Is a charity casino-night fundraiser with real betting legal in Texas?

Plain-English summary

A Texas legislator asked whether a popular kind of charity event, "casino night," was legal under the state gambling laws. The event he described worked like this: patrons paid for admission by the table, got a stash of casino chips (and could buy more during the night), played casino games, and at the end of the night used their chips to "purchase" prizes donated by local merchants.

The Attorney General said that the people playing the games were committing the crime of gambling. Texas defines a gambling offense by three elements, consideration, chance, and prize, and the described event had all three. Paying for admission and buying chips was the consideration. The casino games turned on chance. The chips kept until the end of the night, and the donated merchandise they could buy, were the prize. Under Penal Code section 47.02, a person commits an offense by making a bet, and a "bet" is an agreement that, depending on chance, you stand to win or lose something of value. Playing for chips that convert to prizes fit that definition.

The opinion then walked through the possible escape hatches and closed most of them. There is a defense for gambling in a "private place," but the event was open to the general public at the Plano Civic Center, so that defense did not apply. The one door the opinion left open was a narrow exception in the definition of "bet" for "carnival contests," an offer of merchandise worth $25 or less by the proprietor of a bona fide carnival contest at a carnival sponsored by certain nonprofit groups. The legislator had not described the event as a "carnival" or the games as "carnival contests," and whether they would qualify was a fact question the opinion could not answer on the information it had.

Currency note

This opinion was issued in 1992. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Texas later amended its constitution and statutes to authorize regulated charitable raffles and bingo, so the rules for nonprofit fundraising have changed since 1992; confirm the current law before relying on this opinion.

Background and statutory framework

The opinion started with the gambling offense itself. Penal Code section 47.02(a) makes it an offense to make a bet on the result of a game or contest, or to play and bet for money or other thing of value at any game played with cards, dice, or balls. "Bet" is defined in section 47.01(1) as an agreement that, dependent on chance even though accompanied by some skill, one stands to win or lose something of value. The opinion concluded that participants in the described event would be making bets within that definition.

The three-element framing came from an earlier opinion. Attorney General Opinion JM-412 (1985), considering a "casino night" sponsored by a school district, stated that in Texas three basic elements comprise the offense of gambling: consideration, chance, and prize. See also Odle v. State, 139 Tex. Crim. 288, 139 S.W.2d 595 (1940), overruled on other grounds, Green v. State, 578 S.W.2d 411, 413 n.1 (Tex. Crim. App. [Panel Op.] 1979); Ellis v. State, 80 Tex. Crim. 208, 209, 189 S.W. 1074, 1075 (1916). The fund-raising event satisfied all three: the admission fee and the money paid for chips were consideration, the casino games involved chance, and the chips and the donated merchandise were prizes.

The opinion then addressed the statutory defenses in section 47.02(b), which include gambling in a "private place" where no one receives an economic benefit other than personal winnings and the odds are the same for all players. "Private place" is defined in section 47.01(7) as a place to which the public does not have access. Because the event was to be held at the Plano Civic Center with general public access, it did not fall within that defense. See, e.g., Cole v. State, 28 Tex. App. 536, 13 S.W. 859 (1890) (schoolhouse a public place even while the building was not being used for school purposes).

Finally, the opinion identified the one exception that might apply. Section 47.01(1) excludes from the definition of "bet" an offer of merchandise worth no more than $25 made by the proprietor of a bona fide carnival contest conducted at a carnival sponsored by a nonprofit religious, fraternal, school, law enforcement, youth, agricultural, or civic group, subsections (C) and (D). The legislator had not characterized the event as a carnival or the games as carnival contests, and whether they would qualify within the meaning of that exception would require consideration of facts the opinion did not have. A footnote referenced a dictionary definition of "carnival" and the licensing requirements for "circuses, carnivals, and zoos" in Health & Safety Code chapter 824, including the section 824.001(4) definition of "carnival." Another footnote noted that, having resolved the matter on the betting prohibition, the opinion did not decide whether the event would implicate other chapter 47 provisions such as gambling promotion or keeping a gambling place.

