602 S.W.3d 459
Tex.2020Background
- Texas Constitution bars lotteries; Penal Code criminalizes most gambling devices; a lottery requires consideration, chance, and a prize.
- In 1993 the legislature enacted the "fuzzy-animal exclusion" excluding from the gambling-device definition coin‑op amusement machines that (1) are solely for bona fide amusement, (2) award only noncash merchandise/novelties or representations of value for those items, and (3) cap a single‑play reward at the lesser of $5 or ten times the play price.
- Chapter 2153 (Occupations Code) licenses, taxes, records, and otherwise regulates skill/pleasure coin‑operated machines, but §2153.003 provides the chapter "does not authorize or permit" machines prohibited by the Texas Constitution or Penal Code.
- Fort Worth enacted zoning and licensing ordinances restricting "game rooms" and amusement redemption machines; Operators (Rylie et al.) run eight‑liners, concede their machines are gambling devices but say they fall within the fuzzy‑animal exclusion.
- Operators sued, claiming chapter 2153 preempts the city ordinances; trial court found partial conflict preemption and upheld the exclusion; the court of appeals held the machines’ legality is irrelevant to preemption and partially preempted certain local provisions.
- The Texas Supreme Court held the court of appeals erred: whether chapter 2153 applies depends on whether the machines are unconstitutional/illegal, and that question must be decided first by the court of appeals (case remanded).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does chapter 2153 apply to coin‑op machines even if they are unconstitutional or illegal? | Chapter 2153 applies regardless; §2153.003 merely clarifies it does not "legalize" illegal machines. | §2153.003 means the chapter does not authorize or permit unconstitutional/illegal machines, so it does not apply. | Court: §2153.003 excludes unconstitutional/illegal machines from chapter 2153; chapter does not apply if machines are unlawful. |
| Is the constitutionality/legality of the eight‑liners relevant and justiciable for the preemption analysis? | Irrelevant; chapter 2153 regulates and taxes machines whether or not they are illegal. | Relevant and justiciable because if machines are illegal, chapter 2153 does not apply and cannot preempt local law. | Court: Relevant and justiciable; court of appeals erred to treat it as non‑justiciable; remand to decide legality. |
| Does chapter 2153 completely preempt Fort Worth’s ordinances? | Complete preemption: chapter provides comprehensive, uniform statewide regulation. | No complete preemption; at most limited/partial preemption and none if machines are illegal. | Court: Left undecided—preemption depends on whether machines are lawful; remanded to resolve that threshold issue. |
| Is the fuzzy‑animal exclusion constitutional? | Operators: exclusion valid and brings machines within statute. | City: exclusion unconstitutional because it authorizes lotteries contrary to the Constitution. | Court: Did not decide; remanded for the court of appeals to decide constitutionality/legality in the first instance. |
Key Cases Cited
- City of Wink v. Griffith Amusement Co., 100 S.W.2d 695 (Tex. 1936) (traditional test for lottery: consideration, chance, prize)
- Randle v. State, 42 Tex. 580 (Tex. 1875) (early definition of lottery)
- Fed. Commc’ns Comm’n v. Am. Broad. Co., 347 U.S. 284 (U.S. 1954) (use of lottery tests in related context)
- Hardy v. State, 102 S.W.3d 123 (Tex. 2003) (discussion of eight‑liners and fuzzy‑animal exclusion)
- State v. $1,760.00 in U.S. Currency, 406 S.W.3d 177 (Tex. 2013) (holding certain eight‑liners fell outside the exclusion)
- Barshop v. Medina Cty. Underground Water Conservation Dist., 925 S.W.2d 618 (Tex. 1996) (statutory construction to avoid constitutional infirmities)
- Combs v. Health Care Servs. Corp., 401 S.W.3d 623 (Tex. 2013) (standard for avoiding absurd statutory constructions)
- Ferguson v. Wilcox, 28 S.W.2d 526 (Tex. 1930) (constitution prevails over contrary legislative action)
- Pidgeon v. Turner, 538 S.W.3d 73 (Tex. 2017) (remand to court of appeals to decide issues in first instance)