Ecumenical Ministries v. Oregon State Lottery Commission

4, Argued January reversed; Appeals and submitted decision the Court of judgment part of the circuit court affirmed in reversed and case remanded proceedings April to the circuit court for further reconsideration denied May 10, 1994 ECUMENICAL OREGON, MINISTRIES OF Atiyeh,

Victor G. Robert Straub, W. Pelett, Ryles, Vern Walter D. and James W. Knapp, Respondents Review, Petitioners on Review on / Clair VANDEHEY,

Plaintiff, v.

OREGON STATE LOTTERY COMMISSION and James J. Director, Davey, Lottery Respondents on Review, Review/Petitioners THE OREGON RESTAURANT ASSOCIATION

and Video Lottery Consultants, Inc., Intervenors-Respondents on Review/

Petitioners on Review. (CC 91C-11532; CA A72455; S40568) (Control), SC S40463, S40178 871 P2d 106 argued peti- Haselton, Rick Portland, T. the cause for review/respondents tioners on tries of on review Ecumenical Minis- Oregon, petition response al. et With him on the Lindsay, Weigler, was Hart, Neil & Portland. Reynolds, Attorney D.

Michael General, Salem, Assistant argued response respondents the cause and a filed on review/petitioners on review Commis- Deputy Attorney sion, et Balmer, al. Thomas A. General, petition. petition Salem, filed the With him on were Kulongoski, Attorney Virginia R. Theodore der, General, L. Lin- Special General, Solicitor Harchenko, Elizabeth S. Counsel, Salem. argued Tanzer, Ball, Novack, Portland,

Jacob Janik & intervenors-respondents review/petitioners the cause for petition on review. With him on the was Rochelle Lessner. Henry pro Kane filed an amicus brief se. curiae Grey, Hardy Myers, Boley Portland, & of Stoel Rives Jones Club, Inc., filed brief for amici curiae Multnomah Kennel Meadows, and The New Inc. Portland 553-a Van Carson, Justice, Gillette, Hoomis-

Before Chief Fadeley, Unis, Graber, Justices. sen, GRABER, J. part spe- concurring

Fadeley, opinion J., filed an concurring cially part. concurring specially opinion

Unis, J., filed an concurring part.

553-b 554

GRABER, J. In this we case, are called on to decide the constitu- of three tionality statutes relating operation — — State Lottery 461.215, 461.217, and 461.5461 under the present version of Article XV, 4, section Constitution. As Oregon originally adopted 1857, Article XV, 4, section provided:

“Lotteries, tickets, and the Lottery sale of any for pur- whatever, pose prohibited, are and the Legislative Assembly shall prevent by the same penal laws.”2 1976, the voters an amendment, which adopted had been submitted to them by the Legislative Assembly, excepting charitable, fraternal, and religious organizations from the lotteries in prohibition against XV, Article section 4. In 1984, 4, Article section was amended through the initiative process. here, As pertinent 4, now provides:

“(3) hereby There is created the Lottery State Commis- sion which shall establish and a operate Lottery. State All proceeds interest, from the Lottery, including State but excluding costs of administration and payment prizes, purpose creating jobs furthering shall be used for the development Oregon. economic “(4)(a) The State Commission shall be com- prised appointed by of five members the Governor and con- * * * * * firmed empowered the Senate *. The Commission is related to the promulgate procedures rules * * * operation Lottery. the Commission and the of the State “(d) Lottery] implement The Director the State shall [of rules, and under Lottery pursuant State operate * * * of the Commission. The State guidance, by the Commis- may operate any game procedure authorized sion, games and the racing, games, Social except parimutuel 1 discussion, pp post, challenged at statutes is set out The text of the 562-64. prohibition put of the constitution to extend the Motions forward drafters billiards, pins, games against species gambling” “all at ten to “all and to lotteries Proceedings Carey, Oregon and Debates of Constitution and and cards” failed. (1926). proceedings do not disclose Records of the Convention 367-68, 481. Id. at of the term “casino.” mention lotto, whereby prizes or Oregon bingo as commonly known among methods existing or future using any are distributed in that tickets or shares paid who have for persons adult that, utilizing computer in lottery games game; provided devices, currency shall ever be no coins or other or terminals computer such terminals directly players from dispensed devices. “(e) Fund created within General hereby There is continuously appro- which is Lottery Fund State administering operating purpose priated * ** Lottery. [T]he and the State Commission revenue-raising agency of a self-supporting operate shall state and sale of tickets or shares * * Lottery pay prizes shall all government *.The State the revenues it receives from all out of of its turn over the net public by Legisla- a fund be established therefrom to proceeds Legislative Assembly shall Assembly which the tive from of public purpose for the benefit of the make appropriations in Ore- furthering development economic creating jobs and revenues from the sale of the total annual gon. At least 84% to the public shall be returned lottery of all tickets or shares benefitting the public and net revenues prizes in the form of purpose.

“(7) no to author- Legislative Assembly power has The of in the State ize, operation casinos from prohibit, and shall Oregon.” Oregon Ministries of Ecumenical

