WESTERN TELCON, INC. et al., Plaintiffs and Appellants, v. CALIFORNIA STATE LOTTERY COMMISSION, Defendant and Respondent; California–Nevada Indian Gaming Association, Intervenor and Respondent.
The present case involves a dispute among California's gambling interests. Plaintiffs, Western Telcon, Inc. and California Horsemen's Benevolent & Protective Association (collectively hereafter referred to as the Benevolent Association), appeal from a summary judgment in favor of defendant, California State Lottery, and intervenor, California–Nevada Indian Gaming Association. The trial court entered summary judgment 1 determining that the California State Lottery could lawfully operate a form of gambling entitled “keno.” For the reasons expressed in this opinion, we affirm the judgment because keno as operated by the California State Lottery fully complies with the provisions of Government Code 2 sections 8880.12 and 8880.28 which were adopted by the voters in 1984 as part of Proposition 37.3
II. FACTUAL AND PROCEDURAL BACKGROUND
In 1984, the voters adopted Proposition 37 which legalized various forms of gambling and was entitled, “The California State Lottery Act of 1984.” (§ 8800.) The gambling liberalization initiative created the California State Lottery Commission (the Commission). Pursuant to its statutorily mandated duty to adopt rules specifying the types of “lottery games to be conducted” by the state (§ 8880.28, subd. (a)), the commission adopted “Keno Regulations” on October 14, 1992.
Keno, a form of gambling, was described in the regulations as follows, “This on-line game shall be known as KENO, a number(s) match game.” The objective of the game is described in the regulations as follows: “The objective of a KENO draw is to randomly select twenty (20) unique winning numbers from a field of eighty (80) numbers (one (1) through eighty (80) inclusive) via computerized draw equipment. These twenty (20) numbers shall constitute the set of winning numbers for that draw.” The “on-line” nature of keno relates to the use of computers and video monitors. Gamblers play keno throughout the state at places where computer terminals and video monitors are operated by a person or organization described in the regulations as a “ ‘Retailer’ or ‘Lottery Game Retailer.’ ” At the time of the summary judgment motions hearing, there were nearly 5800 locations with the computer terminals and video monitors in California where gamblers could play keno.
The selection of the numbers and placing of wagers occurs as follows. The retailer provides the gambler with a “playslip” with 80 numbers on it. The numbers are in rows of 10 on the playslip. The keno gambler selects between 1 and 10 numbers from the 80 on the playslip. The gambler then places the playslip in the computer terminal. Also, the bettor can have an employee of the retailer place the playslip in the computer terminal. After the gambler pays what is referred to in the regulations as a “wager” of “$1, $2, $3, $4, $5, $10, or $20,” the playslip is placed in the computer and a ticket is issued. The ticket reflects the numbers selected by the gambler and the amount of the wager as well as other information concerning the retailer and the date the bet was placed.
In the alternative, the gambler can allow the computer terminal on the retailer's premises to select 1 to 10 numbers. This is called “Quick Pick.” The gambler marks on the playslip that she or he desires to use the Quick Pick process. The playslip is then inserted in the terminal, again either by the bettor or the retailer. The Quick Pick numbers are then selected randomly by the computer. The computer plays a materially different role when the Quick Pick process is utilized. When the gambler marks her or his choices on the playslip, there is no random selection of numbers to go on the ticket. However, when the Quick Pick process is utilized, the computer by chance selects the numbers to be printed on the ticket.
A bettor can wager additional money on the same ticket. For example, a gambler can wager $1 on a ticket; but then hypothetically use the same ticket in up to 100 consecutive draws. The ticket, issued by the computer terminal, is the only valid receipt for claiming a prize. The playslip is inserted into the same computer terminal that issues the ticket.
Approximately every five minutes, a computer operated by the commission randomly, in the language of the regulations, “draws” 20 numbers. The regulations state, “These twenty (20) numbers shall constitute the set of winning numbers for that draw.” It is these 20 numbers that the bettor hopes matches the selections on the ticket. If there are a sufficient number of matches, the bettor receives a financial return on the wager. Approximately every five minutes the video screen operated by the retailer displays a new set of winning numbers. The computer that selects the 20 winning numbers that are displayed on the video screen is separate from the system that operates the terminals where playslips are entered and tickets issued.
