Are bingo eight-liner machines that pay out cards or gift certificates legal in Texas?

Plain-English summary

The Texas Lottery Commission's chair and a state representative both asked about a particular kind of amusement machine. These are eight-liner machines, which resemble slot machines, that instead of paying cash hand out coupons or tickets redeemable for bingo cards, card-minding devices, and pull-tab bingo, or gift certificates that can be used to buy the same. The question was whether those payouts count as "noncash merchandise prizes, toys, or novelties" under section 47.01(4)(B) of the Penal Code, which is the exception that keeps certain pure-amusement machines from being treated as illegal gambling devices.

The Attorney General concluded they do not qualify for the exception. Texas courts had already decided, over a long line of eight-liner cases, that awarding cash or credit for more play is an award of value rather than a noncash merchandise prize. The opinion treated bingo cards and pull-tab bingo the same way: a winner who gets free bingo play is receiving something that would otherwise cost money, which is closer to credit for further play than to a stuffed animal. Gift certificates redeemable at a bingo hall fell on the same side of the line, because the Texas Supreme Court in Hardy v. State had held that a gift certificate operates like legal tender and is not a noncash merchandise prize. Because the machines did not fit the exception, they were gambling devices, and possessing one with the intent to further gambling was generally an offense under section 47.06(a). The opinion also said whether a specific machine was "designed, made and adapted solely for bona fide amusement purposes" was a fact question it could not answer, while noting that a machine built to steer players into other bingo games would not be solely for amusement.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later Attorney General 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.

What the opinion meant for those who asked

The Texas Lottery Commission (what the opinion held): The opinion concluded that an eight liner awarding bingo cards or paper, card-minding devices, and pull-tab bingo, or a gift certificate redeemable for those items, was not rewarding the player exclusively with "noncash merchandise prizes, toys, or novelties" under section 47.01(4)(B), so it did not qualify for that exclusion.

Charities that conduct bingo (what the opinion held): The opinion concluded that the described machines were gambling devices generally prohibited under Texas gaming laws. Because of that conclusion, it did not separately decide whether the machines complied with chapter 2001 of the Occupations Code, the Bingo Enabling Act.

Prosecutors and law enforcement (what the opinion held): The opinion stated that a machine falling outside the section 47.01(4)(B) exception was a gambling device, possession of which with intent to further gambling was generally prohibited under section 47.06(a) of the Penal Code.

Representative Thompson (what the opinion did not decide): The opinion declined to separately address whether the machines complied with chapter 2001 of the Occupations Code, noting that whether a specific machine complied with that chapter's many requirements would involve multiple fact questions inappropriate for an attorney general opinion.

Anyone asking about a specific machine (what the opinion did not decide): Whether a particular machine was "designed, made and adapted solely for bona fide amusement purposes" was a fact question the opinion said this office could not decide.

Common questions

Were eight-liner machines that gave out bingo cards legal in Texas under this opinion?
The opinion concluded they were not. It treated such a machine as a gambling device, not an exempt amusement device, because the bingo cards and pull-tab bingo it awarded amounted to value or free play rather than a noncash merchandise prize.

What is the "fuzzy animal" exception in section 47.01(4)(B)?
It is the part of the gambling-device definition that excludes a contrivance made solely for bona fide amusement if it rewards the player only with noncash merchandise prizes, toys, or novelties (or a representation of value redeemable for those) worth no more than the lesser of $5 or ten times the cost of one play. The opinion called it the "fuzzy animal" exclusion.

Did it matter that the gift certificate could only be redeemed at a bingo hall?
The opinion said no. It reasoned that a gift certificate redeemable only at bingo establishments was still a medium of exchange redeemable for merchandise that would otherwise cost money, which made it analogous to the retail gift certificates the Texas Supreme Court had already held were not noncash merchandise prizes in Hardy.

Could a machine still count as "amusement only"?
The opinion said whether a machine was designed, made, and adapted solely for bona fide amusement was a fact question this office could not decide. It added that to the extent a machine was designed to encourage players to play other bingo games, it was not solely for amusement and was a gambling device.