In plaintiffs, declaratory for individuals, an action brought and various Oregon against relief injunctive judgment Director, alleging and the Commission by the initiation for and 461.217 (providing 461.215 and 461.5463 lottery games) video Commission gener- the revenues of some of distribution for the (providing XV, certain provisions violate games) ated those in challenge its ORS 461.546 purported to pleadings in case Although the (1) provision. only of that arguments pertained to subsection entirety, plaintiffs’ (2) provides: Subsection cities in agreement with intergovernmental county into an shall enter “The in cities.” gaming law enforcement purpose providing county for the 461.546(2) the issues funds, present not it does no allocates Because ORS (1). to ORS will refer We therefore by plaintiffs relation to subsection in raised 461.546(1) to that subsection. holding regard 461.546 to ORS in limit our that, when plaintiffs alleged imple- section 4. particular, 461.217 will result in the mented, ORS 461.215 and creation video that will “have the effect of “state-sponsored poker” ’’ casino in the State of violation creating gambling Oregon, 4(7), of Article of the state constitution. Plaintiffs 461.546(1) further that ORS the use of alleged “mandates] than net revenues of the for other Oregon Lottery purposes the constitutionally-mandated purpose creating jobs and “author- Oregon” economic furthering development that more than 16% of revenues be on expended izes] administration, enforcement,” costs of law including gaming 4(4) (e), of Article sections violation Constitution. Oregon and Video Lot- Restaurant Association Consultants, Inc., intervened in the action. Defendants

tery moved for on the pur- and intervenors judgment pleadings case Concluding presented suant to ORCP B.4 court,” issues to be resolved that a “motion “only legal appropriate procedural is the judgment pleadings of the case” and that the statutes do not device for disposition Constitution, the Oregon violate the relevant provisions motion. defendants’ and intervenors’ the trial court granted Plaintiffs appealed. banc, reversed the sitting

The Court of Appeals, for further trial court and remanded the case decision of the Lottery Ministries v. State Oregon Ecumenical proceedings. (1993). The Court Comm., 735, 849 P2d 532 App 118 Or “video are poker” the terms “casino” and held that Appeals evi- “are entitled to present and that plaintiffs ambiguous of those terms and the meaning dence” to demonstrate violate constitu- may which “video poker” manner Id. at 740-42. The court “casinos.” against tional prohibition evidence to to present “are entitled held that plaintiffs also in ORS the allocations [mandated] claim that their support further- creating jobs for the purpose 461.546 are not Id. at 742-43. in Oregon.” development economic ing 4 provides: B ORCP 21 ‘ trial, delay closed, time as not but within such pleadings are ‘After the pleadings.” judgment may on the any party for move Judge joined by Edmonds, J.,

Rossman, J., dissented. by poker” is authorized ORS reasoned that “video Rossman “casino 461.217 and that it is unconstitutional 461.215 and gambling”; of funds he also reasoned that the allocation 461.546(1) promote economic ORS does not mandated Oregon development. Ministries v. State Ecumenical (Rossman, App supra, J., dissent- Comm., 118 Or at 746-47 straightforward, ing). Judge that, “in Rossman stated this challenge plaintiffs statutes,” were entitled to facial judgment pleadings. at 747. on the 118 Or arguing reconsideration,

Intervenors moved for requiring evidentiary presented questions law no the case Appeals amplification. The Court of allowed reconsideration opinion. v. and Oregon to its former Ecumenical Ministries adhered App 389, P2d 952 Comm., Or State (1993). sought review in this court on the issue of Plaintiffs 461.546(1). constitutionality of Defendants and sought intervenors review on that issue and on the issue of constitutionality of ORS 461.215 and 461.217. We questions allowed review in order to answer those now reverse the decision ofthe Court of of law. We

Appeals and affirm part judgment reverse in of the circuit court. A FACIAL METHOD OF RESOLVING CHALLENGE challenged statutes, To determine whether the on 4(3), (e), 4(7), face, their we must ascertain the violate Article sections meaning provi- of those constitutional statutes, which construed sions and none of has been Appeals court. The Court of held

pertinent provisions ques- constitutional and statutes is not judgment law that can decided on a motion for tion of the pleadings. original opinion below, the Court of its disputed Appeals concluded that there are issues of “material 4(7), the term in Article is fact,” because “casino” ambiguous. Ecumenical Ministries v. Using supra, App

Comm., at 740-42. the same 118 Or hearing evidentiary approach, an the court held that required revenues whether the use of to determine purposes specified with is consistent in ORS 461.546 558 4(4). Id. at 742-43. On recon- sections

sideration, the Court of adhered its Appeals holding. court reasoned that “casinos” video “games using courts, devices” are “that the trial court and things we, know about and can learn about from nothing nothing except 121 evidentiary App Or at 393. presentations.” The Court of erred in an eviden Appeals holdingthat when an required is term tiary hearing analyzing ambiguous in in a the constitution or statute. The issues dispositive Granted, in this facial are issues law. challenge of presented in constitution, in of a term the or determining meaning law, a take constitutionality may in court analyzing so, however, When court notice of certain facts. a does judicial facts, which are legislative the court is notice takingjudicial — statutory, what the law determining facts utilized — is or should be. See State v. decisional, or constitutional (1990) Clowes, 310 Or 686, 692 7,n P2d 789 (defining Tavern, Bay Chartrand v. Coos facts); discussing legislative * * * (1985) 689, 693, 696 P2d 513 facts (“Legislative 298 Or which have relevance to legal reasoning'and are those a legal whether the formulation of lawmaking process, court in the enactment of a ruling by judge a or or principle omitted)). (internal marks Judi legislative body.” quotation Oregon facts is not subject cial notice of legislative Clowes, v. 7, n supra, Code, 310 Or at 692 Evidence matter evi right present are not entitled as a parties facts.5 dence to demonstrate such in a in the constitution or an Simply put, ambiguity fact, let alone one itself, create an issue of not, by statute does evidence. Mon be resolved by presentation that must 1, 211 Or 360, 315 P2d 797 District No. v. School aghan held that case, this court In that illustrates the (1957), point. relating separation Constitution provisions in the serving from teacher school public forbade powers to define the court had question, answer the To legislature. and “functions.” duties” “official terms the constitutional this court be ambiguous, were held to terms key Although stated: appropriate to it never is mean that ruling be understood to should not Our identifying assist the court hearing information to to receive

hold a or in a statute. constitution a term the * * * presented. “Thereis no issueoffact duty Our sole one or applicability in terms of the dispute to resolve relied the provisions upon both of the constitutional added). Id. at (emphasis school district.” 363 disputed meaning terms, the of the constitutional To resolve language history of the consti- this court considered provisions, parallel provisions tutional tution from which the of the Indiana Consti-

challenged drawn, sections were secondary treatises, and historical sources. Id. at 364-73. orderly

