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

MIKE COX, ATTORNEY GENERAL

CONST 1963, ART 4, � 41:

LOTTERY:

 Impact of amendments to Const 1963, art 4, � 41 on Bureau of State Lottery operations

The voter-approval requirement of Const 1963, art 4, � 41 does not apply to games that the Commissioner of the Bureau of State Lottery may authorize pursuant to the authority conferred under the existing provisions of the Traxler-McCauley-Law-Bowman Bingo Act, MCL 432.101 et seq.

Opinion No. 7190

March 15, 2006

Commissioner Gary C. Peters
Bureau of State Lottery
101 E. Hillsdale
Lansing, MI 48909

You have asked whether the voter-approval requirement of the recent amendment to Const 1963, art 4, � 41 applies to games that the Commissioner of the Bureau of State Lottery may authorize pursuant to authority granted in existing provisions of the Traxler-McCauley-Law-Bowman Bingo Act (Bingo Act), MCL 432.101 et seq.

Michigan voters ratified the recent amendment of art 4, � 41 by approving Proposal 04-1 on November 2, 2004. Before this amendment, art 4, � 41 stated: "The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law." The passage of Proposal 04-1 added two sentences to that section, so that art 4, � 41 now provides:

The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law. No law enacted after January 1, 2004, that authorizes any form of gambling shall be effective, nor after January 1, 2004, shall any new state lottery games utilizing table games or player operated mechanical or electronic devices be established, without the approval of a majority of electors voting in a statewide general election and a majority of electors voting in the township or city where gambling will take place. This section shall not apply to gambling in up to three casinos in the City of Detroit or to Indian tribal gaming.

In determining the meaning of a constitutional provision, courts apply the rule of "'common understanding.'" Wayne County v Hathcock, 471 Mich 445, 468; 684 NW2d 765 (2004). "The primary objective in interpreting a constitutional provision is to determine the text�s original meaning to the ratifiers, the people, at the time of ratification." Id. The first step in this analysis is determining whether the words of the constitutional provision "have a plain meaning." Silver Creek Drain Dist v Extrusions Div, Inc, 468 Mich 367, 375; 663 NW2d 436 (2003). If the words at issue have a plain meaning, that meaning is applied. Id. However,

"[I]f a constitutional phrase is a technical legal term or a phrase of art in the law, the phrase will be given the meaning that those sophisticated in the law understood at the time of enactment unless it is clear from the constitutional language that some other meaning was intended." [WPW Acquisition Co v City of Troy, 466 Mich 117, 123; 643 NW2d 564 (2002), quoting Michigan Coalition of State Employee Unions v Civil Service Comm, 465 Mich 212, 223; 634 NW2d 692 (2001).]

Another rule of constitutional construction holds that the circumstances surrounding the adoption of the provision and the purpose sought to be accomplished may be considered. Soap & Detergent Ass'n v Natural Resources Comm, 415 Mich 728, 745; 330 NW2d 346 (1982).

Your question concerns the Commissioner's authority under existing law.1  It does not invoke the restrictions against new laws enacted to authorize "any form of gambling," but rather it involves the restrictions imposed by the constitutional amendment on "any new state lottery games utilizing table games or player operated mechanical or electrical devices." The threshold issue is thus whether games that the Commissioner of the Bureau of State Lottery may authorize pursuant to the Bingo Act constitute "state lottery games" as that phrase is used in art 4, � 41. If these games are not "state lottery games," the Commissioner may authorize them without voter approval.

Until 1972, Const 1963, art 4, � 41 prohibited the Legislature from authorizing lotteries: "The legislature shall not authorize any lottery nor permit the sale of lottery tickets."2  Many years before the voters ratified the 1963 Constitution, the Michigan Supreme Court had defined a "lottery" as an activity involving the elements of chance, prize, and consideration. See People v Welch, 269 Mich 449, 452; 257 NW 859 (1934). Because the term "lottery" in art 4, � 41 was not limited to any particular type of lottery, this provision prevented legislative authorization of private lotteries as well as state-operated lotteries. In 1972, however, the voters approved a constitutional amendment that lifted the prohibition on legislative authorization of lotteries, such that Const 1963, art 4, � 41 thereafter read: "The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law." Accordingly, with the 1972 amendment came the authority for the Legislature to authorize both state-operated and private lotteries.

The Legislature responded to this grant of authority by enacting the McCauley-Traxler-Law-Bowman-McNeely Lottery Act (Lottery Act), MCL 432.1 et seq, and the Bingo Act. In the Lottery Act, the Legislature mandated that a state-operated lottery be established: "The commissioner [of the Bureau of State Lottery] shall initiate, establish, and operate a state lottery at the earliest feasible and practicable time." MCL 432.9(1). The Legislature also stated in what was then MCL 432.3(c) that "[l]ottery" or "state lottery," as used in the act, meant "the lottery created and operated pursuant to this act." In 1996, the Legislature clarified this definition: "'Lottery' or 'state lottery' means the lottery created pursuant to this act and operated exclusively by or under the exclusive control of the bureau of state lottery." MCL 432.3(d). From the outset, the Legislature afforded the Commissioner broad authority to promulgate rules concerning the type of lottery that the Bureau of State Lottery would conduct,3 the price of lottery tickets, the number and size of prizes, the manner of selecting winners, and the frequency of selecting winning tickets. MCL 432.11(2)(a), (b), (c), (d), and (f).

