Untitled Texas Attorney General Opinion
GA-0950
| Tex. Att'y Gen. | Jul 2, 2012Background
- Attorney General opinion on Texas Lottery Commission authority to use the Internet for second-chance drawings and for Internet-based games of chance; focuses on Texas Government Code ch. 466 and 467, governing the Lottery Act; recognizes Commission as an administrative agency with powers limited to express or implied powers; analyzes federal laws UIGEA and the Wire Act and state Penal Code; concludes Internet use is not prohibited by law; cites Commission procedures for second-chance drawings tied to losing scratch-off tickets; notes potential authority under broadly construed rules to promote and operate the lottery.
- Questioned authority for second-chance drawings via the Internet and for any Internet-based games; examines whether the Commission’s powers extend to Internet promotions and other gambling activities.
- The Commission has broad express and implied authority under the State Lottery Act (ch. 466/467) to administer the lottery, adopt rules, and promote the lottery, including Internet activities for second-chance drawings; UIGEA does not render Internet gambling unlawful for Texas-lottery activities; Wire Act is not a per se prohibition and applies to gambling on sporting events, not this context; Penal Code does not criminalize lawful lottery activities conducted over the Internet; no statutory prohibition on Internet second-chance drawings is found.
- Conclusion: It is likely the Texas Lottery Commission has authority to utilize the Internet for promotional second-chance drawings for losing tickets.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Commission may conduct Internet-based second-chance drawings. | Nelson argues for explicit/implicit limits on Internet use. | Abbott/Hodge argue broad authority under ch. 466 to promote/operate the lottery. | Likely that authority exists. |
| Whether the Commission may conduct other Internet-based games of chance. | Concern about broader Internet gambling. | Powers extend to promotional activities related to the lottery; no statutory prohibition on Internet use for such activities. | Not prohibited; likely authority exists within broad Lottery Act powers. |
| Do UIGEA or the Wire Act bar the Commission’s Internet activities? | Federal statutes may prohibit online gambling. | UIGEA does not ban lawful state lottery Internet use; Wire Act applies to sports wagering, not general lottery activities. | Neither statute bars the Commission’s Internet use for its lottery activities. |
| Does Texas Penal Code prohibit Internet-based lottery activities? | Internet activity could trigger criminal penalties for gambling. | Participation in the state lottery is a defense to gambling proscribed by the Penal Code; no prohibition on Internet lottery activities is found. | No prohibition found; Internet use permissible. |
Key Cases Cited
- Pub. Util. Comm'n of Tex. v. City Publ. Serv. Ed. of San Antonio, 53 S.W.3d 310 (Tex. 2001) (agency powers are limited to express and implied powers reasonably necessary to fulfill its duties)
- In re MasterCard Int'l Inc., 313 F.3d 257 (5th Cir. 2002) (Wire Act interpretation; applies to gambling on sporting events; Internet gambling not per se prohibited)
- Rousso v. Wash., 204 P.3d 243 (Wash. Ct. App. 2009) (UIGEA/Internet gambling context; UIGEA does not itself criminalize transmission of gambling information; lottery activities may be lawful)
- Pruett v. Harris Cnty. Bail Bond Bd., 249 S.W.3d 447 (Tex. 2008) (analysis of whether agency rulemaking exceeds statutory grant; rule must harmonize with statute)