This court’s more recent cases establish an analyzing ambiguous pro method of terms in constitutional adopted through process visions the initiative and in statutes. respect provisions, With to initiated constitutional court has held:

“In interpreting a constitutional provision adopted through the initiative process, our task is to discern the the text of the provision intent of voters. The itself The context of the best evidence of the voters’ intent is ^[6] language considered; may however, of the ballot measure also be if the intent is clear based on the text and context of the constitu tional the court provision, does not look further.” Roseburg City Roseburg, School Dist. v. 374, 378, 316 Or of (1993) (citations omitted). 851 P2d 595 and footnotes provision adopted through context of a constitutional process initiative includes related ballot measures submitted Douglas to the voters at the same O’Mara election. v. Cf. (1993) County, (considering, 72, 76 1, 318 Or n 862 P2d 499 part legislative enactment, of the context of a a related act). provision enacted as of the If same the intent of the voters is not clear from the text and context of the initiated 7 provision, history constitutional the court turns to the of the provision.8 6 Portland, (1865) (“If, King City 146, See also v. 2 Or 154-55 when our of made, significa Constitution certain was words or sentences had obtained a certain force, decision, presumed, usage legal tion or either common it must be if found instrument!,1 they meaning, plainly in that that bear that from established unless intended.”). certainly provision,

the context or other a different 7 analysis required ending This court has noted that caution is before * * * considering history provision. practice, of an initiated constitutional “In rarely opposing party disputes interpretation cannot show a courts see over when the words, possible reading of the which it claims to be correct context.” alternative (1988). Ed., 485, Lipscomb 472, Higher v. State Bd. P2d 305 Or 753 939 Lipscomb points addition, history importance considering an out

560

This court to the construction applies of statute the same method of described analysis, above, it applies the construction of an initiated constitutional provision. PGE v. Bureau Labor and Industries, 606, 4, 317 Or 612 n P2d School v. (1993); Roseburg Dist. City Roseburg, supra, n Or at 378 379 n is, 5. That the first level of is to examine analysis text and context. That level includes subsidiary principles statutory construction that are rele vant to this case. In determining meaning of the text of a statute, words of common usage are not defined in the statute are to be typically their given plain, natural, PGE v. Bureau Industries, Labor and ordinary meaning. supra, And, 317 Or at 611. context of a statutory provision other includes provisions same statute and other Ibid. statutes on the same if subject. Only the legislative intent remains unclear after an examination of text and context does the court consider legislative history.

“CASINOS” 4(7) XV, Article Meaning Section A. of We first XV, consider the of Article meaning section 4(7), the Oregon Constitution, of which is the of subject first claim for plaintiffs’ relief. In we consider the particular, “casinos,” term as used in that The meaning section. XV, text of Article 4(7), section does not define the term “casino” or otherwise disclose to us the intent of the voters in of casinos in this Neither prohibiting state. does operation other of the constitution define provision “casinos.” ordinary of the noun is a meaning “casino” “building or room used for social amuse- meetings public * * * specif, building ments a or room for Webster’s gambling.” aspects provision provision when the deals with essential initiated constitutional authority. governmental Id. at 484-85. through considering history provision adopted a of constitutional examines, facts, legislative process, other sources of informa initiative this court as adopted and at the time the measure was tion that were available to voters understanding public’s information includes of the measure. Such disclose the in the voters’ arguments against the measure included for and ballot title reports comment on the mea pamphlet, contemporaneous news and editorial (1988) (examining 115, 131-34, 752 those Wagner, P2d 1136 v. 305 Or sure. See State through adopted amendment determining the a constitutional items in process). initiative (1976). The noun Dictionary New International Third betting: practice as “the act is defined “gambling” or other risking money consciously a game act of playing Third New International Webster’s on its outcome.” stakes (1976). that a only definitions suggest Those Dictionary 932 It seems gambling.” “for a structure physical “casino” is a mean- so literal and sweeping that voters intended doubtful such broad, were that place If the meaning however. ing, pennies play poker room where friends a citizen’s game not it had even though from operating, would be prohibited versions of Article under the earlier been prohibited statehood. section since the context of further assistance

We turn for 4(7). Article XV that Other provisions section 4(7) of that are at the same time as adopted were Article XV 4(4), 4(5), and 4(3), context. Sections and operation for the establishment in some detail provide of “any game pro- the operation a state lottery, including Commission,” excep- with certain cedure authorized “lottery games and the here, operation relevant tions not 4(4)(d) Const, XV, § Art Or utilizing computer terminals.” added). (emphasis 4(4) (d) that, in lottery in part also provides

Section devices, “no terminals or other utilizing computer games directly players dispensed shall ever be currency coins or That directive terminals or devices.” computer from such using to games the voters were not opposed suggests intent to prevent more limited terminals, but had a computer currency- the cash- or having devices the use of machines.” “slot features of so-called dispensing 4(7) the Legis- that provides section By comparison, authorize, shall prohibit, shall not Assembly lative context described The Oregon. in operating “casinos” from to distinguish intended the voters suggests above types particular the authorized State between utiliz- including game procedures (expressly game procedures hand, general terminals), the one computer ing “casinos,” on known establishments category gambling voted to prohibit voters is, when the That the other. to prohibit did not intend “casinos,” they terminals. computer using procedures game operating from The 1984 amendments XV, Article section were presented to the voters at the general election in that year as Ballot Measure 4. 1984 Ballot Measure 5 was the companion measure to Measure 4 and was adopted by the voters at the same election as was the latter. Measure therefore also constitutes part of the context of Measure 4. We turn to an examination of Measure 5.