Common questions

Was a charity casino night legal in Texas under this opinion?
Generally no. The opinion concluded that participants playing the casino games would be committing the Penal Code section 47.02 offense of gambling, because the event had all three elements of a gambling offense: consideration, chance, and prize.

Why did paying for chips and winning prizes count as gambling?
Because Texas defines a "bet" as an agreement that, depending on chance, you stand to win or lose something of value. Paying admission and buying chips was the consideration, the games turned on chance, and the chips and donated merchandise were the prize, so playing was "making a bet."

Did it matter that it was for charity, or that prizes came from local merchants?
Under this opinion, no. The fact that a nonprofit organized the event and merchants donated the prizes did not change the analysis. The opinion looked at the structure of the games, not the charitable purpose.

Was there any legal way to run the event as described?
The opinion left open one narrow path: if the casino games qualified as "carnival contests" under the section 47.01(1)(C) and (D) exception to the definition of "bet," involving merchandise worth $25 or less at a carnival sponsored by a qualifying nonprofit group. Whether the event met that definition was a fact question the opinion did not resolve.

Did the "private place" defense help?
No. The defense for gambling in a "private place" applies only where the public does not have access. The event was to be held at the Plano Civic Center with general public access, so the opinion concluded the defense did not apply.

Citations

• Penal Code §§ 47.01(1), 47.01(1)(C), 47.01(1)(D), 47.01(7), 47.02(a), 47.02(b)
• Penal Code §§ 47.03, 47.04, 47.06, 47.07
• Tex. Const. art. III, § 47
• Health & Safety Code ch. 824; id. § 824.001(4)
• Odle v. State, 139 Tex. Crim. 288, 139 S.W.2d 595 (1940), overruled on other grounds, Green v. State, 578 S.W.2d 411, 413 n.1 (Tex. Crim. App. [Panel Op.] 1979)
• Ellis v. State, 80 Tex. Crim. 208, 209, 189 S.W. 1074, 1075 (1916)
• Cole v. State, 28 Tex. App. 536, 13 S.W. 859 (1890)
• Tex. Att'y Gen. Ops. JM-412 (1985), JM-1267 (1990)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0112
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1992/dm0112.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

April 20, 1992

Honorable Ron Lewis
Chairman
Natural Resources Committee
Texas House of Representatives
P. O. Box 2910
Austin, Texas 78768-2910

Opinion No. DM-112

Re: The legality of "casino night" fundraising by nonprofit organizations (RQ-284)

Dear Representative Lewis:

You ask about the legality, under the gambling laws, of a charitable fund-raising event which you describe as follows:

Admission for the patrons of this event is paid for on a table by table basis. A main attraction at this event is a large room full of casino games. . . . [P]atrons would present a verification of their reservation for a table and then would be given a certain amount of chips (more of which could be purchased during the night). At the close of play, they would then enter a room where they could "purchase" prizes. These prizes would be donated by local merchants.

Section 47.02(a) of the Penal Code provides in part:

A person commits an offense if he:

   (1) makes a bet on the partial or final result of a game or contest or on the performance of a participant in a game or contest;

   . . . .

   (3) plays and bets for money or other thing of value at any game played with cards, dice, or balls. (Emphasis added.)

"Bet," for purposes of section 47.02, is defined as "an agreement that, dependent on chance even though accompanied by some skill, one stands to win or lose something of value." Penal Code § 47.01(1). In our opinion, those participating in the event you describe would be "making bets" within the section 47.01 definition of "bet" and the section 47.02 provisions making it an offense to "make[] a bet."

