After Michael Vento was convicted of commercial gambling in
violation of New Mexico Statutes § 30-19-3(A), he appealed. State
v. Vento, --- P.3d ----, 2012 WL 3101655 (New Mexico Court of Appeals
2012).
The conviction arose from Vento’s operating an Internet
café, which he also owned. State v. Vento, supra. Customers bought time to
use the café’s computers by buying a card that was swiped at a card reader near
the computer they were to use. State v. Vento, supra. A customer
received “one hundred entries into a sweepstakes that awarded cash prizes” for
every ten minutes of Internet time he/she bought. State v. Vento, supra.
It was not necessary to buy Internet time to
obtain a card and enter the sweepstakes. State
v. Vento, supra. Vento’s café gave
one card with one hundred free sweepstakes entries to each customer who
requested one, but they were limited to one card per customer per twenty-four
hour period. State v. Vento, supra. The rules of the sweepstakes were posted
throughout the café and printed on a form customers signed before obtaining the
card to swipe at a computer. State v. Vento, supra.
Vento’s computer system “predetermined” the winning sweepstakes
entries, and
customers had a choice in determining
how the computer would
reveal whether an entry was a winner. Customers could instantly reveal whether
they had a winning entry, or have the outcome of their entry revealed at a
computer through what appeared to be a selection of video casino-like games.
Neither method . . . diminished the customer's purchased Internet time. In
addition, customers were not required to purchase Internet time or use a computer .
. . to reveal whether their free entry was a winner.
State v. Vento, supra.
At some point, the New Mexico Gaming Control Board raided
the café, and Vento was charged with commercial gambling by “participating in
the earnings of or operating a gambling place.” State v. Vento, supra (quoting New Mexico Statutes §
30-19-3(A)). Vento claimed the
sweepstakes was a
legal promotion intended to entice
customers to his recently opened café and did not constitute commercial
gambling. [Vento] compared his sweepstakes to other sweepstakes programs
offered by businesses such as McDonald's, Cola–Cola, and Albertsons stores.
The
State asserted that [his] sweepstakes promotion was illegal because customers
rarely used any of their Internet time and could not obtain a refund for the
time they did not use. Additionally, the majority of customers only
participated in the sweepstakes and did not actually use the Internet time they
purchased with their sweepstakes winnings.
State v. Vento, supra.
As to the latter issue, at trial the prosecution presented
evidence establishing that
only 330 of 140,000 hours of Internet
time purchased with cash or sweepstakes winnings were actually used by
customers to access the Internet. This equated to a usage rate of less than one
quarter of one percent (00.25%). Sweepstakes winnings of approximately $650,000
were used to purchase Internet time of approximately 110,000 hours. After
presenting its evidence, the State argued that [Vento’s] gambling operation was
accomplished under a guise of purchasing Internet time.
State v. Vento, supra.
A jury convicted but the trial judge suspended his sentence
(I have been unable to find out what it was), and Vento appealed. State
v. Vento, supra. His argument on appeal was that his conviction should be
reversed “because the jury returned a general verdict that did not identify the
basis of conviction within the commercial gambling statute.” State v. Vento, supra. As noted above,
Vento was charged under and convicted of violating New Mexico Statutes §
30-19-3(a), which makes it a crime to participate in the earnings of or operate
“a gambling place.” State v. Vento, supra. New Mexico Statutes § 30-19-1(D) defines a “gambling place” as a building or a room
that is not on the premises of
a person licensed as a lottery retailer
or is not licensed pursuant to the Gaming Control Act, one of whose principal
uses is:
(2) receiving, holding, recording or forwarding bets
or offers to bet;
(3) conducting lotteries; or
(4) playing gambling devices[.]
The Court of Appeals noted that New Mexico Statutes
30-19-1(B)(3) “expressly excludes a lottery form classification as a bet.” State
v. Vento, supra. It also noted that
the jury
returned a general verdict that only identified
guilt on the basis of `commercial gambling as charged,’ and did not identify
the basis for the conviction among the alternatives set forth in the commercial
gambling statute. As a result, we are unable to determine whether the jury
found [Vento’s] café was a gambling place because it had a principle use
related to betting, conducting a lottery, or playing gambling devices.
We also cannot determine whether the
jury unanimously agreed on one of the alternatives, or whether some jurors
convicted [him] based on a finding that his café was principally used for one
type of illegal gambling, while others found that his café was principally used
for a different type of illegal gambling.
State v. Vento, supra.
The court then explained that a “`conviction under a general verdict must be reversed where it is based on more than one legal theory and at
least one of those theories is legally ... invalid.’” State v. Vento, supra (quoting State
v. Mailman, 148 N.M. 702, 242 P.3d 269 (New Mexico Supreme Court
2010). It noted that reversal is
necessary in this situation because “‘[j]urors are not generally equipped to
determine whether a particular theory of conviction submitted to them is
contrary to law.’” State v. Vento, supra
(quoting State v. Mailman). In other
words, in this situation the court does not know if all of the jurors convicted
the defendant on the same theory
(which is what is required, since jurors must be unanimous) or not.
The Court of Appeals therefore found that it was required to
reverse Vento’s conviction if any of the alternatives outlined in the statute
above “are legally inadequate to support the jury’s verdict.” State
v. Vento, supra. It began by
analyzing whether his conviction for commercial gambling was based on “inadequate
legal grounds or merely inadequate evidence.”