Measure 5 contained statutory provisions for the regu- lation of a state lottery, should one be authorized passage of Measure 4. The text of that measure neither defined nor referred to “casinos.” Some portions of the text nevertheless assist us in determining the of that term. 4(2)(d)

Section of Measure 5 repeated the following injunction from Measure 4: games

“In utilizing computer devices, terminals or other no coins or currency shall be dispensed directly to players from such computer terminals or devices.” Section of Measure 5 provided part: person “No shall be a Game Retailer who is engaged exclusively in the selling business of Lottery tickets or shares.” The quoted provisions of Measure 5 suggest voters intended to prevent use of lottery devices directly dispensing coins or currency and that intended to they pre- vent the establishment of enterprises “engaged exclusively” in lottery-related activities. all of the

Considering text foregoing context, we that, conclude Article adopting XV, 4(7), section prohibit- ‘‘ ’’ ing operation casinos, the voters intended prohibit operation establishments whose dominant use or domi- nant both, purpose, is for gambling. voters did not intend, 4(7), Article section adopting prohibit use lottery games using terminals, with the computer exception of those that coins or dispense currency directly to players. ORS 461.215 and 461.217

B. Constitutionality of 4(7), thus Having interpreted we next consider whether and 461.217 ORS 461.215 violate that provision. constitutional ORS 461.215 provides part: “(1) may initi- Oregon State Commission * * video devices *.” games using game ate a provides part: ORS 461.217

“(1) avideo lottery game A video terminal offers Oregon game by authorized the Director of lottery only on the placed operation premises shall be lottery with the state that has a contract an establishment a video be within lottery game retailer. The terminal must retailer. employee lottery game an of the video the control of It not be other business or location. placed shall “(2) lottery only game placed A video terminal shall by an licensed premises on the establishment “A” with a Class dis- [OLCC] Control Commission Liquor Beverage, “B” Retail Malt Restau- penser, dispenser, Class dispenser lottery game A video rant or Seasonal license. only in that placed premises terminal shall be and that for the primarily is restricted to minors is used consumption beverages. of alcoholic “(3) No more than five video machines shall be (2) placed premises in or on described subsection of this section.” what ORS 461.215 and order understand mean, we also examine the statutes governing

461.217 the OLCC of the licenses enumerated in 461.217. by issuance “A” “B” licenses are dispenser governed Class and Class 472.110(1), ORS which provides: clubs, may private

“A license be issued to dispenser’s railroad organizations, veterans’ organizations, fraternal and commercial operating interstate trains corporations establishments served, where is cooked and and shall be food ” ‘A,’ ‘B,’and Class ‘C.’ designated as Class Class ORS governed by malt licenses are beverage Retail of business “operating place 471.265 and permit persons * * *, beverages are to sell malt served, where refreshments * * * may also hard cider and wine.” Such establishments entertain- and “other forms of singing, proper allow dancing, are licenses licensed Restaurant ment upon premises.” may 471.250; licensees also restaurant by ORS governed licenses Seasonal form of entertainment.” “any allow proper issued to 472.205; such licenses are are governed and permit is cooked and served where food establishments the licensee to allow and other “dancing forms of proper entertainment upon licensed premises.”

We conclude that ORS 461.217, 461.215 and when considered in the context of limitations imposed by other applicable of ORS provisions 461, 471, are chapters with consistent prohibition 4(7), ” “casinos, as we have that interpreted prohibition. The use of se, video terminals per lottery game not, does make a place a casino. Because ORS 461.215 and 461.217 the use of prohibit more than five video lottery terminals game any one location and are to other subject provisions regarding types establishments in which such terminals may located, those statutes are consistent with the constitutional prohibition establishments whose against dominant use or both, dominant or purpose, is for gambling.

It be that some in which may establishments video lottery game terminals are located are within casinos XV, of Article 4(7), section notwithstanding limited number of terminals each establishment and the that requirement the establishment be in a engage licensed to business other than the business of That kind of gambling. factual, as-applied inquiry beyond is of or scope inquiry case, however. to this facial our response challenge, task is to determine whether ORS 461.215 and only 461.217, 4(7). face, on their are in with XV, Article section harmony The lottery five video terminals in one presence game place not, circumstances, does in all demonstrate that gambling both, the dominant use or dominant or purpose, establishment. 461.217,

We hold that ORS 461.215 ORS face, 4(7), their do not violate Article section Oregon Constitution.

“COSTS OF ADMINISTRATION” 461.546(1) ORS provides: “An amount to six of the net revenue equal percent lottery games county video in the shall be distributed county expenses expended as administrative to be follows: “(a) enforcement; and percent gaming Three for law “(b) mental health community pro- Three percent gambling to treat addiction.” grams provided argue expenditures for in Plaintiffs that the develop- jobs promote do not create economic that statute 4(4)(e). required by XV, sections ment, as development broad that economic is a Defendants counter term that provided encompasses expenditures for in ORS 461.546(1). unnecessary arguments.

