July 22, 1981

Mr. Rodney C. Lefholz 
Pennington County State's Attorney 
Public Safety Building 
300 Kansas City Street 
Rapid City, South Dakota 57701

Official Opinion No. 81-26

Legality of Promotional Games

Dear Mr. Lefholz:

You have requested an official opinion from this office in regard to the following factual situation:

FACTS: 

Several establishments in Rapid City whose main source of income is from the sale of alcoholic beverages have instituted certain promotional games. In these games a customer purchases a drink and receives a $5.00 certificate of funny money.  The customer can exchange the $5.00 certificate for 5 chips to be used in a promotional game of Blackjack.  The customer can only play the game if he has these chips.  In the establishment there are tables set up with employees stationed at the tables.  An employee serves as a card dealer and deals two cards face down to each of the customers at the table who are playing the game.  Dealer deals one card face down and the other face up for himself.  The object of the game is for the players to obtain cards whose numerical equivalent is 21, but not over 21.  The player whose cards have a numerical equivalent to 21 or is closest to a number 21, without going higher than that number, wins all the chips that have been bet on that hand.  The object of the game is for the player to win chips.  If he wins 50 chips he is entitled to a free drink.  If he wins 12,000 chips he is entitled to a trip to Las Vegas, Nevada.

Based on the above facts, you have asked the following question:

QUESTION: 

Are such promotional games illegal gambling in violation of SDCL 22-25?

The question of whether the use of 'trade chips' such as those constitutes gambling has been considered in opinions of two of my predecessors.  1925-26 A.G.R. 141; 1931-32 A.G.R. 442, 443.  In both those opinions, the practice was found to be a violation of the gambling statutes.  I would concur with the reasoning expressed in those opinions.

SDCL 22-25-1 provides: 

Any person who engages in gambling in any form with cards, dice, or other implements or devices of any kind wherein anything valuable is wagered upon the outcome, or who keeps any establishment, place, equipment, or apparatus for such gambling or any agents or employees for such purpose, or any person who knowingly lets any establishment, structure, place, equipment, or apparatus for such gambling is guilty of a Class 2 misdemeanor.

The patron in the factual situation you have presented is wagering something 'valuable' when he bets the chips he receives for purchasing a drink.  The patron may purchase a drink for 50 chips and therefore each chip is worth 1/50th of a drink.  He has the option of either accumulating his chips and purchasing a drink after buying 10 drinks or betting them at the tables. Assuming a drink is worth $1.50 the player is putting 1/50th of that, or 3  cents, at risk each time he bets a chip.  This constitutes wagering something of value in violation of SDCL 22-25-1 and it is immaterial that trade chips are used or that the amount at risk is small.  38 Am.Jur.2d § §  27, 30; 38 C.J.S. Gaming §  88.  Therefore, the view that such practice is unlawful and has been so interpreted since 1926 by various Attorneys General shall continue.

Respectfully submitted,

Mark V. Meierhenry
Attorney General