State v. Vento, supra.
Addressing an issue of first impression, it found that because the “plain
language of the commercial gambling statute specifically excludes” a lottery
from its definition of a bet, Vento could be convicted under the statute only
if his sweepstakes promotion constituted a bet OR a lottery. State
v. Vento, supra. Logically, the jury
could not convict him on both.
The court therefore found that the trial judge erred when he
did not instruct the jury as to whether the sweepstakes was a lottery or a bet;
such a instruction would have made it clear that they could only convict him if
his sweepstakes was one or the other (not both or either). State v. Vento, supra.
Section 30-19-(E) of the New Mexico Statutes defines a lottery as “an
enterprise wherein, for a consideration, the participants are given an
opportunity to win a prize, the award of which is determined by chance, even
though accompanied by some skill.” State v. Vento, supra. Section 30-19-(E) of the New Mexico Statutes
defines a bet as “a bargain in which the parties agree . . . one stands to win
or lose anything of value specified in the agreement”. State
v. Vento, supra.
After analyzing the two, Court of Appeals held that Vento’s
sweepstakes was a lottery, not a bet. State v. Vento, supra. It found that his sweepstakes promotion was
used as a business tool to attract
customers and, therefore, provided the opportunity for a wide number of
potential customer participants to win a variety of pre-determined,
non-specific, cash prizes. . . . No agreement as to the value of
the possible prizes existed between [him] and the patrons who participated in
his promotion.
State v. Vento, supra. The court explained that this meant that if
Vento’s conviction was “potentially premised upon illegal betting,” it was
“improper as a matter of law”. State v. Vento, supra. In other words, Vento would win.
The court then turned to the evidence submitted at trial to
see if “sufficient evidence supported [his] conviction on the legally adequate
alternative theories of conducting a lottery and playing gambling devices.” State
v. Vento, supra. Vento argued that
the evidence was insufficient to support his conviction on any of the
alternatives given in the statute the defines an “illegal gambling place”, but
the prosecution claimed the evidence “was sufficient to prove [he] was either
conducting an illegal lottery; providing gambling devices to his customers; or
participating in betting activities.” State
v. Vento, supra.
Since the court had already found that the evidence was
“legally insufficient to convict” Vent” based on his involvement in betting, it
limited its review to whether the evidence was sufficient to prove his
sweepstakes was a lottery. State v. Vento, supra. In State
v. Jones, 44 N.M. 623, 107 P.2d 324 (1940), the New Mexico Supreme Court
held that a lottery “`consists of three elements, prize, chance[,] and
consideration.’” State v. Vento, supra. Neither Vento nor the prosecution “dispute[d]
that [his] sweepstakes provided an opportunity for participants to win a cash
prize and the award of these prizes was determined by chance.” State v. Vento, supra. The only disputed
issue was whether the prosecution proved that consideration. State v. Vento, supra.
Vento argued that “while his sweepstakes is structured to
resemble a lottery, it cannot be defined as such because it lacks the element
of consideration.” State v. Vento, supra. As
noted above, Vento claimed his sweepstakes was the same kind of game and/or
promotion as the promotions offered by McDonald’s and other companies, but the
Court of Appeals did not agree. It found
that the evidence presented at trial was sufficient to convict him of
commercial gambling by conducting a lottery:
At trial, both parties presented
evidence regarding the concept of a sweepstakes promotion and the case focused
on the element of consideration. The State presented evidence that customers . . . paid consideration to participate in his
sweepstakes lottery promotion. Customers could not obtain a refund for any of
the Internet time they did not use, which constituted ninety-nine point
seventy-five percent (99.75%) of the Internet time purchased.
Only one quarter of one percent
(00.25%) of the Internet time purchased by customers was actually used or
consumed. The majority of customers who still had unused Internet time utilized
their sweepstakes winnings to purchase additional Internet time that they did
not use.
[Vento] told the Board investigators he
retained only eight percent of all the revenue received from the purported sale
of Internet time, with the balance paid to patrons as prizes in the sweepstakes
promotion. The lopsided percentages related to Internet usage, prizes awarded
to patrons, and the significant repurchase of Internet time despite patrons
already possessing unused Internet time constitute substantive evidence that [his]
café operation was structured as a guise for commercial gambling.
Based upon these facts and the
casino-style display of [Vento’s] ongoing sweepstakes promotion, the jury could
reasonably determine that the controlling inducement for the monies being paid
by customers for Internet time was in fact consideration to participate in a
lottery that was disguised as a legitimate business promotion.
State v. Vento, supra.
The court also noted that despite the New Mexico Gaming
Control Board’s “failure to provide regulations or other rules to guide this
type of sweepstakes promotion, we recognize that a flexible-participation
lottery promotion can be abused if the financial structure is designed to
effectuate the gambling component of the scheme rather than the sale of
business products actually offered to customers.” State
v. Vento, supra.
It therefore found that the trial judge erred in submitting
the case to the jury without defining the precise basis of the charge, i.e.,
commercial gambling based on running a lottery, and so reversed Vento’s
conviction. State v. Vento, supra.
That was the good news.
The not-so-good news is that the Court of Appeals also remanded the case
“for a new trial on the charge of commercial gambling based solely upon the
theory of conducting a lottery.” State v. Vento, supra.
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