Background and statutory framework

The Penal Code makes it an offense, with the intent to further gambling, to knowingly own, manufacture, transfer, or possess any gambling device. Tex. Penal Code Ann. § 47.06(a) (West 2003). A "gambling device" is broadly defined as a contrivance that, for consideration, gives the player a chance to obtain anything of value determined wholly or partly by chance, but the definition carves out, in paragraph (B), a contrivance made solely for bona fide amusement that rewards the player only with low-value noncash merchandise prizes, toys, or novelties. Tex. Penal Code Ann. § 47.01(4). The eight liners at issue awarded coupons or tickets redeemable for bingo cards, card-minding devices, and pull-tab bingo, or gift certificates redeemable for the same. A prior opinion had described an eight liner as a slot-machine-like device on which a player wins by matching symbols across eight lines, and the Bingo Enabling Act and Lottery Commission rules supplied the definitions of pull-tab bingo, bingo card/paper, and card-minding device. Tex. Att'y Gen. Op. No. GA-0527 (2007); Tex. Occ. Code Ann. § 2001.002(24) (West Supp. 2010); 16 Tex. Admin. Code § 402.301(a)(1) (2010); 16 Tex. Admin. Code § 402.302(a)(2)(A) (2010).

The opinion drew on a settled line of eight-liner litigation. Texas courts had consistently held that cash or credit for further play is an award of value, not a noncash merchandise prize falling under the section 47.01(4)(B) exclusion. Hardy v. State, 102 S.W.3d 123, 132 (Tex. 2003); In re Fifty-One Gambling Devices, 298 S.W.3d 768, 778 (Tex. App.-Amarillo 2009, pet. denied); Elmore v. State, 116 S.W.3d 809, 813 (Tex. App.-Fort Worth 2003, pet. ref'd). The opinion reasoned that awarding bingo cards or pull-tab bingo was analogous to awarding credit for further play, because a winner received the chance to play bingo for free that would otherwise have to be paid for at a commission-authorized price. Tex. Occ. Code Ann. § 2001.056(d) (West 2004). It then turned to gift certificates and relied on the Texas Supreme Court's holding that a gift certificate operates the same as legal tender in a retail establishment and is not a noncash merchandise prize, treating bingo-hall certificates as analogous because they too are a medium of exchange. Hardy, 102 S.W.3d at 131-132; State v. One Super Cherry Master Video 8-Liner Machine, 102 S.W.3d 132, 133 (Tex. 2003). The opinion added that the exclusion also requires a machine "designed, made and adapted solely for bona fide amusement purposes," and that whether these machines met that requirement was a fact question, though a machine built to steer players to other bingo games would not be solely for amusement. Because the machines fell outside the exclusion, they were gambling devices whose possession was generally prohibited under section 47.06(a), and the opinion did not separately analyze chapter 2001 compliance.

Citations

Statutes and rules:

• Tex. Penal Code Ann. § 47.06(a) (West 2003)
• Tex. Penal Code Ann. § 47.01(4)
• Tex. Penal Code Ann. § 47.01(4)(B) (West 2003)
• Tex. Occ. Code Ann. § 2001.056(d) (West 2004)
• Tex. Occ. Code Ann. § 2001.002(24) (West Supp. 2010)
• 16 Tex. Admin. Code § 402.301(a)(1) (2010)
• 16 Tex. Admin. Code § 402.302(a)(2)(A) (2010)

Cases and opinions:

• Hardy v. State, 102 S.W.3d 123, 132 (Tex. 2003)
• In re Fifty-One Gambling Devices, 298 S.W.3d 768, 778 (Tex. App.-Amarillo 2009, pet. denied)
• Elmore v. State, 116 S.W.3d 809, 813 (Tex. App.-Fort Worth 2003, pet. ref'd)
• State v. One Super Cherry Master Video 8-Liner Machine, 102 S.W.3d 132, 133 (Tex. 2003)
• Tex. Att'y Gen. Op. No. GA-0527 (2007)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0812
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2010/ga0812.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

October 22, 2010

Ms. Mary Ann Williamson, Chair Opinion No. GA-0812
Texas Lottery Commission
Post Office Box 16630 Re: Whether bingo gift certificates and similar
Austin, Texas 78761-6630 items constitute "noncash merchandise prizes,
toys or novelties" under section 47.01(4)(B) of the
The Honorable Senfronia Thompson Penal Code and whether certain business
Chair, Committee on Local and Consent practices, which may be used by charities that
Calendars conduct bingo to maximize their net proceeds,
Texas House of Representatives comply with chapter 2001, Occupations Code, and
Post Office Box 2910 other applicable law (RQ-0884-GA)
Austin, Texas 78768-2910

Dear Ms. Williamson and Representative Thompson:

You each have submitted questions asking about the legality, under Texas gaming laws, of amusement machines that award bingo merchandise. Representative Thompson asks whether the operation of such machines "compl[ies] with Chapter 2001, Occupations Code, and other applicable law."[1] Ms. Williamson asks whether bingo cards, card-minding devices, and pull-tab bingo, or a gift certificate for the same, "are considered 'noncash merchandise prizes, toys or novelties' under Tex. Penal Code § 47.01(4)(B)."[2] Because of the similar nature of your requests, we have combined them and provide this single response.

