Can dealers at a charity casino night legally keep tips from players in Maryland?

Plain-English summary

A state senator and delegate asked the Attorney General to weigh in on a practice a legislative task force had uncovered: at charity "casino nights" in Prince George's County, run by nonprofit groups like volunteer fire companies under Maryland's charitable gambling laws, patrons were tipping the members serving as card dealers and wheel operators, sometimes generously enough that people were joining nonprofits specifically to work the tables. The Attorney General concluded that these tips were not technically "proceeds" of the gambling itself, since a tip is a separate gratuity rather than part of the wagering transaction, so tipping didn't violate the specific ban on individuals receiving gambling proceeds. But the opinion concluded tipping still violated a broader restriction in Article 27, §255(b)(1) barring anyone from "benefiting financially" from a charitable gambling event, since a dealer pocketing tips was directly profiting from the casino night in a way the statute's charitable-fundraising purpose did not allow. The opinion concluded that this prohibition applied even though the county-specific statute governing these events, §258B, lacked its own express tipping ban, because the two overlapping Prince George's County gambling statutes had to be read together, with the more restrictive provision controlling.

Currency note

This opinion was issued in 1988. 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.

Common questions

Could a dealer at a Prince George's County charity casino night legally keep cash tips from players?
No, according to this opinion. The Attorney General concluded that accepting tips let the dealer "benefit financially" from the gambling event, which Article 27, §255(b)(1) barred, even though the tips themselves were not "proceeds" of the gambling in the technical sense.

What happened to a nonprofit organization if its members kept accepting tips at casino nights?
The opinion concluded that a nonprofit organization knowingly permitting its members to accept tips would no longer be conducting authorized charitable gambling at all, meaning the organization would be engaged in illegal gambling activity.

Did it matter that the specific Prince George's County casino night law didn't mention tips?
No. The opinion concluded that even though §258B, the statute specific to Prince George's County benefit performances, had no express ban on personal financial benefit like §255(b)(1) did, the two statutes had to be read together and the more restrictive provision governed, so the §255(b)(1) tipping ban still applied.

Background and statutory framework

The opinion explained that Article 27, §255 let certain nonprofit organizations, including volunteer fire companies and fraternal, civic, veterans', religious, or charitable groups, raise funds through gambling in 18 counties including Prince George's County, but only "if no individual or group of individuals benefits financially from the holding of [the gambling activity] or receives or is paid any of the proceeds." A separate, Prince George's County-specific statute, §258B, similarly authorized gambling as part of "benefit performances" by qualifying local groups, requiring that net proceeds "inure" to the sponsoring organization rather than to any member's private gain, but without §255(b)(1)'s broader "benefits financially" language.

Working through the statutory text, the opinion first concluded that tips were not "proceeds" of the gambling itself, reasoning that a gambling "transaction" is the act of wagering and playing to determine an outcome, while a tip is a separate gratuity voluntarily given for a service, not a step in the wagering transaction. On that narrower reading, tipping did not violate either §255(b)(1)'s "proceeds" language or §258B(a)'s requirement that net proceeds benefit the sponsoring organization.

But the opinion read §255(b)(1)'s use of "or" as showing the General Assembly meant to bar something broader than just receiving proceeds, citing Walker v. Lindsey for the principle that "or" signals a contrast between listed categories. The opinion concluded that a dealer accepting tips clearly "benefits financially from the holding of" the casino night in a direct way that the statute's charitable-fundraising purpose was meant to prevent, drawing on State v. Wyand's description of the gambling statutes' purpose (authorizing gambling only to raise funds for the public welfare, not for private gain to players or dealers) and the general rule from §246 that gambling statutes and their exceptions be construed to prevent the "mischiefs" gambling laws target, citing Gaither v. Cate.

Because §258B itself lacked language as broad as §255(b)(1)'s "benefits financially" ban, the opinion considered whether §258B's silence meant tipping was allowed there. It concluded no, reasoning that the two Prince George's County statutes, enacted in the same 1973 legislative session, should be read together under Kaczorowski v. City of Baltimore's instruction to give each statute full effect, applying the more restrictive provision where the two differ, and warning that allowing tips created a real risk that dealers could be paid to manipulate games in a tipper's favor, contrary to both statutes' shared purpose. The opinion concluded that an organization whose members accepted tips at casino nights would no longer be conducting gambling authorized under §255(b)(1), meaning the activity would be illegal gambling.