Unless a bettor has chosen to use a ticket in consecutive draws and paid for that right, a gambler only has approximately five minutes to have tickets issued for the next draw. This is because once the video screen begins to display the 20 numbers, tickets subsequently issued only apply to the next draw which will occur in around 5 minutes. The bettors who have selected enough numbers displayed on the video screen can be immediately paid by the retailer in the sum of their winnings, up to $599. The bettor submits the ticket with the winning numbers to the retailer who then pays up to $599 directly to the person holding the ticket with the winning numbers. The computer terminal does not itself pay out any money. The ticket bearer may likewise claim sums up to $599 from a lottery office. All winning tickets where the amount due to the gambler exceeds $599 must be redeemed from a lottery office. Depending on the amount of numbers selected by the bettor, the financial return can range from $250,000 to $1 for each dollar wagered.
A. Standard of review
The Benevolent Association has appealed from the grant of a summary judgment. The parties essentially agree that the legality of the commission's operation of keno is a legal issue involving the construction of statutes which is independently reviewed by this court. (Burden v. Snowden (1992) 2 Cal.4th 556, 562, 7 Cal.Rptr.2d 531, 828 P.2d 672; California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692, 699, 170 Cal.Rptr. 817, 621 P.2d 856.) Further, we review the decision to grant summary judgment by the trial court de novo. (Jambazian v. Borden (1994) 25 Cal.App.4th 836, 844, 30 Cal.Rptr.2d 768; Wilson v. Blue Cross of So. California (1990) 222 Cal.App.3d 660, 670, 271 Cal.Rptr. 876.)
Because the present case involves the construction of an initiative adopted by the voters which amended both the California Constitution and statutory law, we apply the following standard of review: “We begin with the fundamental rule that our primary task is to determine the lawmakers' intent. [Citation.] In the case of a constitutional provision adopted by the voters, their intent governs. [Citations.] To determine intent, ‘ “The court turns first to the words themselves for the answer.” ’ [Citation.] ‘If the language is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature (in the case of a statute) or of the voters (in the case of a provision adopted by the voters).’ [Citation.]” (Delaney v. Superior Court (1990) 50 Cal.3d 785, 798, 268 Cal.Rptr. 753, 789 P.2d 934; accord, Freedom Newspapers, Inc. v. Orange County Employees Retirement System (1993) 6 Cal.4th 821, 826, 25 Cal.Rptr.2d 148, 863 P.2d 218.) However, the literal meaning of a statute must be in accord with its purpose as our Supreme Court noted in Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 658–659, 25 Cal.Rptr.2d 109, 863 P.2d 179, as follows: “We are not prohibited ‘from determining whether the literal meaning of a statute comports with its purpose or whether such a construction of one provision is consistent with other provisions of the statute. The meaning of a statute may not be determined from a single word or sentence; the words must be construed in context, and provisions relating to the same subject matter must be harmonized to the extent possible. [Citation.] Literal construction should not prevail if it is contrary to the legislative intent apparent in the [statute.] [Citations.] ․’ [Citation.]” In Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735, 248 Cal.Rptr. 115, 755 P.2d 299, our Supreme Court added: “The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act. [Citations.] An interpretation that renders related provisions nugatory must be avoided [citation]; each sentence must be read not in isolation but in the light of the statutory scheme [citation]; ․” In evaluating the issues of statutory interpretation raised by the parties, we may not second-guess the wisdom of the policy decisions made by the voters. (Rhiner v. Workers' Comp. Appeals Bd. (1993) 4 Cal.4th 1213, 1226, 18 Cal.Rptr.2d 129, 848 P.2d 244; Delaney v. Superior Court, supra, 50 Cal.3d at p. 805, 268 Cal.Rptr. 753, 789 P.2d 934.)
