Can the Texas Legislature allow county video-lottery gaming districts without amending the constitution?

TX AG Opinion GA-0358: Can the legislature create county video-lottery gaming districts without a constitutional amendment?

Plain-English summary

During the 2005 legislative session, a bill called Senate Bill 1326 proposed a new way to expand gambling in Texas. It would have added a chapter to the Local Government Code letting any county hold a local-option election to create a "county gaming district." If a county's voters approved, licensed retailers in that county could operate video lottery games (video lottery terminals) under rules set by the Texas Lottery Commission. The bill did not pass, and Senator Jane Nelson asked the Attorney General whether it could have taken effect without first amending the Texas Constitution.

The Attorney General said it could not. The Texas Constitution, in article III, section 47, directs the legislature to pass laws prohibiting lotteries, and it carves out only the specific exceptions the voters have approved over the years: bingo and charitable raffles by certain organizations (added in the 1980s), and a 1991 amendment that allows the state itself to operate lotteries or contract with entities to do so. A 2003 opinion (GA-0103) had already explained that a "lottery" under the constitution is any game combining prize, chance, and consideration, and that running video lottery terminals is not authorized by the 1991 amendment.

From there the conclusion followed directly. Two settled principles govern: the legislature cannot authorize an action that the constitution prohibits, and the legislature cannot delegate authority that it does not itself possess. Because the constitution does not permit the operation of video lottery terminals, the legislature could not authorize them by statute, and it could not pass the problem down to individual counties through local-option elections either. So the county gaming district scheme in Senate Bill 1326 would have required a constitutional amendment to be valid.

Currency note

This opinion was issued in 2005. 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.

Who this opinion affected (as of 2005)

Legislators and the state: The opinion told the legislature that it could not legalize a county-by-county video lottery by ordinary statute; doing so would require a constitutional amendment submitted to the voters under article III, section 47.

Counties and commissioners courts: It meant the local-option elections and county gaming districts contemplated by Senate Bill 1326 had no constitutional footing, because the legislature could not delegate to counties a power it did not have.

Would-be gaming operators and the Texas Lottery Commission: It confirmed that the Commission could not have administered video lottery games under the proposed chapter, since video lottery terminals were not authorized by the 1991 state-lottery amendment.

Journalists and the public following gambling-expansion debates: It explained why proposals to bring video lottery terminals to Texas have historically been framed as constitutional amendments rather than ordinary bills.

Common questions

Can the Texas Legislature legalize video lottery terminals by statute alone?
No. According to this opinion, the constitution's lottery ban (article III, section 47) blocks it, and the existing state-lottery amendment does not reach video lottery terminals, so a constitutional amendment would be required.

What did Senate Bill 1326 try to do?
It would have added chapter 328 to the Local Government Code to let counties hold local-option elections creating "gaming districts," where licensed retailers could operate video lottery games run on behalf of the state by the Texas Lottery Commission.

Why can't the legislature just let each county decide?
Because the legislature cannot delegate authority it does not have. Since the constitution does not permit video lottery terminals, the legislature could not hand counties the power to permit them through local-option elections.

What counts as a "lottery" under the Texas Constitution?
Drawing on Attorney General Opinion GA-0103, this opinion treated a "lottery" as any game that contains the elements of prize, chance, and consideration.

What would it take to allow a video lottery in Texas?
A constitutional amendment. The opinion concluded the legislature may not authorize county gaming districts to administer a video lottery without one.

Background and statutory framework

Article III, section 47(a) of the Texas Constitution requires the legislature to pass laws prohibiting lotteries and gift enterprises (Tex. Const. art. III, § 47(a)). Over time the voters approved narrow exceptions: amendments in the 1980s permitting bingo and charitable raffles by specified religious and nonprofit organizations, and a 1991 amendment authorizing the state to operate lotteries or to contract with entities to operate them on the state's behalf (Tex. Const. art. III, § 47(b)-(d), (e)). A prior opinion had construed "lottery" to mean any game with the elements of prize, chance, and consideration, and had concluded that the 1991 amendment does not authorize video lottery terminals (Tex. Att'y Gen. Op. No. GA-0103 (2003)).

Senate Bill 1326 of the 79th Legislature proposed adding chapter 328 to the Local Government Code. It would have let a commissioners court call an election on creating a county gaming district to permit video lottery games, defined video lottery and video lottery games, and provided for the Texas Lottery Commission to license video lottery retailers and regulate the conduct of games, licensing, and the division of proceeds (Tex. S.B. 1326, 79th Leg., R.S. (2005), proposed Local Government Code §§ 328.001, 328.051, 328.101, 328.104-.105, 328.151, 328.153-.154).

Two principles resolved the question. The legislature may not authorize an action that the constitution prohibits, and it may not delegate authority it does not possess (Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 381 (Tex. 2002); Maher v. Lasater, 354 S.W.2d 923, 925 (Tex. 1962); City of Amarillo v. Tutor, 267 S.W. 697, 699 (Tex. 1924)). Because the operation of video lottery terminals is not allowed by article III, section 47(e), the opinion concluded the legislature may not, absent a constitutional amendment, authorize the creation of county gaming districts on a local-option basis that would let the Commission administer a video lottery.

