STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6392

October 7, 1986

LOTTERIES:

Business of acting as agent for purchase of Lotto tickets for out-of-state players

A Michigan resident may not engage in the business of acting as an agent for prospective out-of-state Lotto players by purchasing Lotto tickets from authorized state agents for and on behalf of such out-of-state players and charging a fee for such service.

Honorable David M. Gubow

State Representative

The Capitol

Lansing, Michigan 48909

You have requested my opinion on a question which may be stated as follows:

The Michigan Bureau of Lottery currently makes Lotto tickets available to interested purchasers through two separate mechanisms: such tickets may be purchased either in person from a licensed state lottery sales agent, or by mail subscription directly from the Bureau of Lottery. However, as a result of federal statutes prohibiting the use of the United States mail to send lottery materials across state lines, direct mail subscriptions are available only to individuals possessing a Michigan address. See, 62 Stat 762 (1948), 18 USC 1302 and 88 Stat 1916 (1975), 18 USC 1307(b)(1). Thus, neither of these two sales mechanisms is readily available to out-of-state residents.

The business enterprise described in your question represents an attempt to develop this out-of-state "market." The in-state businessman, acting as an agent for the out-of-state purchaser, would purchase one or more Lotto tickets from a licensed state lottery sales agent. In those instances where the ticket proved to be a winning ticket, arrangements would be made to either forward the prize money to the out-of-state resident or notify that individual to travel to Michigan and claim the prize in person. The in-state businessman would charge a fee for his or her services over and above the actual cost of purchasing the actual Lotto tickets.

Although your letter suggests that some of these transactions might be conducted by mail, such use of the mail to conduct state lottery transactions across state lines is prohibited by 18 USC 1302, supra. All communications and money transfers between the non-resident and the in-state agent could, presumably, be conducted in person or through some medium other than the United States postal system.

Your question is whether such transactions are permissible under existing Michigan law.

The Michigan Penal Code, MCL 750.372; MSA 28.604, provides in pertinent part:

Similarly, the Michigan Penal Code, MCL 750.373; MSA 28.605, provides:

Const 1963, art 4, Sec. 41, as ratified by the people in November, 1963, prohibited the Legislature from authorizing any lottery or permitting the sale of lottery tickets. The people amended Const 1963, art 4, Sec. 41, on May 16, 1972 to empower the Legislature to "authorize lotteries and permit the sale of lottery tickets in the manner provided by law." (Emphasis added.) Pursuant to this authorization, the Legislature enacted the McCauley-Traxler-Law-Bowman Lottery Act, MCL 432.1 et seq; MSA 18.969(1) et seq, providing for the establishment and operation of a state owned and operated lottery, subject to stringent controls and restrictions. MCL 432.37; MSA 18.969(37), exempts the sale of state lottery tickets or shares from the above referenced provisions of the Michigan Penal Code, providing as follows:

This provision, by its terms, exempts lottery activities from the prohibitions contained in the Michigan Penal Code only to the extent that such activities are authorized by and "performed pursuant to" the express provisions of the McCauley-Traxler-Law-Bowman Lottery Act. See, e.g., Miller v. Radikopf, 51 Mich App 393; 214 NW2d 897 (1974), rev on other grds, 394 Mich 83; 228 NW2d 386 (1975).

A review of the McCauley-Traxler-Law-Bowman Lottery Act reveals no provision expressly authorizing the business activity identified in your question. To the contrary, several provisions of that Act indicate that the Legislature did not intend to authorize such third-party lottery transactions. For example, MCL 432.27(1); MSA 18.969(27)(1), provides:

This provision prohibits the sale of lottery tickets at a price higher than that fixed by the Commissioner and, further, absolutely prohibits ticket sales by any person other than a licensed lottery sales agent. The final sentence of this provision, exempting gifts of lottery tickets, is of particular significance and indicates a clear legislative intent that the prohibition against sales by persons who are not licensed agents is to be read broadly. The fact that the Legislature expressly excluded gift transactions from the prohibition set forth in Sec. 27(1) demonstrates that the Legislature viewed this prohibition as being sufficiently broad so as to include even gifts had they not been expressly excluded by that final sentence. If third-party transfers in the form of gifts would be barred in the absence of the express exemption in Sec. 27(1), certainly for-profit third-party transfers would also be barred.

This conclusion is further supported by application of the well-established maxim of statutory construction known as the expressio unius est exclusio alterius, i.e., that express mention in a statute of one thing implies the exclusion of other similar things. See, e.g., Stowers v Wolodzko, 386 Mich 119, 133; 191 NW2d 355 (1971). The fact that the Legislature expressly exempted third-party transfers of lottery tickets which take the form of a gift, but did not expressly exempt for-profit third-party transfers such as that proposed here, manifests the legislative intent that the latter type of transaction not be permitted.

This construction, moreover, is consistent with other provisions of the McCauley-Traxler-Law-Bowman Lottery Act. For example, MCL 432.25; MSA 18.969(25), provides that the right of any person to a prize is not assignable, except where the prize winner is deceased or where an appropriate court order has been entered. MCL 432.23; MSA 18.969(23), sets forth the requirements for the licensing of specific individuals or business enterprises as lottery agents. Among other things, that section provides that a license as an agent to sell lottery tickets "shall not be issued to any person to engage in business exclusively as a lottery sales agent." Where a person has obtained a license, that person may sell lottery tickets "only on the premises stated in the license of the agent."

In short, a review of the McCauley-Traxler-Law-Bowman Lottery Act discloses no provisions which expressly authorize the type of for-profit third-party transactions described in your question. Relying upon the standard employed in State, ex rel Schillberg v. Safeway Stores, Inc, 450 P2d 949, 953 (Wash, 1969), and Mobil Oil Corp v. Danforth, 455 SW3d 505, 509 (Mo, En Banc, 1970), and looking into, through, and around the business enterprise you have described, it is clear that the "businessman" would be an unlicensed person selling lottery tickets to persons residing in other states. Because such third-party sales are not expressly authorized by the McCauley-Traxler-Law-Bowman Lottery Act, they remain within the prohibition set forth in MCL 750.372; MSA 28.604, and MCL 750.373; MSA 28.605.

It is my opinion, therefore, that a Michigan resident may not engage in the business of acting as an agent for prospective out-of-state Lotto players by purchasing Lotto tickets from authorized state agents for and on behalf of such out-of-state players and charging a fee for such services.

Frank J. Kelley

Attorney General