Office of General Counsel

Gambling

 

Gambling at ASU

Arizona Law

Statutory Exceptions

Common Gambling Activities

ASU Policies Concerning Gambling

Footnotes

Appendix

 

  1. GAMBLING AT ASU
    From time to time, students, employees and others wish to engage in gambling related activities for fundraising or recreation. This briefing paper explains the circumstances under which "gambling" takes place at ASU.

  2. DISCUSSION

    1. GAMBLING IS GENERALLY PROHIBITED UNDER ARIZONA LAW
      In Arizona, "gambling" occurs when three circumstances are present: (1) an act of risking or giving something of value, (2) for the opportunity to obtain a benefit, and (3) from a game or contest of chance or skill or a future contingent event. Each of these elements has a particular definition.

      An "act of risking or giving something of value" means the loss of something with an economic, monetary, or exchange value (e.g., money wagered or used to operate or participate in a game or contest.) But, if no money or nothing of value is required to participate, then the conduct is not "gambling."

      An "opportunity to obtain a benefit" means if a participant may receive anything of value if he or she is successful in the contest. For example, in the case of sports pools and fantasy football contests, a participant purchases a chance to win all or a portion of the entire amount wagered. Also, in card and dice games, a participant plays for a chance to win something of value – usually money.

      Games of chance, skill, or contingency on a future event include sports pools, fantasy team sports contests, card and dice games, games of skill, and video games. Each of these particular games is described in the Appendix at the end of this paper.

      Under Arizona law, all "gambling" is unlawful and subject to criminal penalties unless it falls within a statutory exclusion. The prohibition against gambling targets the circumstances under which games of chance or skill are played. For example, it is permissible for people to operate a card game so long as participants are not required to wager anything of value for an opportunity to profit because those circumstances do not meet the definition of gambling. However, when participants are required to wager money for an opportunity to benefit, the participants are "gambling." Then you must look to Arizona’s gambling statutes to determine if an exception applies.

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    2. STATUTORY EXCEPTIONS
      There are six statutory exceptions to Arizona’s general prohibition on gambling: (1) gambling at state, county, or district fairs that satisfy certain restrictions; (2) raffles conducted by certain qualifying, non-profit organizations, (3) raffles conducted by certain state, county, or local historical societies, (4) "regulated gambling," (1) (5) "amusement gambling," and (6) "social gambling." (All of these exceptions are described in Arizona Revised Statutes (A.R.S.) § 13-3302.) This paper discusses only the last two of those exceptions, "amusement gambling" and "social gambling", because the exceptions concerning gambling at fairs and "regulated gambling" are not relevant to activities at ASU, and the exceptions concerning raffles are addressed in detail in a separate briefing paper that is available on this Web site.

      1. "Amusement Gambling"
        The "amusement gambling" exception is intended to apply to games in which skill rather than chance predominate. The legislative history of the Arizona gambling statutes suggest that those kinds of games include billiards, darts, skiball, pinball, many video games (where the payoff is limited to achievement of the highest score, a free replay or an extended game), traditional midway games and games involving intellectual contests entered into in connection with the purchase of a product. Card or dice games that involve wagering are generally not considered to be "amusement gambling."

        Authorities carefully scrutinize all of the circumstances surrounding gambling activity before they will consider it to be "amusement gambling." For example, an overriding condition for the "amusement gambling" exception is that the device, game or contest must be played "for entertainment" and not for gambling purposes. If any non-participant derives a profit or even a chance of profit from the money paid to gamble, the activity is not "amusement gambling." Moreover, if a non-participant offers prizes (e.g., money or merchandise) as a "lure" to separate players from their money for the non-participant's benefit in connection with gambling, the activity will not meet the exception.

      2. "Social Gambling"
        The "social gambling" exception is intended to permit casual, friendly wagering among people, over the age of 21, that are competing on equal terms with each other. This exception does not apply to gambling that is operated as a "business" – that is, under circumstances where a participant may receive a "benefit" other than winnings from the contest, or where a non-participant may "benefit" from the gambling activity, or the rules or conditions under which the games are played favor the "house." A "benefit" includes any value or advantage, present or prospective, and can be direct - such as taking a percentage of a pot, charging an entrance fee or renting chairs or equipment to players - or indirect - such as using gambling to attract customers or increase sales by a retail establishment.

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    3. COMMON GAMBLING ACTIVITIES

      1. Office Pools
        In a typical office pool, employees within an office wager and make their best guesses as to the result of a future event, with the entire monetary amount invested by all of the participants going to the individual whose guesses turn-out to be the most accurate. Office pools are often centered on the results of an athletic contest (e.g., the Super Bowl, World Series, or NCAA College Basketball Championship) or the birth of a child (e.g., birth date, gender, or weight of the child). Office pools are ordinarily considered to be forms of "gambling." Under some circumstances, however, an office pool may fall within the "social gambling" exception to Arizona's gambling statutes if four conditions are present: (1) the wagers are made among participants who are each 21 years or older, (2) all the participants compete on equal terms, (3) none of the participants stands to receive any benefit from the office pool arrangement other than the winnings, and (4) no non-participant will gain from the arrangement.

      2. Casino Nights
        "Casino nights" are fundraising events that involve attendees who give donations in exchange for an opportunity to attend the event and receive chips or script for the purpose of playing a variety of casino-style games (e.g., blackjack, roulette, craps, etc.). Often, if an attendee exhausts his supply of chips or script, he must make an additional donation to replenish his supply and continue playing. The chips or script are not redeemable for cash. At the end of the event, the host auctions off donated prizes and the attendees purchase them by bidding with their gambling winnings, or cash, or both.