Attorney General Opinion JM-412 (1985), in considering the legality under sections 47.01 and 47.02 of a "casino night" sponsored by a school district, noted that "in Texas, three basic elements comprise the offense of gambling: consideration, chance, and prize." Attorney General Opinion JM-412 at 2; see also Odle v. State, 139 Tex. Crim. 288, 139 S.W.2d 595 (1940), overruled on other grounds, Green v. State, 578 S.W.2d 411, 413 n.1 (Tex. Crim. App. [Panel Op.] 1979); Ellis v. State, 80 Tex. Crim. 208, 209, 189 S.W. 1074, 1075 (1916, no writ). The fund raising event you ask about appears to satisfy this definition: the admission fee and any other sums paid for "chips" by participants would constitute "consideration," the "casino games" would presumably involve "chance,"[1] and the chips retained by participants at the close of play as well as the items donated by local merchants which the chips could be used to purchase would constitute "prizes."

We note that section 47.02(b) of the Penal Code provides that "it is a defense to prosecution under this section that:"

   (1) the actor engaged in gambling in a private place;

   (2) no person received any economic benefit other than personal winnings; and

   (3) except for the advantage of skill or luck, the risks of losing and the chances of winning were the same for all participants. (Emphasis added.)

"Private place" is defined in section 47.01(7) of the Penal Code, in part, as "a place to which the public does not have access." You say that the fund-raising event in question would be held at the Plano Civic Center. Your description indicates that the general public would have access. Accordingly, the event would not fall within the defense set out in section 47.02(b). See, e.g., Cole v. State, 28 Tex. App. 536, 13 S.W. 859 (1890) (schoolhouse a public place even while building not being used for school purposes).

We also note that in defining "bet," section 47.01(1) of the Penal Code provides that

[a] bet does not include:

. . . .

   (C) an offer of merchandise, with a value not greater than $25, made by the proprietor of a bona fide carnival contest conducted at a carnival sponsored by a nonprofit religious, fraternal, school, law enforcement, youth, agricultural, or civic group, if the person to receive the merchandise from the proprietor is the person who performs the carnival contest; or

   (D) an offer of merchandise, with a value not greater than $25, made by the proprietor of a bona fide carnival contest conducted at a carnival sponsored by a nonprofit agricultural or civic group incorporated by the State of Texas prior to 1955. (Emphasis added.)

You have not characterized the event you ask about as a "carnival" or the casino games to be played there as "carnival contests." Determining whether the event would qualify as a "carnival," or the games as "carnival contests," within the meaning of the section 47.01(1) exception to the definition of "bet," would require consideration of facts which we do not have before us.[2] See WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY 208, 209 (1987) (defining "carnival" as, inter alia, "an organized program of entertainment or exhibition"). But see Health & Safety Code ch. 824 (providing licensing requirements for "circuses, carnivals, and zoos"); id. § 824.001(4) (defining "carnival" as "a commercial variety show featuring animal acts for public entertainment").

                                    SUMMARY

        Those participating in "casino games" at the described nonprofit charitable organization fund-raising event would violate the Penal Code section 47.02 prohibition on gambling, "making bets," unless, as a matter of fact, the "casino games" in question fall within a "carnival contests" exception to the definition of "bet" in the Penal Code section 47.01(1)(C) and (D).

                                                      Very truly yours,

                                                      DAN MORALES
                                                      Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by William Walker
Assistant Attorney General

[1] We note that a recent attorney general opinion concluded that in order to come within the state constitution's restrictions on "lotteries," see Tex. Const. art. III, § 47, the "chance" element of a game must predominate over the element of skill. See Attorney General Opinion JM-1267 (1990) (and authorities cited therein). The opinion noted, however, that the chapter 47 Penal Code prohibitions on gambling are broader than the constitutional restrictions on "lotteries" and that they "effectively prohibit those types of games typically conducted in gambling casinos." See also Searcy & Patterson, Practice Commentary, Tex. Penal Code § 47.02 (Vernon 1973).

[2] Having determined that, unless the "carnival contest" exemptions to the definition of "bet" apply, those participating in the casino games at the event you ask about would violate the section 47.02 prohibition on gambling "making bets," we do not think it necessary to determine here whether or to what extent the event would implicate other chapter 47 penal provisions. See Penal Code §§ 47.03 (gambling promotion), 47.04 (keeping a gambling place), 47.06-47.07 (possession of gambling device, equipment, or paraphernalia).