Facts
- Albertson’s, Inc. operated a promotional contest called “Double Cash Bingo” at its Utah stores.
- Participants received a bingo-style card and a disc with numbers under opaque covers; after uncovering numbers, a winning bingo pattern entitled the player to a designated cash prize.
- Game materials were distributed free of charge to anyone requesting them, and no purchase was required to obtain them.
- Participation was possible without entering the store (e.g., by mail), and no barrier in the record prevented play without visiting the premises.
- The Salt Lake County Attorney threatened criminal prosecution for operating an illegal lottery unless Albertson’s stopped the promotion; Albertson’s discontinued it and filed suit.
- Albertson’s sought a declaratory judgment that the promotion was not “gambling” or an unlawful “lottery” under Utah law and the Utah Constitution.
- Material facts were undisputed; Albertson’s sought summary judgment, while the Attorney General and County Attorney sought dismissal.
- The trial court dismissed the action; Albertson’s appealed.
Issues
- Whether “Double Cash Bingo” constituted an illegal lottery or gambling under Utah law.
- Whether participants supplied the required element of “consideration” (i.e., “valuable consideration”) when entry was free and no purchase was required.
- Whether participants’ time, effort, inconvenience, travel, and opportunity cost, or the sponsor’s increased sales and goodwill, can satisfy the consideration element.
Decision
- The Utah Supreme Court reversed the trial court’s dismissal.
- The court held that the promotion was not an illegal lottery or gambling scheme because it lacked the element of valuable consideration from participants.
- The court concluded that free distribution of game pieces, coupled with the absence of any required purchase or payment, defeated the consideration requirement.
Legal Principles
- A prohibited lottery generally requires three elements: prize, chance, and consideration furnished by the participant.
- “Consideration” in the lottery context requires a participant to stake or risk something of value for the chance to win.
- Time, effort, inconvenience, travel, and opportunity cost incurred to obtain free entry materials do not, without more, constitute “valuable consideration.”
- Promotional or advertising benefits to the sponsor (including increased sales and goodwill) do not substitute for consideration moving from each participant to obtain a chance at the prize.
- When entry is genuinely free and no purchase or payment is required, the remaining participant “costs” of obtaining materials typically are insufficient to transform a promotional contest into an illegal lottery.
Conclusion
Because participation in Albertson’s promotion required no purchase, payment, or risk of something of value by entrants, and because participant inconvenience and the sponsor’s business benefits were not legally sufficient consideration, the promotion was not an illegal lottery under Utah law and the dismissal of the declaratory action was reversed.