It is to reach those 461.546(1) expenditures designates the as administrative 4(4)(e), expenses.9 Under Article administrative below) (the may which we not nature of discuss legislature percent has exceed 16 specified revenues. 461.546(1) expenditures are “dis- in ORS that * * * they expenses,” is, tributed as administrative expense portion are from the administrative to be taken (84 lottery more) percent portion revenues, than rather from jobs paying prizes creating devoted to and to furthering development. economic pertinently argue

Intervenors in this court that the 461.546(1) expenditures permissible authorized are argument. costs of administration. We turn to that 4(3) 4(4)(e) Meaning XV, A. and Sections of 4(3) 4(4)(e), XV, does The text of Article sections and the “adminis not define terms “costs of administration” or operating.” any provision tering and Neither does other of Article XV define those terms. 4(4) (e), suggests, how-

Part of Article section with the ever, had in mind the costs associated that the voters Lottery. necessary operate procedures the State internal to 4(4)(e) Lottery operate requires as a self- the State Section pay supporting revenue-raising agency, “all which must 461.548, provides: which See also ORS law, Lottery any provision “Notwithstanding the other of requirements prizes for and adminis- constitutional Commission shall meet the lottery games. The separately other for video all trative costs lottery games the for intermingle of video not the results commission shall other of calculating limit administrative purpose the allowable lottery games.” of its out of the expenses” revenues it receives. added.) (Emphasis

The usual of the words meaning used Article 4(4) (e) a similar conveys The ordi- message. nary of the noun “administration” is “an act of Third administering.” Webster’s New International Dictio- (1976). nary 28 The verb “administer” is defined as “to of’; “to manage affairs direct or the execu- superintend tion, use, or conduct of.” Id. at 27. Those definitions suggest that costs of administration are costs related to the manage- implementation Lottery. ment or of the State text addition of Ballot Measure considering 4, context, we measure, examine its its including companion 1984 Ballot Measure 5. Section 7 of Ballot Measure 5 stated in part:

“(1) money All payable the Commission shall within deposited an account the General Fund known as * * * Lottery the State Fund. The State Fund is continuously appropriated purpose administering for Lottery. the Commission and the State operating

“(2) shall be made from the State Lot- Disbursements tery any following purposes: Fund for * *

“(a) *; payment prizes “(b) Expenses Lottery, Commission the State “(c) tempo- funds advanced from the Repayment of * * *; for initial costs rary start-up loan

“(d) from the State Fund to Transfer of funds purpose described Section public the benefit of Article XV of the Constitution.

“(4) include all costs the State shall Expenses of the State and administration operation incurred resulting any contracts entered Lottery and all costs from goods required into or lease services purchase Commission, to, limited the costs of including but not tickets, services, materials, audit inde- independent supplies, transmission, studies, advertising, promotion, data pendent communications, incentives, relations, compensation public Retailers, bonding Lottery Game for Lottery to Game paid shares, reim- Retailers, distribution of tickets and printing, provided for services governmental entities bursing other Lottery, goods and for the State necessary other and services effectuating purposes this Act.No more for (16%) percent than sixteen of the total annual revenues accruing fromthe saleof all tickets and shares from expended payment all expenses Gamesshall be for the of the added.)10 Lottery.” (Emphasis the State 7(2)

Because section of Measure 5 does not include any category specifically denominated “costs of administra- tion,” that subsection informs us that the of admin- “costs lottery generally categorized istration” of the are “expenses” 7(4) Lottery. of the Commission and the State Section “expenses” broadly

informs us that are and non- inclusively although However, that, we defined. note a broad range goods permitted apparently and services is to be 7(4), purchased goods leased or under and those “required by services must be the Commission” and must “necessary effectuating purposes for That of this Act.” wording suggests “expenses” relate to the internal implementation management lottery. of the

Considering foregoing context, text and we con- phrase clude term that the “costs of administration” and the “administering operating,” as used in Article sec- 4(3) 4(4)(e), “expenses” tions relate to the or “costs” of implementation management lottery. the internal 461.546(1) Expenses B. ORS and Administrative Finally, expenditures we consider whether 461.546(1) authorized ORS are administrative 4(3) and 4 (4)(e). permitted by begin We XV,section asking whether expenditures “gaming enforcement,” law 461.546(1)(a), properly as that term is used in ORS can be lottery. expense considered an administrative chapter “gaming 461 does not define law enfor ordinary meaning “gaming” of the noun is cement.” The playing game practice “the or for stakes.” Webster’s act (1976). Dictionary The noun Third New International pastime”; “game” “a is defined in as “an amusement 7(4) 461.510(1) 5 now are codified at ORS Sections of Ballot Measure 461.510(4). (“There hereby within the created General See also ORS 461.530 continuously appropriated for the Fund Fund which is lottery.”). administering operating purpose and the state the commission 568 according

physical competition mental or conducted part rules.” Ibid. The noun “stake” is defined as a “sum of money equivalent prize risked”; or its “the set in con (1976). Dictionary test.” Webster’s Third New lnt’l 2220 See 167.117(5) (defining “gambling” activity also ORS ‘ person something that occurs when ‘a stakes or risks of value upon the outcome of a contest of chance or a future contin gent person, event not under the control or influence of the upon agreement understanding person an or that or something will someone else receive of value the event of a outcome”); chapter (providing regu certain ORS for the bingo, “games” establishing lotto, lation of and raffle and Account). Gaming suggest Those definitions applicability. “gaming” term has broad

Giving “gaming” ordinary meaning, the term its we “gaming that the law conclude term enforcement” refers broadly generally relating and to enforcement of laws playing games prizes, including for stakes or but not limited games operated by Lottery. to question State We turn to the expenditures “gaming

whether for law enforce- expenses ment,” understood, as so are administrative of the 4(3) meaning XV, State within the Article sections 4(4)(e). though “gaming that, We conclude even laws” playing games are laws that relate to the for stakes or prizes, including games operated by Lottery, expen- the State county’s ditures for a enforcement of such laws are not an expense lottery. because, of the That administrative although gaming complements some law enforcement lottery, expenditures gaming operation ofthe for law enforce- implementa- expenses ment are not or costs of the internal lottery.11 management tion or of the expenditures It remains for us to decide whether the — 461.546(1)(b) “community for mental authorized in ORS — programs gambling are adminis health to treat addiction” 4(3) expenses XV, Article trative allowed sections 4(4)(e). programs may Although the need for such result 461.546(l)(a) county” “gaining law enforce allocates funds “to added.) read, however, (Emphasis Nothing opinion to affect in our should be ment.” maintaining purposes expenditures by the for the Commission Lottery’s compliance governing security ensuring with the laws the State own lottery. operation of the from the operation lottery, for. men- expenditures tal programs health to treat gambling addiction also are not or expenses costs of internal implementation manage- ment of the lottery. those Accordingly, expenditures are not administrative of the State within the 4(3) 4(4) (e). Article sections

We hold ORS 461.546(1), face, on its violates sections 4(4)(e), the Oregon Constitution.