B. The statutory and constitutional scheme
The initiative enacted article IV, section 19, subdivision (a) of the California Constitution 4 which provides, “The Legislature has no power to authorize lotteries and shall prohibit the sale of lottery tickets in the State.” However, the initiative also adopted article IV, section 19, subdivision (d) which states, “Notwithstanding subdivision (a), there is authorized the establishment of a California State Lottery.” In compliance with article IV, section 19, subdivision (d), the initiative enacted a comprehensive set of statutes. (§§ 8880–8880.71.) The California State Lottery was created by section 8880.15 and it is regulated by the commission. (§ 8880.24.) In 1984, the commission was charged with commencing lottery operations within 135 days after the voters' approval of the initiative. (§ 8880.25, as orig. enacted.) Further, the commission was to promulgate regulations specifying the forms of gambling that would be available to the public. Section 8880.28, subdivision (a), which is at the heart of the issues raised in the present appeal, states: “The commission shall promulgate regulations specifying the types of lottery games to be conducted by the lottery, provided: [¶] (1) No lottery game may use the theme of bingo, roulette, dice, baccarat, blackjack, Lucky 7's, draw poker, slot machines, or dog racing. [¶] (2) In lottery games utilizing tickets, each ticket in these games shall bear a unique number distinguishing it from every other ticket in that game; and no name of an elected official shall appear on these tickets. [¶] (3) In games utilizing computer terminals or other devices, no coins or currency shall be dispensed to players from these computer terminals or devices.” The words “lottery games” in section 8880.28 are specifically defined in section 8880.12 as follows, “ ‘Lottery Game’ means any procedure authorized by the Commission whereby prizes are distributed among persons who have paid, or unconditionally agreed to pay, for tickets or shares which provide the opportunity to win such prizes.” (Italics added.) Virtually all of the issues raised by the parties are resolved by the common sense application of sections 8880.12 and 8880.28 to the previously described Keno Regulations.
C. The effect of sections 8880.12 and 8880.28
Keno as described in the Keno Regulations falls clearly within the definition of a form of a lottery game permissible under section 8880.12. Keno is a “procedure” authorized by the commission. Money “prizes” are “distributed.” In order to win money, the bettor must have “paid” for a ticket or “tickets.” The ticket provides the wagerer with the “opportunity to win such prizes” as a result of the draws held every five minutes or thereabouts. Further, the undisputed evidence indicates that keno does not fall within any of the exceptions to the power of the commission to promulgate regulations specifying the types of permissible lottery games set forth in section 8880.28. Keno does not “use the theme of bingo, roulette, dice, baccarat, blackjack, Lucky 7's, draw poker, slot machines, or dog racing.” (§ 8880.28, subd. (a)(1).) In compliance with the requirements of section 8880.28, subdivision (a)(2), the tickets issued by the computer terminals at the retailers' places of business contain unique numbers. Further, no elected officials' names appear on the tickets issued by the computer terminal. (§ 8880.28, subd. (a)(2).) Finally, in compliance with section 8880.28, subdivision (a)(3), the computer terminal does not dispense coins or currency. As noted previously, the retailer can pay off up to $599 to the bettor; however, the computer terminal only issues tickets—no coins or currency. Accordingly, keno, as authorized by the Keno Regulations, fully complies with sections 8880.12 and 8880.28.
D. The Benevolent Association's casino argument
The Benevolent Association argues that keno is unlawful because, when it is harmonized with provisions of Proposition 37 other than sections 8880.12 and 8880.28, the regulations at issue contravene the initiative's prohibition against casino gambling. The Benevolent Association cites to three provisions of Proposition 37. First, the Benevolent Association relies on article IV, section 19, subdivision (e) which states, “The Legislature has no power to authorize, and shall prohibit casinos of the type currently operating in Nevada and New Jersey.” Second, the Benevolent Association cites to section 8880.6 which provides, “Sections 320, 321, 322, 323, 324, 325, 326, and 328 of the Penal Code do not apply to the California State Lottery or its operations. This exemption applies only to the operators of the Lottery and shall not be construed to change existing law relating to lotteries operated by persons or entities other than the Lottery.” 5 Finally, the Benevolent Association points to the previously discussed language in section 8880.28 subdivision (a)(1) which requires the commission to promulgate regulations provided none of the gambling formats “use the theme of bingo, roulette, dice, baccarat, blackjack, Lucky 7's, draw poker, slot machines, or dog racing.” The Benevolent Association argues this court must harmonize the foregoing provisions which prohibit casino gambling with sections 8880.12 and 8880.28 which, as previously noted, specifically authorize the commission to promulgate regulations authorizing formats such as keno.