Citations and references

Statutes:

• Article 27, §255
• Article 27, §255(b)(1)
• Article 27, §255(b)(3)
• Article 27, §258B
• Article 27, §258B(a)
• Article 27, §258B(b)
• Article 27, §258B(c)(1)
• Article 27, §246
• Chapter 194 of the Laws of Maryland 1987
• Chapter 342 of the Laws of Maryland 1973
• Chapter 438, Laws of Maryland 1973

Cases:

• Walker v. Lindsey, 65 Md. App. 402, 407, 500 A.2d 1061 (1985)
• American Legion v. State, 294 Md. 1, 444 A.2d 842 (1982)
• Gaither v. Cate, 156 Md. 254, 258-59, 144 A. 239 (1929)
• State v. Wyand, 304 Md. 721, 728-30, 501 A.2d 43 (1985)
• Kaczorowski v. City of Baltimore, 309 Md. 505, 516, 525 A.2d 628 (1987)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1988/Volume73_1988.pdf

Original opinion text

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

GAMBLING

Casino Nights—Financial Benefit—Tips—Dealers at Casino Nights in Prince George's County May Not Accept Tips From Patrons.

February 2, 1988

The Honorable Leo Green
Senate of Maryland

The Honorable Dennis C. Donaldson
Maryland House of Delegates

You have each requested an opinion on whether dealers or other attendants at casino nights in Prince George's County may accept tips from patrons.
For the reasons given below, we conclude that the practice is not permitted by Article 27, §255 of the Maryland Code and, thus, that organizations knowingly permitting the practice would be engaged in illegal gambling.

                                I
                          Background

Article 27, §255 authorizes "volunteer fire compan[ies] or bona fide fraternal, civic, war veterans', religious or charitable organization[s]" in 18 counties, including Prince George's County, to raise funds for their purposes through gambling. However, §255(b)(1) authorizes those gambling activities only "if no individual or group of individuals benefits financially from the holding of [the gambling activity] or receives or is paid any of the proceeds from [the gambling] for personal use or benefit."
Section 258B, which applies specifically to Prince George's County, similarly authorizes the conduct of "benefit performances" including gambling by "[a]ny group of citizens of Prince George's County, or any company, association or body corporate, bona fide organized ... within said county for the promotion of the purposes of a volunteer fire department, or of any charitable, benevolent, patriotic, fraternal, educational, religious or civil object or objects, and not organized for the private profit or gain of any member ... ,"1 Under that statute, "the net proceeds of [the] benefit performance shall inure to such group, company, association or body corporate ... to be used for one or more of the objects hereinbefore set forth, and not for the private gain of any member of such group or organization ...."
A number of organizations in Prince George's County conduct casino nights, fundraising events that consist of gambling by means of card games, wheels of fortune, or roulette wheels, under those sections. The Task Force on Gaming Laws in Prince George's County, Maryland, established in accordance with Chapter 194 of the Laws of Maryland 1987, sec. 2, received information during the course of its study that patrons at certain casino nights make a practice of giving gratuities in the form of cash or chips to the members of the sponsoring organizations who are dealers or operators of the games. Because the tips may be substantial, some individuals have apparently joined a large number of nonprofit organizations solely for the purpose of serving as dealers at their casino nights.2

1
A group or organization that wishes to conduct a benefit performance must first obtain a permit from the County's department of inspections and permits. §258B(a). Section 258B does not itself contain special provisions governing the issuance of permits, but authorizes the County's governing body to "restrict or prohibit the issuance of written permits authorized under this section." §258B(c)(1).
2
Article 27, §255(b)(3) requires that gambling activities "be managed by the members of the [sponsoring organization] personally"; §258B(a) requires that gaming activities be "managed and operated only by members of [the sponsoring] group or organization personally."

                                      II
                       Permissibility of Tipping

We do not think that tips given to dealers or other members of an organization conducting a casino night by patrons of the activity are "proceeds of the gambling." In general, "proceeds" means the money or other thing of value that is produced by a transaction. Black's Law Dictionary 1082 (5th ed. 1979). The gambling "transaction" engaged in by patrons of a casino night is the process of betting on the outcome of a game and playing the game to obtain its outcome. Giving a tip to the dealer or other attendant is not an element or step of the gambling transaction itself. Rather, the tip is a gratuity, a gift

voluntarily given to one who performs a service. Black's Law Dictionary 631. Therefore, the receipt of tips by dealers or other attendants at a casino night does not violate the prohibition of §255(b)(1) against the receipt by any individual or group of individuals of the proceeds of a nonprofit organization's gambling; nor does it violate the requirement of §258B(a) that the net proceeds of gaming activities in Prince George's County inure to the benefit of the sponsoring organization, rather than for the private gain of any member.

However, §255(b)(1) provides that fundraising by means of gambling activities is permitted only "if no individual or group of individuals benefits financially from the holding of [the fundraiser] or receives or is paid any of the proceeds." The use of the word "or" indicates that the General Assembly intended to contrast the receipt of proceeds with other forms of improper personal profit. Walker v. Lindsey, 65 Md. App. 402, 407, 500 A.2d 1061 (1985).