Under the Penal Code, "[a] person commits an offense if, with the intent to further gambling, he knowingly owns, manufactures, transfers, or possesses any gambling device." TEX. PENAL CODE ANN. § 47.06(a) (West 2003). "Gambling device" is defined as

any electronic, electromechanical, or mechanical contrivance not excluded under Paragraph (B) that for a consideration affords the player an opportunity to obtain anything of value, the award of which is determined solely or partially by chance, even though accompanied by some skill, whether or not the prize is automatically paid by contrivance. The term:

(A) includes, but is not limited to, gambling device versions of bingo, keno, blackjack, lottery, roulette, video poker, or similar electronic, electromechanical, or mechanical games, or facsimiles thereof, that operate by chance or partially so, that as a result of the play or operation of the game award credits or free games, and that record the number of free games or credits so awarded and the cancellation or removal of the free games or credits; and

(B) does not include any electronic, electromechanical, or mechanical contrivance designed, made, and adapted solely for bona fide amusement purposes if the contrivance rewards the player exclusively with noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less.

Id. § 47.01(4). You both explain that some amusement machines, commonly referred to as eight liners, award coupons or tickets that are redeemable for bingo cards, card-minding devices, and pull-tab bingo.[3] See Williamson Request Letter at 2; Thompson Request Letter at 1. Some also award bingo gift certificates that can be used to purchase the same. Williamson Request Letter at 2. Your requests therefore require us to determine whether these awards constitute "noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less." TEX. PENAL CODE ANN. § 47.01(4)(B) (West 2003).

Substantial litigation has arisen in Texas surrounding the rewards provided through eight liner machines and whether those rewards constitute noncash merchandise prizes. Relevant to your requests, courts have consistently concluded that cash or credit to be used for further play is an award of value to the recipient and not a noncash merchandise prize, toy, or novelty falling under the "fuzzy animal" exclusion of section 47.01(4)(B). Hardy v. State, 102 S.W.3d 123, 132 (Tex. 2003); In re Fifty-One Gambling Devices, 298 S.W.3d 768, 778 (Tex. App.-Amarillo 2009, pet. denied) (concluding that rewards of tickets that were then converted to cash by an employee and deposited into a machine for additional play were not noncash merchandise prizes); Elmore v. State, 116 S.W.3d 809, 813 (Tex. App.-Fort Worth 2003, pet. ref'd) (concluding that "[c]ash to be used for play on another machine is not a noncash merchandise prize").

Awards for bingo cards or pull-tab bingo are analogous to awarding credit for further play. Although the winners may not receive awards for further play on the same machine, winners on the eight-liner machines receive the opportunity to play bingo or pull-tab bingo for free when they would otherwise be required to pay for that opportunity. See TEX. OCC. CODE ANN. § 2001.056(d) (West 2004) (providing that a bingo card may not be sold "at a price other than a price authorized by the commission or a schedule adopted by the commission"). Because Texas courts have consistently concluded that an award for further play does not fall within the statutory exception to gambling device, we conclude that an eight liner that awards bingo cards, card-minding devices and pull-tab bingo is not rewarding "the player exclusively with noncash merchandise prizes, toys, or novelties."[4] TEX. PENAL CODE ANN. § 47.01(4)(B) (West 2003).

Furthermore, to qualify for the gambling device exclusion in section 47.01(4)(B), the eight liners at issue must be "designed, made and adapted solely for bona fide amusement purposes." Id. (emphasis added). By awarding bingo cards, card-minding devices, and pull-tab bingo, or gift certificates for the same, an additional effect of the eight liners is to encourage individuals playing them to play other bingo games as well. Whether the machines were designed, made and adapted for that purpose will be a fact question that this office cannot decide. However, to the extent that the eight liners were designed, made and adapted for the purpose of encouraging participants to play other bingo games, they are not solely for amusement and thus are gambling devices.