We agree that we have a duty to harmonize the provisions of Proposition 37 in order to carry out the voters' intent (California Mfrs. Assn. v. Public Utilities Com. (1979) 24 Cal.3d 836, 844, 157 Cal.Rptr. 676, 598 P.2d 836; Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222, 230, 110 Cal.Rptr. 144, 514 P.2d 1224); however, there is nothing to harmonize. The provisions of article IV, section 19, subdivision (e), section 8880.6, and section 8880.28 do not prohibit keno as it is described in the regulations. The establishment of keno pursuant to the regulations does not create gambling casinos. Keno as authorized by Proposition 37 does not use the “theme of bingo, roulette, dice, baccarat, blackjack, Lucky 7's, draw poker, slot machines, or dog racing.” (§ 8880.28, subd. (a)(1)); rather the regulations at issue draw on the theme of keno, something not proscribed by section 8880.28, subdivision (a)(1). Finally, there is no merit to the argument that section 8880.6, which makes certain prohibitions against lotteries inapplicable to the California State Lottery, is indicative of an intent to prohibit keno.6
E. The Benevolent Association's banking game argument
The Benevolent Association contends that keno is a statutorily prohibited banking game. We need not address the question of whether keno is a banking game as defined in Penal Code section 330.7 If it is, then when we harmonize Penal Code section 330 and Proposition 37: it is apparent the more specific provision, Proposition 37, is an exception to the banking game prohibition in Penal Code section 330. Under traditional rules of statutory interpretation, we give effect to the later enacted provision, which in this case is Proposition 37, because banking games have been prohibited since 1872. (Pacific Legal Foundation v. Unemployment Ins. Appeals Bd. (1981) 29 Cal.3d 101, 115, 172 Cal.Rptr. 194, 624 P.2d 244; Fuentes v. Workers' Comp. Appeals Bd. (1976) 16 Cal.3d 1, 7, 128 Cal.Rptr. 673, 547 P.2d 449; Los Angeles Police Protective League v. City of Los Angeles (1994) 27 Cal.App.4th 168, 179, 32 Cal.Rptr.2d 574; Fleming v. Kent (1982) 129 Cal.App.3d 887, 891, 181 Cal.Rptr. 361.) The Penal Code section 330 prohibition against banking games does not apply to Keno.
F. The Benevolent Association's slot machine argument
The Benevolent Association argues that keno is unlawful because the terminal that accepts the playslip and issues the ticket is a slot machine within the meaning of Penal Code section 330b, subdivision (2). Penal Code section 330b, subdivision (2) broadly defines a prohibited slot machine as follows: “Any machine, apparatus or device is a slot machine or device within the provisions of this section if it is one that is adapted, or may readily be converted into one that is adapted, for use in such a way that, as a result of the insertion of any piece of money or coin or other object, or by any other means, such machine or device is caused to operate or may be operated, and by reason of any element of hazard or chance or of other outcome of such operation unpredictable by him, the user may receive or become entitled to receive any piece of money, credit, allowance or thing of value or additional chance or right to use such slot machine or device, or any check, slug, token or memorandum, whether of value or otherwise, which may be exchanged for any money, credit, allowance or thing of value, or which may be given in trade, irrespective of whether it may, apart from any element of hazard or chance or unpredictable outcome of such operation, also sell, deliver or present some merchandise, indication of weight, entertainment or other thing of value.” The computer terminal falls within the broad description of a slot machine in Penal Code section 330b, subdivision (2) when it is used by the gambler to make a Quick Pick of numbers. The computer terminal, when used with the Quick Pick format, falls within the ambit of the language in Penal Code section 330b, subdivision (2) concerning “[a]ny machine, apparatus or device.” Further, the terminal is “adapted” so that “as a result of the insertion of any ․ object ․ such machine or device is caused to operate․” Moreover, when operating in the Quick Pick format, by “reason of any element of hazard or chance or of other outcome of such operation unpredictable by him, the user may receive ․ any ․ memorandum, whether of value or otherwise․” The gambler who pays for a Quick Pick receives a ticket which is a memorandum “which may be exchanged for any money” if winning numbers are printed on it by the terminal. The Quick Pick selection method is a random selection process. However, if the bettor selects the numbers, rather than using the Quick Pick method, then the terminal prints out a ticket with the numbers selected by the gambler on the playslip. When the Quick Pick process is not used, the terminal itself does not contain “any element of hazard or chance or of other outcome” which is unpredictable to the bettor. Hence, insofar as the Benevolent Association is contending that all use of the computer terminal involves a slot machine, such an argument has no merit. However, to the extent the Benevolent Association is contending that the Quick Pick process, whereby the bettor inserts a playslip into the computer and a random selection of numbers is made which is printed on the ticket, such an argument is correct in its analysis.8 (Cf. Score Family Fun Center, Inc. v. County of San Diego (1990) 225 Cal.App.3d 1217, 1220–1221, 275 Cal.Rptr. 358; Merandette v. City and County of San Francisco (1979) 88 Cal.App.3d 105, 114, 151 Cal.Rptr. 580.)
Nonetheless, this fact by itself does not invalidate the Quick Pick process. As discussed previously, section 8880.28, subdivision (a) provides in pertinent part: “The commission shall promulgate regulations specifying the types of lottery games to be conducted by the lottery, provided: [¶] (1) No lottery game may use the theme of ․ slot machines․” Because the language “theme of ․ slot machines” is sufficiently ambiguous, we may engage in statutory construction. (Legislature v. Eu (1991) 54 Cal.3d 492, 504, 286 Cal.Rptr. 283, 816 P.2d 1309; Lungren v. Deukmejian, supra, 45 Cal.3d at p. 735, 248 Cal.Rptr. 115, 755 P.2d 299.) A series of considerations lead us to conclude that when a computer terminal issues a Quick Pick ticket, it is not using “the theme of ․ slot machines.” To begin with, we look to the statutory language. (Adoption of Kelsey S. (1992) 1 Cal.4th 816, 826, 4 Cal.Rptr.2d 615, 823 P.2d 1216.) Section 8880.28, subdivision (a)(1) does not prohibit computer terminals which fall within the scope of Penal Code section 330b, subdivision (2); rather it prohibits a game which uses the “theme” of a slot machine. Further, the statutorily described authority of the commission to devise gambling methods is extensive. The initiative describes a “Lottery Game” as “any procedure” where prizes are distributed among persons who have paid for the opportunity to win. (§ 8880.12.) Our Supreme Court has defined the term “any” as follows: “The term ‘any’ (particularly in a statute) means ‘all’ or ‘every.’ [Citation.] [‘From the earliest days of statehood we have interpreted ‘any’ to be broad, general and all embracing.']; [Citations.]” (Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 38, 283 Cal.Rptr. 584, 812 P.2d 931; accord, California State Auto. Assn. Inter–Ins. Bureau v. Warwick (1976) 17 Cal.3d 190, 195, 130 Cal.Rptr. 520, 550 P.2d 1056.) Certainly, the use of a computer terminal to issue tickets with randomly picked numbers falls within the scope of “any procedure” when that term is broadly and generally construed. Moreover, the limiting language in section 8880.28, subdivision (a)(1) concerning the “theme of ․ slot machines” is a proviso; i.e., an exception or limitation on the operation of the powers of the commission to enact regulations establishing “any procedure” where prizes are distributed among persons who have paid for a chance to win such. Also, since the language “theme ․ of slot machines” is a proviso, it must be “strictly construed.” (Lungren v. Deukmejian, supra, 45 Cal.3d at pp. 735–736, 248 Cal.Rptr. 115, 755 P.2d 299; People ex rel. S.F. Bay etc. Com. v. Town of Emeryville (1968) 69 Cal.2d 533, 543, 72 Cal.Rptr. 790, 446 P.2d 790; Kirkwood v. Bank of America (1954) 43 Cal.2d 333, 341, 273 P.2d 532.) Additionally, because the language “theme of ․ slot machines” is ambiguous, reference to the ballot statement prepared by the proponents of Proposition 37 is appropriate to determine the voters' intent. (Davis v. City of Berkeley (1990) 51 Cal.3d 227, 237, fn. 4, 272 Cal.Rptr. 139, 794 P.2d 897; Delaney v. Superior Court, supra, 