CONCLUSION In summary, not, ORS 461.215 and 461.217 do face, their XV, violate Article 4(7), section of the Oregon Constitution. 461.546(1), face, its violates Article 4(4)(e), sections and of the Oregon Constitution.

The decision of the Court of Appeals reversed. The of the circuit judgment court is affirmed in and part reversed in and part, the case is remanded to the circuit court for further proceedings.

FADELEY, J., in and concurring specially con- in curring part.

I concur with the decision announced in the lead but opinion write I because do not think separately case, this which is decided on the sufficiency alone, of plaintiffs’ pleadings a for provides an platform intricate scheme of rules announcing for interpreting initiated constitutional amendments.

This case involves of a few the only newly words enacted in 1984 in an initiated constitutional amendment, “casino,” namely, words “costs of administra- tion,” and jobs “creation of and economic The development.” make no issue or for parties contest us to resolve concerning in methodology for use initiated interpreting constitutional amendments. an Announcing interpretational scheme when there controversy is no results in abstract judicial legislating. Constitution, 4, orig- in inally provided part: tickets,

“[Ljotteries, and the lottery any purpose sale of for whatever, Legislative Assembly are and the shall prohibited, prevent the same laws.” penal people by initiative measure amended that permit operate

prohibitory the state to a State article to Lottery through Lottery Commission.1 amendment, constitution continued to

After that gambling except participation prohibit as and limit state provided The first subsection of in the 1984 amendment. amendment states: (6) (5), (2), (3), (4),

“Except provided subsections tickets, section, lottery lotteries and the sale of whatever, Legislative are and the prohibited, purpose the same laws.” Assembly prevent by penal shall general prohibition exceptions are The listed as follows: (2) bingo; permits charitable

Subsection (3) Commission creates a State Subsection Lottery “[a] expenditure places limits on the State Lottery”; proceeds the State from (4) (d), paragraph authorizes, a State Subsection using lottery games limits the terminals, but Lottery may “[t]he game procedures that kinds of specially operate” “Commission,” authorized to those gambling from the Commission’s kinds of removes some (e), paragraph jurisdiction, of total limits the use also, shares”; all tickets or “from the sale of revenues (5) funding start-up provides of “the Subsection Lottery”; and the State Commission 4(3), XV, Constitution, amendment, Article section part Oregon in now That provides: Lottery hereby which shall estab Commission created the State “There is ” * * * Lottery. operate

lish and a State 4(4)(d) provides: in Section Lottery pursuant to the implement operate and a State Director shall “The rules, guidance, the Commission.” and under constitutionally empowered Lottery, commission a and of the State Creation against state laws it, operate since statehood not the first relaxation were betting in 1933. Or State-regulated was enacted gambling. racetrack in involvement provide legislature And, 1976, public vote authorized in a ch 397. Laws lotto, conducted establishment, bingo, and raffles regulation of operation, and for the XV, Const, § Art 4. “charitable, organizations.” religious Or by fraternal or (6) provides “[ojnly lottery Subsection one state operation permitted shall be in the State.” Oregon

One constitutional restriction, Constitution, 4(7), provides: XV, Article section Legislative

“The Assembly power authorize, has no prohibit, and shall operation casinos from in the State of Oregon.” prohibits Lottery

A engaging second restriction from in gambling. certain kinds of

Yet another set of in restrictions the 1984 constitu- money tional amendment circumscribes the uses of all Lottery. received from the State All funds not needed for prizes paid operation Lottery and administration and of the retailing lottery games through and Commission “creating jobs the Commission are dedicated to and further- ing development” economic within the state. The constitu- proceeds tion limits use of received the Commission to alternatively administration,” “costs of “expenses” also referred to Lottery. § of the State Const, XV, Or Art (4)(e).2 legislature authorizing The 1991 enacted statutes poker Commission to initiate video and other gambling only interactive video machines are located in machines, but if the

places that are licensed to sell intoxi- only cants and licensed if limited to five machines for each such premises. legislature ORS 461.215 and 416.217. The proceeds also directed distribution of some of the from Constitution, 4(3), provides part: Article section interest, proceeds Lottery, including excluding “All from the State but costs payment prizes, purpose creating of administration and shall be used for the jobs furthering development Oregon.” economic 4(4)(e) provides part: ‘TTjhe operate self-supporting revenue-raising agency shall as a loans, government appropriations, state no or other transfers of state funds pay prizes shall be made to it. The State shall all and all of its public out of the revenues it receives from the sale of tickets or shares proceeds net turn over the therefrom to fund to established Legislative Assembly Legislative Assembly appro- which shall make from jobs furthering priations public purpose creating for the benefit of the development Oregon. from economic At least 84% of the total annual revenues public in the form the sale of all tickets or shares shall be returned to the prizes benefiting public purpose.” and net revenues lottery games” in which the machines “video to counties desig- legislature producing were located. The the revenues pay “law enforcement” and “mental nated these funds to 461.546(1). gaming gambling. or health” costs foregoing portions Plaintiffs assert that prohi- either the constitutional 1991 enactments contravene (ORS 461.217), against casinos 461.215 and the consti- bition any lottery proceeds state dedication all of the tutional (ORS 461.546(1)), On the motion of defendants or both. judgment plead- intervenors, on the the trial court entered complaint plaintiffs ings against on their amended without a hearing of each ofthe trial. I turn to an examination factual or two theories.

