that the framers of the amendment might have relieved us of the construction problem by doing a better job of drafting does not require us to indulge in a narrow reading of their composition. The manifest purpose was to permit the legislature to establish a lottery for the benefit of the state treasury. Restrictions deemed necessary in the public interest are clearly phrased. We should hesitate to imply restrictions which are not expressly stated.

We conclude that the phrase "Missouri state lottery" should not be read as a limitation on the authority of the State Lottery Commission to enter into a multi-state lottery venture otherwise complying with the details of the Missouri statute. The proposal accords with the clearly stated limitations on distribution of proceeds and advertising. The language, "Missouri state lottery," serves a substantial purpose in telling us that the general assembly may not authorize a lottery for the benefit of a political subdivision, or a charitable or private interest. The plaintiff's fears that a decision against his position would open the door to joint aleatory ventures with other entities within the state...