Citations

Constitutional provisions:

• Tex. Const. art. III, § 47(a)
• Tex. Const. art. III, § 47(b)-(d)
• Tex. Const. art. III, § 47(e)

Proposed legislation:

• Tex. S.B. 1326, 79th Leg., R.S. (2005) (proposed Local Government Code ch. 328; §§ 328.001, 328.051, 328.101, 328.104-.105, 328.151, 328.153-.154)

Cases:

• Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 381 (Tex. 2002)
• Maher v. Lasater, 354 S.W.2d 923, 925 (Tex. 1962)
• City of Amarillo v. Tutor, 267 S.W. 697, 699 (Tex. 1924)

Other authorities:

• Tex. Att'y Gen. Op. No. GA-0103 (2003)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0358
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2005/ga0358.pdf

Original opinion text

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

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

September 20, 2005

The Honorable Jane Nelson, Chair
Committee on Health and Human Services
Texas State Senate
Post Office Box 12068
Austin, Texas 78711-2068

Opinion No. GA-0358

Re: Whether the legislature, in the absence of a constitutional amendment, may authorize the creation of county gaming districts on a local option basis to administer a state video lottery (RQ-0332-GA)

Dear Senator Nelson:

You ask whether a bill, proposed but not enacted during the regular session of the Seventy-ninth Legislature, would have been effective in the absence of a constitutional amendment.[1] Senate Bill 1326 sought, by adding chapter 328 to the Local Government Code, to authorize the creation of county gaming districts on a local option basis to administer a state video lottery. See Tex. S.B. 1326, 79th Leg., R.S. (2005).

Article III, section 47(a) of the Texas Constitution requires the legislature to "pass laws prohibiting lotteries and gift enterprises." TEX. CONST. art. III, § 47(a). In the 1980s the legislature proposed and the voters approved three amendments to article III, section 47 that permitted the operation of bingo games and charitable raffles by specific religious and nonprofit organizations. See id. § 47(b)-(d). In 1991 the electorate adopted an amendment that permits the legislature to "authorize the State to operate lotteries and [to] authorize the State to enter into a contract with one or more legal entities that will operate lotteries on behalf of the State." See id. § 47(e); Tex. Att'y Gen. Op. No. GA-0103 (2003) at 4-7.

In Attorney General Opinion GA-0103, this office was asked to determine "whether the Texas Legislature may authorize the operation of video lottery terminals without an amendment to the Texas Constitution." Tex. Att'y Gen. Op. No. GA-0103 (2003) at 2. The opinion first considered the historical meaning of the term "lottery" under article III, section 47(a) of the constitution. See TEX. CONST. art. III, § 47(a) (requiring the legislature to "pass laws prohibiting lotteries and gift enterprises"). On the basis of long-standing decisions of the Texas Supreme Court and the Texas Court of Criminal Appeals, the opinion found that any game that contains the elements of prize, chance, and consideration constitutes a "lottery."

Section 328.051 of the proposed legislation would have permitted the commissioners court of any county to "call an election on the question of creating a county gaming district in the county . . . to permit the conduct of video lottery games in the district." Tex. S.B. 1326, 79th Leg., R.S., § 1, sec. 328.051 (2005). Section 328.001 would have defined "video lottery" as "the conduct of video lottery games on behalf of this state as authorized under this chapter," and "video lottery game" as "any game of chance, including a game of chance in which the outcome may be partially determined by skill or ability, that for consideration may be played by an individual on an electronic machine or video display." Id. sec. 328.001(3)-(4). If the proposition to create a county gaming district were supported by a majority of the voters in the election, the district would be created. See id. sec. 328.051(d).

An individual or a company interested in obtaining a "video lottery retailer" license would apply to the Texas Lottery Commission (the "Commission"), which could by rule establish the minimum qualifications therefor. Id. sec. 328.101(a), (c). A person holding a video lottery retailer license would be authorized to "operate video lottery games in accordance with this chapter and commission rules at one location approved by the commission within the boundaries of each district." Id. sec. 328.101(b). The bill would also have established procedures for regulating the conduct of games, for issuing, suspending and revoking licenses, and for division of the proceeds realized from the operation of games. See id. secs. 328.104-.105, .151, .153-.154.

Senate Bill 1326, as we have indicated, would have authorized "a person that holds a license . . . [to] operate video lottery games in accordance with this chapter and [Lottery] [C]ommission rules." Id. sec. 328.101(b). The principal difference between the substance of the bill under consideration here and the facts presented in Attorney General Opinion GA-0103 is that, in the situation you pose, there was a specific bill detailing precisely the method by which a person would have been authorized to operate video lottery terminals, whereas in the latter we were considering the question in the abstract. Senate Bill 1326 basically would have authorized local option elections by which the voters in each county or precinct could approve the establishment of a gaming district and delegated to the various commissioners courts the power to initiate the process of permitting the operation of video lottery terminals.

It is well established that the legislature may not authorize an action that the Texas Constitution prohibits. Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Comp. Comm'n, 74 S.W.3d 377, 381 (Tex. 2002); Maher v. Lasater, 354 S.W.2d 923, 925 (Tex. 1962). Furthermore, the legislature is not empowered to delegate authority that it does not possess. City of Amarillo v. Tutor, 267 S.W. 697, 699 (Tex. 1924). Because the operation of video lottery terminals is not allowed by article III, section 47(e) of the Texas Constitution, we conclude that the legislature may not, absent a constitutional amendment, authorize the creation of county gaming districts on a local option basis that would then permit the Commission to administer a video lottery in those counties.

SUMMARY

The legislature may not, absent a constitutional amendment, authorize the creation of county gaming districts on a local option basis that would then permit the Texas Lottery Commission to administer a video lottery in those counties.

Very truly yours,

GREG ABBOTT
Attorney General of Texas

BARRY R. McBEE
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Rick Gilpin
Assistant Attorney General, Opinion Committee

Footnotes

[1] Letter from Honorable Jane Nelson, Chair, Senate Committee on Health and Human Services, to Honorable Greg Abbott, Texas Attorney General (Mar. 10, 2005) (on file with Opinion Committee, also available at http://www.oag.state.tx.us).