I CASINO implemented complaint alleged: “When Plaintiffs’ * ** state-sponsored pursuant amended, as ORS 461.215 operated [when poker ‘on such will have the effect video spon- gambling games conjunction premises in with other gambling creating Defendants’] in the State casino sored Oregon, I constitution. understand in violation” of the meaning, pleading in its normal to be used “casino” gambling,” building i.e., dedi- room a or which includes “/or activity. gambling Third New Webster’s to substantial cated 1976) (emphasis (Unabridged Dictionary International added). although meaning, litigant suggests other No you suggest, have a casino cannot addition, some where gamble. only Plain- are used to interactive machines prove allegations hearing under those a tiffs seek premises liquor lottery games licensee’s in a located “video casino.” as a that establishment would constitute According legislation under constitutional litigation subject is described case, the in this attack lottery using games devices,” “video game video “a equipment,” lot- and “video games,” “game terminals tery further described 461.215; and is terminals,” ORS lottery game that offers terminal “video as a ORS 461.217 lottery two Those lottery game” machines.” and “video video be limited require machines” “video that the statutes premises to no more than five machines on such described the statute.3

The statutes also limit locations the where machines “only may placed premises be to on of the an establishment lottery lottery that has a game with contract the state as a video “only premises retailer” and also on the anof establish- by Oregon Liquor ment licensed the Control Commission” having liquor certain kinds of licenses. ORS 461.215 461.217.

Because of the five-machine limitation one premises by Oregon Liquor licensed the Commission, Control apparent legislation may it not is that the establishes, or allege specific establish, a casino. Plaintiffs no facts to video poker lottery games” implementa- or other “video toas how games, conjunction tion of even those other, with each creating gambling.” “will have the effect of casino Plaintiffs’ allegation that that effect will be created is itself but a allegation an conclusion, not of fact, and as such is insuffi- cient in this constitutional context to an create issue for hearing. Equit. See Coalition School Fund. v. State (1991) Oregon, (Fadeley, Or 300, 322, 311 811 P2d 116 J., concurring) (making point). similar Plaintiffs here have not sought complaint alleging to a file further or second amended proved, opera- that, facts if would establish that creation or legislatively tion a or casino casinos has been authorized contravention of the constitution. On the basis discussed in opinion, Appeals’ I would reverse the Court of remand judgment and affirm “casino,” of the circuit court on the pleading, phase of the case. 3 6,000 poker placed by About video have been machines the State among 1,300 locations, approximately percent Commission retailer with 90 having per Cortright, Report retailers the maximum of five machines location. Staff Legislative Lottery Oversight, to the Joint Task Force on “Do Current Video (Feb. 1994). According Retail Commissions Maximize Net that State Revenue?” to gross report, wagering lottery year nearly games during on video fiscal was one billion, ($1,511,000,000). Id. at 6. After paying five-hundred eleven million dollars million) ($168 prizes, nearly sixty-eight net revenues one-hundred million dollars produced. poker played by single player operating Ibid. Video were is a video credits, machine, buys player A betting terminal. recorded in the for use in whether single player or not. Id. at The player’s winnings win will are also as 8. recorded may in. the credits machine and be bet without a further infusion cash player. report gross wagering The does not describe whether revenue amount reported composed player only winnings above is cash or also includes the credits wagered again recorded in the machine and therein.

II ECONOMIC DEVELOPMENT Plaintiffs also seek a to elicit facts to hearing prove complaint’s allegations the amended the transfer of — local lottery proceeds some counties law pay hiring enforcement or for mental health workers to — with addicts is within limited gambling pur- deal not for which be under poses lottery proceeds may spent in the strictures stated Constitution. General, Attorney whose it is to duty uphold

statutes where that even a remote passed by legislature intervenors, may who are possibility, and businesses 461.215, licensed video retailers under ORS lottery game contend that the transfer of legislative proceeds should be counted as an of administration county expense that, and as an of the State Commission the expense Commission, the is constitutional.4 transfer above, provisions, quoted

The state constitutional a clear intention the to restrict the uses of show of people the of the Commis- expenses funds to administrative lottery (and and prizes and to eco- Lottery agency) sion the State are job creation. Net development, including proceeds nomic * ** “a the to fund for the benefit of public to turned over of and economic jobs furthering develop- purpose creating in net are to be what is left proceeds ment” Those Oregon. “ all of after State shall all and its prizes over pay [t]he Const, § Art XV, the it receives.” Or out of revenues expenses 4(4)(e).5 the are also limited to by requirement Expenses money spending lottery to mental health It is also the hire contended and, therefore, complies jobs provide gambling to addicts to services creates workers money, beyond purposes using administrative balance of the with the of the development.” jobs furthering expenses, prizes economic and “creation of it, any hiring jobs” argument appears prove to too much. Under The “creation of employee provided a new employee by government, whether the or local of an state service, “creating jobs,” appear qualify existing as thus an would to or service many public employees lottery as those pay of permitting use funds to salaries as of were to cover. funds sufficient 4(4)(e), part: provides in pay prizes all of its out the all “The shall public to the and turn over tickets shares it from the sale of revenues receives * ** public purpose of proceeds benefit of the fund for the net therefrom to a the Oregon. jobs development At least 84% of creating furthering economic ** * percent return 84 “total annual revenues 6Id public.” III CONSTITUTIONAL INTERPRETATION The adopted intent voters who the constitu- tional amendment must our appli- control interpretation cation it. It is the touchstone for of an any interpretation intent, initiated measure. best evidence of that in an amendment, initiated found the material that all voters voted, had them when they namely, before the caption title, the question ballot which are portions printed directly on all all by ballots used absentee and voters cast regular their intent, votes. I determining join voters’ cannot opinion lead to a secondary relegating status one all voters are thing likely most to read before voting amend the I constitution. think the scheme chosen lead which opinion, fails to give status to the ballot title primary with the text along relates, amendment to which it fails to reflect our common knowledge about the phenomenon an voting would, on initiative I instead, measure. in deciding the case, review the plain of the ballot title and the language amendment text adopted.

