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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6291 May 7, 1985 LOTTERIES: City offering a prize based upon random drawing from pool of names of individuals paying parking meter fines A city which offers a monetary prize based upon a random drawing from a weekly pool of names of individuals who have paid parking meter fines promptly is conducting an unlawful lottery not authorized by the Legislature. Mr. David M. Savu Ishpeming City Attorney 105 South First Street Ishpeming, Michigan 49849 You advise that the Ishpeming City Council proposes to establish a weekly pool of names of individuals who have paid parking meter fines, that a random drawing would be held each week, and that the name drawn would receive a $25.00 prize. Dated May 23, 1984, the Ishpeming City Council adopted Resolution No. 1984-11, described as a 'fine payment incentive system,' to implement such undertaking. You request concurrence in your opinion that this plan would constitute an illegal lottery in violation of c LV of the penal code, MCL 750.372 et seq; MSA 28.604 et seq, or an illegal gift of public funds contrary to Const 1963, art 7, Sec. 26. Territorial laws authorized the conduct of lotteries to raise funds for certain public improvements (in 1805, 1817 and 1829). People v Reilly, 50 Mich 384; 15 NW 520 (1883). Successive Michigan Constitutions (1) prohibited legislative authorization of lotteries. ACF Wrigley Stores, Inc v Wayne Prosecuting Attorney, 359 Mich 215; 102 NW2d 545 (1960). Const 1963, art 4, Sec. 41, was amended in 1972, and presently provides: 'The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law.' Subsequent to the 1972 constitutional amendment, the Legislature has authorized certain lotteries (2) and exemptions from lottery prohibitions. (3) With these exceptions, lotteries continue to be prohibited by MCL 750.372; MSA 28.604, which provides: 'Any person who shall set up or promote within this state any lottery or gift enterprise for money, or shall dispose of any property, real or personal, goods, chattels or merchandise or valuable thing, by the way of lottery or gift enterprise, and any person who shall aid, either by printing or writing, or shall in any way be concerned in the setting up, managing or drawing of any such lottery or gift enterprise, or who shall in any house, shop or building owned or occupied by him or under his control, knowingly permit the setting up, managing or drawing of any such lottery or gift enterprise, or the sale of any lottery ticket or share of a ticket, or any other writing, certificate, bill, goods, chattels or merchandise, token or other device purporting or intended to entitle the holder or bearer or other person to any prize or gift, or to any share of or interest in any prize or gift to be drawn in any such lottery or gift enterprise, or who shall knowingly suffer money or other property to be raffled for in such house, shop or building, or to be there won by throwing or using dice, or by any other game or course of chance, shall for every such offense be guilty of a misdemeanor, punishable by imprisonment in the state prison not more than two [2] years or by a fine of not more than one thousand [1,000] dollars.' (4) The essential elements of a lottery, proscribed by this legislation, are consideration, prize, and chance. People v Brundage, 381 Mich 399; 162 NW2d 659 (1968); 29 ALR3d 881; People, ex rel Attorney General v Koscot Interplanetary, Inc, 37 Mich App 447; 195 NW2d 43, lv den, 387 Mich 765; 54 ALR3d 195 (1972); ACF Wrigley Stores, Inc, supra; United Detroit Theaters Corp v Colonial Theatrical Enterprise, Inc, 280 Mich 425; 273 NW 756 (1937); and Sproat-Temple Theatre Corp v Colonial Theatrical Enterprise, Inc, 276 Mich 127; 267 NW 602 (1936), inter alia. The presence of all three elements are requisite to constitute a lottery violation, and the element of consideration is commonly the more difficult to discern. Consideration can occur directly by the payment of money or value, or indirectly by the conferring of a benefit. People v Brundage, supra; United Detroit Theaters Corp, supra; and Sproat-Temple Theatre Corp, supra. From your description of the plan proposed in Ishpeming, the elements of chance and prize clearly appear. With regard to consideration, the only participants in the game are the persons who pay parking meter fines; the game is not open to everyone without regard to payment. Compare: United Detroit Theater Corp, supra, and Sproat-Temple Theatre Corp, supra, where the theater patrons received a chance to win a prize whether they had paid for a theater admission ticket or not. The scheme was held a lottery even without a direct payment because of the indirect consideration and benefit to the theater operator. The Ishpeming plan resembles direct consideration because there is a payment of money attached to every chance to win a prize. While it might be suggested that the money is only for the payment of the fine and that the chance is available without payment, in reality chances are not available without payment because a person who did not pay a fine could not participate. In OAG, 1937-1938, p 457 (March 18, 1938), it was recognized that payment of a theater admission ticket was also part payment and consideration for a chance at a prize: 'But where the privilege of participation in a drawing for a prize is made dependent upon the purchase of a ticket to a theatre, the transaction is a lottery because the price of the ticket includes not only the right to attend the entertainment but also the chance to win the prize and a valuable consideration has been paid.' In the Ishpeming transaction, the payment of the parking fine includes not only the remittance of the fine, it also includes a chance to win the prize. Further consideration appears in the proposed transaction from the benefit derived on one side or the other. OAG, 1979-1980, No 5692, p 737 (April 23, 1980). When one participant wins a prize, that participant also realizes a benefit. Similarly, the city realizes benefit in the receipt of fine money which might otherwise not be collected, and the added benefit of not having to pursue collection proceedings to collect fines which are due. The facilitation of prompt payment of parking fines and the resultant saving from the avoidance of collection proceedings represents sufficient consideration realized by the city for the prize awarded by the city through the game of chance employed. See, United-Detroit Theaters Corp, supra. However well-intentioned the motivation for the proposed game in Ishpeming (to encourage people to pay their fines promptly), good intentions do not suffice. See, OAG, 1947-1948, No 645, p 519, 520 (November 18, 1947): 'The fact that the overcharge paid by the patron is used for charitable purposes is obviously immaterial. Charitable disposition of funds derived from a lottery or illegal gaming does not in any manner atone the unlawful derivation thereof.' See also, Society of Good Neighbors v Mayor of Detroit, 324 Mich 22; 36 NW2d 308 (1949). It should also be observed that while persons may be encouraged to pay their parking meter fines, the game could at the same time encourage some persons, contrary to public policy, to ignore the parking meter with the intention of getting a ticket so they could, with payment of a nominal fine only, have a chance at a much larger prize. All essential elements of a lottery, prize, chance, and consideration are present in the transaction you describe, and it does not appear that the proposed transaction is within any statutorily allowable exception or exemption. It is my opinion, therefore, that a city which offers a monetary prize based upon a random drawing from a weekly pool of names of individuals who have paid parking meter fines promptly is conducting an unlawful lottery not authorized by the Legislature. Having concluded that consideration is present, and that the game is a lottery prohibited by MCL 750.372 et seq; MSA 28.604 et seq, it is unnecessary to consider your second question whether payment of the prize is an illegal gift of public funds. Frank J. Kelley Attorney General (1)
(2)
The McCauley-Traxler-Law-Bowman Act authorizing the state lottery, MCL 432.1 et seq; MSA 18.969(1) et seq, and the Traxler-McCauley-Law-Bowman Bingo Act, MCL 432.101 et seq; MSA 18.969(101) et seq.(3)
Game promotions (without consideration), MCL 750.372a; MSA 28.604(1), and savings promotion raffles, MCL 750.376a; MSA 28.608(1).(4)
See also, MCL 750.301 et seq; MSA 28.533 et seq, for other gambling law provisions which do not rise to the severity of a lottery violation; and People v Reilly, supra.
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