We think that a member of an organization who receives tips for serving as a dealer or other attendant at the organization's casino night clearly does "benefit[] financially from the holding of" the casino night. Moreover, we think that the benefit to that individual is a direct one and thus clearly contravenes the intent of the restriction. Cf. Opinion No. 85-001 at 4 (January 15, 1985) (unpublished) (purchase of supplies or lease of space at ordinary rental from disinterested third person would not violate restrictions). Accordingly, we conclude that the receipt of tips by dealers or other attendants at casino nights violates §255(b)(1).

Section 258B(a) does not contain language like that in §255(b)(1) expressly imposing a broad prohibition against private gain from the holding of a fundraiser. Accordingly, it does not by itself clearly prohibit dealers or attendants from accepting tips. However, we do not think that §258B was intended to negate any of the restrictions imposed by §255 on gambling for charitable purposes.

Section 258B was enacted by Chapter 342 of the Laws of Maryland 1973. Section 255 was made applicable in Prince George's County by an amendment enacted in the same session of the General Assembly. Chapter 438, Laws of Maryland 1973. The General Assembly was presumably aware that it was enacting two laws, with somewhat differing language, regarding gambling by nonprofit organizations in Prince George's County. Therefore, the two laws should be read together so as to give full effect to each. Kaczorowski v. City of Baltimore, 309 Md. 505, 516, 525 A.2d 628 (1987). That can be accomplished by reading their provisions as cumulative, giving effect

to the more restrictive whenever the provisions are not identical.3
That construction also comports with the guiding principle for construction of the gambling statutes: "The courts shall construe the [statutes] relating to gambling and betting liberally, so as to prevent the mischiefs intended to be provided against." §246.4 As a necessary corollary of this rule, exceptions to the gambling statutes such as §§255 and 258B must be construed narrowly.
The practice of tipping raises the possibility that tips may be offered and accepted to influence dealers or attendants to manipulate the games in the tippers' favor. That result would clearly contravene the purpose for which both §255 and §258B were enacted. Those statutes were intended to authorize gambling, not for any private gain to either players or dealers, but only to raise funds for purposes that contribute to the public welfare. See generally State v. Wyand, 304 Md. 721, 728-30, 501 A.2d 43 (1985). Moreover, they were enacted against a background of legislative intent to broadly prohibit any gambling for profit, as reflected in §246. The statutes may not be construed to permit a practice inconsistent with those intentions. Kaczorowski v. City of Baltimore, 309 Md. at 516. Accordingly, we believe that dealers and attendants at gambling events in Prince George's County are prohibited by §255(b)(1)'s prohibition against individual financial benefit from accepting tips, despite a lack of any parallel prohibition in §258B(a).5

3 In Opinion No. 85-001 at 3 (January 15, 1985) (unpublished), we considered whether a particular proposed bingo operation was permissible under either §255 or §258B, suggesting that the one governs occasional games and the other governs recurring games. Because we concluded that neither statute permitted the proposed operation, any assumed difference in their applicability had no real consequence for that opinion. In American Legion v. State, 294 Md. 1, 444 A.2d 842 (1982), the Court of Appeals approved the use of a tip jar, which was operated daily. Thereby, the court indicated that §255 does not restrict the frequency of nonprofit organizations' gambling activities.
4
In Gaither v. Cate, 156 Md. 254, 258-59, 144 A. 239 (1929), the Court of Appeals held that this principle applies to all statutes enacted to prevent gambling, whether they were enacted before or after §246.
5
We believe that the validity of this conclusion is not affected by the inclusion of a broad prohibition against individual financial benefit in §258B(b), which governs raffles in Prince George's County. The General Assembly may have determined that some peculiarity of raffles made it more necessary to reiterate the prohibition in that context than in the context of other fundraising events. In any case, we think that the legislative policy with regard to gambling, outlined above, is best effectuated by applying the prohibition contained in §255(b)(1) to all gambling for charitable purposes in

Note 5 continued
Prince George's County, and effectuation of the legislative purpose, aim, or policy is the goal of all statutory construction. Kaczorowski, 309 Md. at 514.

By the terms of §255(b)(1), gambling activities by nonprofit organizations are permitted only if they are conducted in conformance with the financial restrictions. Thus, gambling that does not conform to those restrictions is not authorized. Accordingly, an organization that knowingly permits its members to accept tips from patrons at its casino nights would not be engaged in authorized gambling activities.

                                    III
                               Conclusion

In summary, it is our opinion that, under §255(b)(1), dealers and attendants at nonprofit organizations' casino nights are not permitted to accept tips from patrons. Accordingly, organizations that knowingly permit their members to accept tips would be engaged in illegal gambling activities.

         J. Joseph Curran, Jr., Attorney General
         C.J. Messerschmidt, Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions & Advice