50 Cal.3d at p. 802, 268 Cal.Rptr. 753, 789 P.2d 934.) The argument in favor of Proposition 37 referred to on-line computers when it noted: “There are many lottery games: some have instant winners, others have periodic drawings. The Lottery Commission has the flexibility to conduct a variety of lottery games using any technology, including traditional tickets, on-line computers, and instant game video terminals (which can't dispense cash or have fruit symbols like a slot machine).” (Ballot Pamp. argument in favor of Proposition 37 as presented to the voters, Gen.Elec. (Nov. 6, 1984).) Finally, other provisions of the initiative recognize that computer terminals would be part of the wagering options made available by the commission to bettors. In construing a statute, we look to the entire statutory scheme. (Lakin v. Watkins Associated Industries, supra, 6 Cal.4th at p. 659, 25 Cal.Rptr.2d 109, 863 P.2d 179; In re Catalano (1981) 29 Cal.3d 1, 10–11, 171 Cal.Rptr. 667, 623 P.2d 228.) Section 8880.28, subdivision (a)(3), which like subdivision (a)(1) is a limitation of the commission's power to promulgate regulations adopting “any procedure” allowing for prizes, states, “In games utilizing computer terminals or other devices, no coins or currency shall be dispensed to players from these computer terminals or devices.” Section 8880.30, subdivision (c) states, “It is the intent of this chapter that the commission may use any of a variety of existing or future methods or technologies in determining winners.” The foregoing statutory construction considerations lead us to the following conclusions: when narrowly construed, the language concerning “theme ․ of slot machines” in section 8880.28, subdivision (a)(1) was not intended to prohibit the use of computer technologies as means of determining winners; this is true even though the terminal is a slot machine within the meaning of Penal Code section 330b, subdivision (2); the strictly construed language of section 8880.28, subdivision (a)(3) prohibits the use of terminals when coins or currency are discharged from the computer, something that never happens with the keno format; the commission utilizing its broad powers to develop betting formats could use the Quick Pick process so long as the terminal which may otherwise be a slot machine did not have symbols “like a slot machine.” (Ballot Pamp. argument in favor of Proposition 37 as presented to the voters, Gen.Elec. (Nov. 6, 1984).) Properly construed, section 8880.28, subdivision (a) does not bar the Quick Pick procedure referred to in the regulations adopted by the commission.
G. The Benevolent Association's Penal Code section 319 argument
The Benevolent Association argues that the keno regulations are invalid because the 1984 initiative did not repeal Penal Code section 319 which states, “A lottery is any scheme for the disposal or distribution of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property or a portion of it, or for any share or any interest in such property, upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle, or gift enterprise, or by whatever name the same may be known.” The Benevolent Association relies upon section 8880.6 which, as previously noted, states that Penal Code sections 320, 321, 322, 323, 324, 325, 326, and 328 do not apply to the “California State lottery or its operations” and reasons that voters intended to maintain the prohibition against lotteries. However, Penal Code section 319 does not prohibit a lottery; it merely defines such. Proposition 37, a later enacted provision of law, was intended to authorize the commission to adopt “any procedure” (§ 8880.12) which involves “existing or future methods or technologies in determining winners” (§ 8880.30, subd. (c)) so long as it did not fall within the ambit of: the proviso set forth in section 8880.28; other provisions of section 8880 et seq.; or article IV, section 19. Penal Code section 319 is a definitional statute and it cannot be construed to prohibit more specific and later enacted provisions of law from having full force and effect under the circumstances of the present case. (Pacific Legal Foundation v. Unemployment Ins. Appeals Bd., supra, 29 Cal.3d at p. 115, 172 Cal.Rptr. 194, 624 P.2d 244; Fuentes v. Workers' Comp. Appeals Bd., supra, 16 Cal.3d at p. 7, 128 Cal.Rptr. 673, 547 P.2d 449.)