Ms. Williamson also asks whether a gift certificate issued by an organization licensed to conduct bingo that is redeemable for bingo cards, card-minding devices and pull-tab bingo is considered a noncash merchandise prize. Williamson Request Letter at 1. A number of Texas courts have considered the legal status of eight-liner machines that award prizes such as gift certificates, or tickets redeemable at various retail establishments. Those courts determined that such machines are gambling devices and do not meet the requirement for exclusion under section 47.01(4)(B). See Hardy, 102 S.W.3d at 131 (addressing eight liners that awarded five-dollar gift certificates, redeemable for merchandise at Wal Mart); State v. One Super Cherry Master Video 8-Liner Machine, 102 S.W.3d 132, 133 (Tex. 2003) (concluding that eight liners that dispense gift certificates redeemable at local retailers do not, as a matter of law, meet the gambling device exclusion under section 47.01(4)(B)). In concluding that such eight liners were gambling devices, the Texas Supreme Court explained that the gift certificate "reward operates in the same manner as legal tender in a retail establishment, [and] it does not qualify as a noncash merchandise prize, toy or novelty item." Hardy, 102 S.W.3d at 132. While the gift certificates that you describe are redeemable only at bingo establishments, they are analogous to the gift certificates addressed in Hardy in that they are a medium of exchange and are redeemable for merchandise that would otherwise cost money. See id. Like the gift certificates redeemable at other retail establishments, gift certificates used to purchase bingo cards, card-minding devices, and pull-tab bingo do not constitute noncash merchandise prizes. Thus, an eight liner that issues such certificates does not fall within the exception of section 47.01(4)(B) and is a gambling device, possession of which is generally prohibited under subsection 47.06(a) of the Penal Code.[5]

SUMMARY

Texas courts have repeatedly considered the legal status of eight-liner machines that award gift certificates redeemable at retail establishments or tickets redeemable for further play and have determined that those machines are gambling devices and do not meet the requirements for exclusion under subsection 47.01(4)(B) of the Penal Code. Similarly, a device that awards bingo cards or paper, card-minding devices and pull-tab bingo, or gift certificates redeemable for the same, is not rewarding the player exclusively with "noncash merchandise prizes, toys, or novelties," under subsection 47.01(4)(B) of the Penal Code.

DANIEL T. HODGE
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Virginia K. Hoelscher
Assistant Attorney General, Opinion Committee

[1] Thompson Request Letter at 1 (available at http://www.texasattorneygeneral.gov).

[2] Williamson Request Letter at 1 (available at http://www.texasattorneygeneral.gov).

[3] This office has previously explained that an eight liner "is an electronic device, resembling a slot machine, on which a person wins by 'matching symbols in one of eight lines - three horizontal, three vertical, and two diagonal.'" Tex. Att'y Gen. Op. No. GA-0527 (2007) at 2 (quoting Hardy v. State, 102 S.W.3d 123, 125 (Tex. 2003)). The Bingo Enabling Act defines "pull-tab bingo" as "a form of bingo played using tickets with perforated break-open tabs, made of paper or paper products, the face of which is covered or otherwise hidden from view to conceal numbers, letters, or symbols, some of which have been designated in advance as prize winners." TEX. OCC. CODE ANN. § 2001.002(24) (West Supp. 2010). The Texas Lottery Commission has defined "bingo card/paper" as "[a] hard card, disposable bingo card/paper, shutter card, or any other bingo card/paper approved by the Commission." 16 TEX. ADMIN. CODE § 402.301(a)(1) (2010) (Tex. Lottery Comm'n, Bingo Card/Paper). It has defined "card-minding device" as "[a]n electronic or mechanical device, either portable or fixed-base, that is used by a bingo player to mark representations of bingo card faces stored in the device." Id. § 402.302(a)(2)(A) (2010) (Tex. Lottery Comm'n, Card-Minding Systems).

[4] Your request suggests that the eight liners at issue each award "bingo cards or paper, electronic or mechanical card-minding devices, and pull-tab bingo" or gift certificates redeemable for the same. Williamson Request Letter at 1 (emphasis added). We therefore address whether these items collectively constitute noncash merchandise prizes, toys, or novelties.

[5] Because we conclude that amusement machines that award bingo cards, card-minding devices and pull-tab bingo, or gift certificates redeemable for the same, are gambling devices generally prohibited under Texas gaming laws, we do not separately address whether they otherwise comply with chapter 2001 of the Occupations Code. We note, however, that whether a specific machine complied with the many requirements found in that chapter would involve multiple fact questions inappropriate for an attorney general opinion.