In the Bingo Act, the Legislature authorized certain organizations, under specified conditions, to conduct games of chance such as bingo, raffles, numeral games,4  and "millionaire party"5 games for consideration. See, e.g., MCL 432.102(4), MCL 432.104a, and MCL 432.107a. These games, as conducted pursuant to the Bingo Act, constitute lotteries under the common law, given that the elements of chance, prize, and consideration are present. See Welch, 269 Mich at 452. Until 1972, in addition to the constitutional prohibition, lotteries were subject to criminal penalties by statute, even if conducted by charitable organizations. See MCL 750.372. For example, in a pre-Bingo Act case, Society of Good Neighbors v Mayor of Detroit, 324 Mich 22, 25-26; 36 NW2d 308 (1949), the Court stated that the plaintiff in that case, a private charitable organization, could not host bingo games as fundraisers because bingo, just like the "beano," "keno," and "lotto" games condemned in Welch, constituted a lottery prohibited by MCL 750.372. By enacting the Bingo Act, the Legislature carved out an exception to the criminal prohibition against lotteries in MCL 750.372 for certain organizations under certain conditions. See MCL 432.119.

The Legislature placed the responsibility of administering the Bingo Act with the Commissioner of the Bureau of State Lottery. MCL 432.112; Daniels v Bureau of State Lottery, 98 Mich App 628, 630; 296 NW2d 324 (1980). See also MCL 432.113 (directing the Commissioner to promulgate rules under the Bingo Act concerning activities permitted by the Bingo Act). For example, the Commissioner decides what games organizations may offer as "millionaire party" games. 2000 MR 3, R 432.21406.

In assigning this responsibility for administrative oversight, the Legislature used certain definitions in the Bingo Act that are identical to those used in the Lottery Act. For example, the Bingo Act defines "[b]ureau" as "the bureau of state lottery as created by the . . . lottery act," MCL 432.102(3), and "[c]ommissioner" as the "commissioner of state lottery as defined by section 3 of the . . . lottery act," MCL 432.102(6). The Bingo Act does not define "state lottery." The term "state lottery" is utilized in the Bingo Act solely to identify the state officer responsible for administering the act's provisions. Neither the Bingo Act nor the Lottery Act uses "state lottery" to refer to a lottery operated by an organization pursuant to authority grounded in the provisions of the Bingo Act.

The Bingo Act makes it clear that games conducted pursuant to its terms are neither operated by nor under the exclusive control of the Bureau of State Lottery. For example, the organization conducting the game must bear the cost of prizes, MCL 432.107a(6) and MCL 432.109(b), and must devote the net proceeds of the activity to the organization's lawful purposes, MCL 432.109. Moreover, under certain conditions, the Bingo Act permits senior citizens' groups or homes to conduct bingo without even obtaining a license from the Bureau of State Lottery. MCL 432.105a. Similarly, certain organizations, under specified conditions, may conduct a raffle without obtaining a license. MCL 432.105d.

The definition of "state lottery" provided in the Lottery Act comports with the common understanding of "state lottery" at the time the ratifiers voted on Proposal 04-1. Not only had the phrase "state lottery" been used as defined above for many years when the voters considered its use in the proposed amendment to Const 1963, art 4, � 41, the plain language of the term supports the conclusion that "state lottery games" are games operated by the Bureau of State Lottery. When "state" is used as an adjective, as it is in the term "state lottery," the applicable meaning of the term is "[o]wned and operated by a state." American Heritage College Dictionary, 3rd Edition (2000). Consequently, the plain meaning of "state lottery" in art 4, � 41 is the lottery owned and operated by the State of Michigan. The term "state lottery games," therefore, does not encompass the games operated by various organizations pursuant to the Bingo Act.

It is my opinion, therefore, that the voter-approval requirement of Const 1963, art 4, � 41 does not apply to games that the Commissioner of the Bureau of State Lottery may authorize pursuant to the authority conferred under the existing provisions of the Traxler-McCauley-Law-Bowman Bingo Act, MCL 432.101 et seq.

MIKE COX
Attorney General

 1The Bingo Act was last amended by 1999 PA 108, effective March 10, 2000.

2 Similar prohibitions were found in Const 1835, art 12, � 6, Const 1850, art 4, � 27, and Const 1908, art 5, � 33.

3 The Legislature prohibited the Commissioner from conducting a lottery based on an activity that uses "the mechanical, physical, or mental skills of the participant and that is traditionally regarded as a sporting event."  MCL 432.9(2).

 4 A "numeral game" is "the random resale of a series of numeral game tickets [as defined in MCL 432.103a(10)] by a qualified organization under a numeral game license or in conjunction with a licensed millionaire party or large raffle."  MCL 432.103a(9).

 5 A "millionaire party" is "an event at which wagers are placed upon games of chance customarily associated with a gambling casino through the use of imitation money or chips."  MCL 432.103a(8).