Because the caption and are question printed ballot person used who every adopt voted the initiative amendment, it is the single most reliable source of the actual revenues all annual sale tickets or shares shall be total from public prizes benefiting

returned to the the form of and net revenues public purpose jobs furthering development].” of creation and economic Tof added.) (Emphasis 6 parties concerning percent No is the issue raised in this case how 84 this provision 177-100-020, compensates poker with fits OAR which video retailers with percent remaining prizes gross paid “35 the amount revenue after have been to ’’ year 1993, players. paid lottery games $58.4 In fiscal million was to retailers of video 3, Cortright, supra prizes Lottery on a citing $167.6 net after million. to note at Summary. compares Commission Fiscal Year Financial 1993 This to commissions of paid lottery games prizes $15 million to on a retailers “traditional” net after year. created, $102.4 million for that At the State was now time the what is paid percentage compensation limited 461.310 the to be as to retailers to 6 * * * shares,” percent price “of retail of the the commission shall the ‘Tulntil otherwise determine.” only the It is common source intention of the voters.7 certainly the amendment that is available information about Pamphlet every It is that an official Voters’ to voter. true regis- every where one or more mailed to household Pamphlet for resides, voter but even the Voters’ tered caption begins any question, and measure with the ballot title initiated only printing words of the measure. thereafter the may Many including voters, voters, have the absentee not opportunity measure, the must read the text of but all see they caption question printed cast. I on ballot that the caption determining intent, voter that, believe equal question value a text that are of at least with measure’s many in fact read.8 voters do not Caption the 1984 amendment

The ballot title for provided:

“Constitutional Amendment Commission; Establishes State For Development” Profits Economic provided: Question title The ballot lottery operated by “Shall a commission be estab- state lished, jobs profits to create and further economic used development?” profits emphasis using gambling both, development of the economic is clear. Had intention merely lottery profits another revenue

voters been to treat as — pay any to state available to and all related source — activity they governmental not have voted to would presented by caption question approve the measure summary. Many permits printed ballots to omit ballot title’s ORS 254.175 do omit it. counties opinion disregards knowledge about voter information and lead question printed downgrades caption a than on the ballot to lesser status rejecting join certain accorded I cannot the most the text measure. intent. indicator of the voters’ unnecessary, unwise, interpret probably I also find it to look to statutes to provisions. generally Even if that wore a of initiated constitutional intent, indicators of proper there are sufficient clear method to determine voters’ contemporaneous within to make a reference intent the constitutional context unnecessary. statutes Further, “legislative join relegation than I facts” to lesser status cannot voters, opinion’s lead determining the intent of the “text and context” authority. footnote 8 does without citation to and the restriction on use of containing proceeds, contained (4) in measure, subsections and of the which ballot title so strongly emphasizes.

It follows from the that foregoing diversion of local proceeds pay government salary enacted ORS is 461.546 not constitutionally permissible. That statute section is therefore a nullity, as plaintiffs have and alleged contended. The further hearing ordered of Appeals’ decision, Court and to held in court, circuit is one and, therefore, related that statute has no function. that decision Accordingly, should appropriately be reversed on the ORS 461.546 of the case. I phase join would the lead for the opinion, here, reasons stated and reverse both of the circuit court and judgment the Court of Appeals’ remand, and enter declaratory in favor judgment of plaintiffs, 461.546(1) as prevailing party, ORS declaring unconstitu- void, tional in defendants, favor as to ORS 461.215 461.217, those declaring statutes constitutional valid. J.,

UNIS, in concurring part, specially concurring part.

I agree with the majority’s this case and holding with I most its analysis. however, am not willing, join that opinion that suggests that this court should on put analytical “blinders” so as to considering avoid rele- vant information as to what the voters intended in enacting an initiated constitutional In an initi- provision.1 interpreting ated constitutional this provision, court should consider available sources information that bear on interpreta- tion of provision. For even if example, the text and context seem I unambiguous, believe that this court should examine sources information that were available to the that voters 1 Roseburg City Roseburg, 374, 378, In Dist. School v. 316 Or 851 P2d 595 (1993), court, authored, opinion, in a unanimous I which stated: interpreting provision adopted “In through constitutional the initiative * * * |T|f

process, our task tois discern the intent of the voters. the fvoters’l intent clear provision, based the text and context the constitutional (Citing Improve court does not look further.” v. Comeaux Water Wonderland (1993).) Dist., 562, 570, ment 315 Or 847 P2d 841 reflection, believe, Upon text, I further now I state that this court should also consider available sources of information that bear on intent. the voters’ enacting understanding may and intent the voters’ disclose provision. includes, least, at This constitutional an initiated (normally caption portions the ballot title those 254.175) actually question, the voters were before that they the measure.2 their ballots on cast at the time my information view, sources of the available including caption case, in this intent bear on the voters’ support reached title, the conclusion and ballot majority. given in weight unnecessary should be to state what in this case I find it bearing voters’ on the any particular of information source interpretive process to intent.

Case Details

Case Name: Ecumenical Ministries v. Oregon State Lottery Commission

Court Name: Oregon Supreme Court

Date Published: Apr 7, 1994

Citation: 871 P.2d 106

Docket Number: CC 91C-11532; CA A72455; SC S40178 (Control), S40463, S40568

Court Abbreviation: Or.