The judgment is affirmed. The California State Lottery and the California–Nevada Indian Gaming Association shall each recover their costs on appeal jointly and severally from Western Telcon, Inc. and the California Horsemen's Benevolent & Protective Association, Inc.
1. The issues discussed in the present case were raised in cross-summary judgment motions. Because we conclude the state's motion was correctly granted, implicit in our decision is the determination the Benevolent Association's summary judgment request was correctly denied.
FN2. Unless otherwise indicated, all future statutory references are to the Government Code.. FN2. Unless otherwise indicated, all future statutory references are to the Government Code.
3. Our conclusions are premised solely on the grounds discussed in this opinion. We do not address nor do we decide other questions including, but not limited to: (1) the effect of Proposition 37 on the rights of gambling operators on “Indian lands” within the provisions of 25 United States Code, section 2701 et seq.; the extent to which the Legislature may expand the provisions of Proposition 37; or whether the proscription against gambling casinos in the initiative may render keno invalid if utilized in conjunction with other forms of gambling at a single location.
4. All future references to an article are to the California Constitution.
5. Penal Code section 320 provides, “Every person who contrives, prepares, sets up, proposes, or draws any lottery, is guilty of a misdemeanor.” Penal Code section 321 states, “Every person who sells, gives, or in any manner whatever, furnishes or transfers to or for any other person any ticket, chance, share, or interest, or any paper, certificate, or instrument purporting or understood to be or to represent any ticket, chance, share, or interest in, or depending upon the event of any lottery, is guilty of a misdemeanor.” Penal Code section 322 prohibits the following, “Every person who aids or assists, either by printing, writing, advertising, publishing, or otherwise in setting up, managing, or drawing any lottery, or in selling or disposing of any ticket, chance, or share therein, is guilty of a misdemeanor.” Penal Code section 323 provides, “Every person who opens, sets up, or keeps, by himself or by any other person, any office or other place for the sale of, or for registering the number of any ticket in any lottery, or who, by printing, writing, or otherwise, advertises or publishes the setting up, opening, or using of any such office, is guilty of a misdemeanor.” Penal Code section 324 states, “Every person who insures or receives any consideration for insuring for or against the drawing of any ticket in any lottery whatever, whether drawn or to be drawn within this State or not, or who receives any valuable consideration upon any agreement to repay any sum, or deliver the same, or any other property, if any lottery ticket or number of any ticket in any lottery shall prove fortunate or unfortunate, or shall be drawn or not be drawn, at any particular time or in any particular order, or who promises or agrees to pay any sum of money, or to deliver any goods, things in action, or property, or to forbear to do anything for the benefit of any person, with or without consideration, upon any event or contingency dependent on the drawing of any ticket in any lottery, or who publishes any notice or proposal of any of the purposes aforesaid, is guilty of a misdemeanor.”Penal Code section 325 sets forth the forfeiture and attachment remedies available to law enforcement in combatting unlawful lotteries as follows: “All moneys and property offered for sale or distribution in violation of any of the provisions of this chapter are forfeited to the state, and may be recovered by information filed, or by an action brought by the Attorney General, or by any district attorney, in the name of the state. Upon the filing of the information or complaint, the clerk of the court must issue an attachment against the property mentioned in the complaint or information, which attachment has the same force and effect against such property, and is issued in the same manner as attachments issued from the superior courts in civil cases.” Penal Code section 326 prohibits the use of buildings or vessels for lotteries as follows, “Every person who lets, or permits to be used, any building or vessel, or any portion thereof, knowing that it is to be used for setting up, managing, or drawing any lottery, or for the purpose of selling or disposing of lottery tickets, is guilty of a misdemeanor.” Penal Code section 328 states: “Nothing in this chapter shall make unlawful the printing or other production of any advertisements for, or any ticket, chance, or share in a lottery conducted in any other state or nation where such lottery is not prohibited by the laws of such state or nation; or the sale of such materials by the manufacturer thereof to any person or entity conducting or participating in the conduct of such a lottery in any such state or nation. This section does not authorize any advertisement within California relating to lotteries, or the sale or resale within California of lottery tickets, chances, or shares to individuals, or acts otherwise in violation of any laws of the state.” All of the foregoing Penal Code sections were enacted prior to the 1984 adoption of Proposition 37 by the voters.