        "Casino night" activities constitute "gambling." The "amusement gambling" exception does not apply to those activities because the purpose of the games is to raise money for a non-participant charity and the charity offers prizes as a "lure" to separate players from their money. Likewise, the "social gambling" exception does not apply because the charity, a non-participant in the games, stands to benefit from the gambling. The Arizona Attorney General has suggested, however, that there may be two different scenarios under which a person or organization might lawfully operate a casino night in accordance with Arizona law. See Ariz. Op. Atty. Gen. I87-101 and I97-010. The first method is the "no consideration" method and the second method is the "raffle method."

        Under the "no consideration" method, the entity must "resolve to give away the chips or script to anyone who requests them without requiring a donation or other consideration." In this manner, the conduct of the games would not constitute "gambling" because the players would not be giving any value in exchange for the opportunity to participate in the contests or games.

        Under the "raffle method," a qualified tax-exempt organization that meets the requirements of A.R.S. § 13-3302(B)(2) might be able to permissibly conduct a "casino night." Using that approach, the qualified organization would sell raffle tickets instead of chips or script and then allow the players to use their tickets as the medium for their play. The games would serve only to distribute and redistribute the chances of winning the raffle among the players. At the end of the event, the organization would be able to raffle prizes using ticket numbers corresponding to those held by the players.

      3. Games of Chance (e.g. Poker, Blackjack, and Dice)
        Card games such as poker (and variations thereof such as "Texas No Hold 'Em" and "Five-Card Stud," etc.), blackjack, and dice may only be permissible if the players do not give any value in exchange for the opportunity to participate or one of the statutory exceptions discussed in section B above applies.

        Under certain limited circumstances card or dice games involving wagers may qualify as "social gambling" if the games are not operated as a "business"(3) and all four of the following circumstances are present: (1) no player receives any benefit (direct or indirect) other than winnings, (2) no non-player receives any benefit (direct or indirect) from the games, (3) none of the players are younger than 21, and (4) all of the players compete on equal terms with each other.

      4. Alcohol Consumption
        People commonly consume alcoholic beverages while they engage in activity that may be considered "gambling." Please remember that possessing, consuming or being under the influence of alcohol on ASU property is generally prohibited except as is specifically permitted in ASU Policies. See the briefing paper that is available on this Web site entitled "Alcohol on Campus: Frequently Asked Questions." Those policies apply separate and apart from those that govern gambling and without regard to whether any gambling activity is permissible under ASU Policy or State law.

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    4. ASU POLICIES CONCERNING GAMBLING
      ASU has enacted policies concerning gambling that apply to both ASU employees and ASU students.

      1. ASU Employees
        ASU Policy, SPP 801, provides that it is inappropriate for an ASU employee to engage in "gambling while on duty." This policy prohibits ASU employees from engaging in any form of gambling (legal or illegal) while on duty.

      2. ASU Students Generally
        ASU policies not only prohibit ASU students from engaging in illegal gambling (under State law) but they also prohibit legal gambling that relates to any ASU event. According to ABOR Policy, 5-308(F)(18), "prohibited conduct" includes both off-campus conduct related to gambling associated with any university event or activity and gambling as prohibited by law or applicable policy.

      3. Student Athletes
        According to ASU Policy, ICA 403, student athletes are prohibited from knowingly participating in any sports gambling activities concerning any intercollegiate athletics team or competition and from participating in any "organized gambling activity" (e.g., a bookmaker, parlay card, etc.) that involves intercollegiate or professional athletics. These prohibitions apply without regard to whether the activities are legal under Arizona's laws.

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FOOTNOTES

  1. "Regulated gambling" is defined as gambling that, among other things, is "operated and controlled in accordance with a statute, rule or order of this state or of the United States" or in accordance with a tribal-state gaming compact. A.R.S. § 13-3301(6). Accordingly, legalized wagering on horse and dog races (A.R.S. § 5-112), the Arizona lottery (A.R.S. § 5-504), bingo (A.R.S. § 5-401) and tribal gambling under a tribal-state gaming compact (A.R.S. § 5-601) constitute "regulated gambling.".
  2. Raffles and the qualifications that an organization must meet to permissibly conduct raffles are discussed in detail in a briefing paper entitled "Raffles" that is separately available on this Web site.
  3. See the discussion in section B.2. of this paper.

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APPENDIX

  1. "Sports pool contest": In a typical "sports pool contest" a chart is prepared that consists of a predetermined number of squares arranged in a grid format. A specific chart is used for each sporting event. Participants purchase one or more of the squares for a specified amount of money. The participants can win all or a portion of the pooled money if their square is successful in the competition.
  2. "Fantasy sports team": In a typical "fantasy sports team" contest a participant purchases an ideal team roster. The roster consists of players selected by the participant for the purpose of competing in the contest. Participants must ordinarily pay an additional cost to trade players with one another. A participant has an opportunity to win either a portion of the pooled money or a prize based on his or her team’s performance during the season relative to the performances of the other participants’ teams.
  3. "Card and dice games": "Card and dice games" include poker (and variations of poker such as "Texas No Hold 'Em" or "Five-Card Stud," etc.), blackjack, and craps.
  4. "Games of skill": "Games of skill" include billiards ("pool"), darts, or trivia or other intellectual games. Usually, the participants bet amongst themselves and the winner of the competition receives the amount wagered.
  5. "Video games": Many video games are electronic devices require participants to pay a fee to play and the payoff is limited to the satisfaction of achieving the highest score or winning a free replay or extended game.

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