August 21, 1989

Mr. Craig K. Thompson
Clay County State's Attorney
25 Market Street
P.O. Box 295
Vermillion, SD 57069

OFFICIAL OPINION NO. 89-24

Lottery ticket as consideration for insufficient funds violations

Dear Mr. Thompson:

You have requested an opinion concerning the following factual situation:

FACTS:

A Clay County merchant received a check for the purchase of state lottery tickets which check was returned to the merchant for reason of insufficient funds.

Based upon the above facts, you have asked the following questions:

QUESTIONS:

1. Whether present consideration exists for the sale of state lottery tickets by the use of personal checks?

2. Whether the writing of a check with insufficient funds for the purchase of state lottery tickets is punishable under SDCL ch. 22-41(3).

3. Whether the laws applying to the purchase of lottery tickets by check will also apply to playing of video lottery machines in the future?

IN RE QUESTION NO. 1:

SDCL 22-41-1 states:

Any person who, for himself or as agent or representative of another, for a present consideration with intent to defraud, passes a check drawn on a financial institution knowing at the time of such passing that there are not sufficient funds in the account on which the check was drawn in the financial institution for the payment of such check and all other checks upon such funds then outstanding, in full upon its presentation, although no express representation is made with reference thereto, is guilty of passing a check against insufficient funds. A person who passes a check of one hundred dollars or less against insufficient funds is guilty of passing a check against insufficient funds in the third degree, which is Class 2 misdemeanor. A person who passes a check or a series of checks within any thirty-day period in the amount of two hundred dollars or less but more than one hundred dollars, against insufficient funds, is guilty of passing a check against insufficient funds in the second degree, which is a Class 1 misdemeanor. A person who passes a check of more than two hundred dollars, or a series of checks within any thirty-day period totaling more than two hundred dollars, against insufficient funds is guilty of passing a check against insufficient funds in the first degree, which is a Class 6 Felony. [Emphasis added.]

SDCL 22-41-2.1 defines "present consideration" in the following language:

Present consideration includes goods which are delivered or constructively delivered, and services which are completed, seven days, exclusive of the date of such delivery or completion and exclusive of legal holidays and Sundays, before or after payment thereof. In addition, payment of taxes and any other obligation to the state of South Dakota or any other subdivision thereof in payment of alimony or child support is present consideration for purposes of this chapter.

In addition, the South Dakota Supreme Court in State v. Mauck, 270 N.W.2d 56, 57 (S.D. 1978) stated:

Statutes requiring such present consideration as an element of the offense are interpreted to require that the surrender of the consideration, be it money, channels, property or services, be made in reliance upon apparent validity of the check. [Citations omitted.]

The South Dakota State Legislature in 1987 created the State Lottery Commission under SDCL ch. 42-7A and authorized it to promulgate rules and regulations for the purpose of operating state lotteries. In 1989, the Legislature amended the authority to authorize state lotteries through the use of video lottery machines. Specifically, as it relates to ticket lotteries, the Legislature put parameters on the allocation of monies from the sale of tickets. Under SDCL 42-7A-23 a minimum of fifty percent of the projected gross revenues from the sale of lottery tickets must be disbursed as prizes. In addition all net revenues not necessary to cover expenses are required to be deposited in the state general fund. See SDCL 42-7A-22 through 24.

Under the above stated statutes and case authority it is my opinion that the passing of a check for the purchase of a state lottery ticket constitutes present consideration for the purposes of prosecution passing a check against insufficient funds in violation of SDCL 22-41-1. A State lottery ticket is present consideration as that term is defined under SDCL 22-41-2.1. For purposes of this section, a state lottery ticket constitutes a "good," as well as an obligation to the State of South Dakota. It is clear under the state lottery provisions that the State of South Dakota receives the benefit from the sale of lottery tickets.

IN RE QUESTION NO. 2:

It is my opinion that a person who passes a check drawn on a financial institution for the purpose of purchasing a state lottery ticket, knowing at the time of such passing that there are not sufficient funds in the account on which the check is drawn, is guilty of passing a check against insufficient funds in violation of SDCL 22-41-1. All of the elements of the offense of passing a check against insufficient funds are complied with. The fact that the check is for the purchase of a state lottery ticket rather than a purchase of some other goods, or payment of an obligation due the state of South Dakota, is irrelevant for purposes of this criminal violation.

IN RE QUESTION NO. 3:

As stated in answering Question No. 1, SDCL 22-41-2.1 defines what constitutes present consideration for purposes of establishing a violation of passing a check against insufficient funds. It is my opinion that passing a check for purposes of playing a state video lottery machine would constitute a service which satisfies the present consideration definition. This determination is based upon the definition of service under SDCL 22-1-2(43), which states in part:

`Service,' labor that does not include a tangible commodity. The term includes, but is not limited to: . . . The use of machines designed to be operated by coin or other things of value; . . .

The new state lottery provisions concerning video lottery machines require the machines to be operated by coin or other thing of value. See SDCL 42-7A-2(13). Under the above statutory scheme, the passing of a check for the purpose of obtaining money to play state video lottery machines would constitute present consideration and, assuming the remainder of the elements of SDCL 22-41-1 are satisfied, would constitute offense of passing a check against insufficient funds.

Respectfully submitted,

ROGER A. TELLINGHUISEN
ATTORNEY GENERAL

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