6. The Benevolent Association argues that Penal Code section 319 defining lotteries was not affected by the initiative. However, any provision of California law limiting a lottery has no effect in the present case. Section 8880.70 provides in pertinent part, “Any other state ․ law providing any penalty, ․ restriction, or prohibition for the possession, manufacture, transportation, distribution, advertising, or sale of any lottery tickets ․ shall not apply to the tickets ․ of the California State Lottery.” Nothing in Penal Code section 319 can be construed to invalidate keno.
7. Penal Code section 330 provides in pertinent part, “Every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rouge et noire, rondo, tan, fan-tan, seven-and-a-half, twenty-one, hokey-pokey, or any banking or percentage game played with cards, dice, or any device, for money, checks, credit, or other representative of value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor․”
8. Nothing in the legislative history of Penal Code section 330b, subdivision (2) contradicts our conclusion the computer terminals utilizing the Quick Pick process are slot machines within the definition of that statute. Penal Code section 330b, subdivision (2) was enacted in part in response to the Second Progress Report of the Special Crime Study Commission on Organized Crime which identified law enforcement problems arising from the presence of slot machines. The commission recommended: “We need, first, a statute which prohibits the mere possession of slot machines and all other mechanical gambling devices.” (Special Crime Study Commission on Organized Crime, Second Progress Report (Mar. 7, 1949) p. 68.) After the Legislature was unable to adopt legislation controlling slot machines in 1950, Governor Earl Warren called the Legislature into an extraordinary session. The extraordinary session was called by Governor Warren in part for the following reason: “To consider and act upon legislation relating to gambling and devices capable of being used for gambling purposes.” (Governor's Proclamation to Leg. (Mar. 1, 1950) Assem.J. (1950 First Extra. Sess.) p. 2.) In his speech to a joint session of the Legislature, Governor Warren indicated he desired to have a law outlawing slot machines that was unambiguous and easy to enforce. (Address by Governor Warren to Joint Session of the Legislature (Mar. 6, 1950) Assem.J. (1950 First Extra. Sess.) p. 12.) The Legislative Counsel's comment broadly described a slot machine as follows: “A slot machine or device, within the meaning of the section is one that is adapted, or may be readily converted into one that is adapted, for use in such a way that, as a result of the insertion of money or some other object, or by any other means, it is caused to operate or may be operated, and by reason of any element of hazard or chance or other outcome of operation unpredictable by him, the user may receive or become entitled to receive any money or thing of value or additional chance or right to use the machine or device or any check, slug, token or memorandum, whether of value or otherwise which may be exchanged for any money or thing of value, or which may be given in trade irrespective of whether it may, apart from any element of hazard or chance or unpredictable outcome, also sell, deliver, or present some merchandise, indication of weight, entertainment or other thing of value (subdivision (2)).” (Rep. of Legis. Counsel on Assem. Bill No. 34 (1950 First Extra. Sess.) Apr. 6, 1950, pp. 1–2.) All of the legislative history is consistent with an intention on the part of the legislators to broadly define the mechanical devices referred to as slot machines so that enforcement of the anti-gambling laws would be easier.
TURNER, Presiding Justice.
GRIGNON and GODOY PEREZ, JJ., concur.