IN THE SUPREME COURT OF TEXAS ══════════ No. 18-1231 ══════════
THE CITY OF FORT WORTH AND DAVID COOKE, IN HIS OFFICIAL CAPACITY AS FORT WORTH CITY MANAGER, PETITIONERS, v.
STEPHANNIE LYNN RYLIE, TEXAS C&D AMUSEMENTS, INC., AND BRIAN AND LISA SCOTT D/B/A TSCA AND D/B/A RIVER BOTTOM PUB, RESPONDENTS
══════════════════════════════════════════ ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE SECOND DISTRICT OF TEXAS ══════════════════════════════════════════
Argued January 28, 2020
JUSTICE BOYD delivered the opinion of the Court.
The issue in this case is whether (and if so, to what extent) a state statute that regulates
“coin-operated machines” preempts city ordinances that regulate “eight-liners” and the “game
rooms” that offer them. We cannot reach that issue today, however, because the answer depends
initially on whether the eight-liners at issue are constitutional and legal. The court of appeals did
not address the constitutionality or legality of the eight-liners because it believed the question is
irrelevant to the preemption issue. Because we disagree, we reverse the court of appeals’ judgment
and remand the case to that court so that it can decide in the first instance whether the eight-liners
are constitutional and legal. I. Background
For as long as the State of Texas has been the State of Texas, its citizens have elected to
constitutionally outlaw most types of “lotteries.” 1 Contrary to the term’s popular understanding, a
“lottery” includes not just contests involving scratch-off tickets and numbered ping-pong balls, but
a wide array of activities that involve, at a minimum, (1) the payment of “consideration” (2) for a
“chance” (3) to win a “prize.” City of Wink v. Griffith Amusement Co., 100 S.W.2d 695, 698 (Tex.
1936). 2 Since its ratification in 1876, our current constitution has affirmatively required the
legislature to “pass laws prohibiting” lotteries. TEX. CONST. art. III, § 47. 3
1 See TEX. CONST. OF 1876 art. III, § 47 (“The Legislature shall pass laws prohibiting the establishment of lotteries and gift enterprises in this State, as well as the sale of tickets in lotteries, gift enterprises or other evasions involving the lottery principle, established or existing in other States.”); TEX. CONST. OF 1869 art. III, § XXVII (“The Legislature shall not authorize any lottery, and shall prohibit the sale of lottery tickets.”), art. XII, § XXXVI (“No lottery shall be authorized by this State; and the buying and selling of lottery tickets within this State is prohibited.”); TEX. CONST. OF 1866 art. VII, § 17 (“No lottery shall be authorized by this State; and the buying or selling of lottery tickets within this State is prohibited.”); TEX. CONST. OF 1861 art. VII, § 17 (“No lottery shall be authorized by this State; and the buying or selling of lottery tickets within this State is prohibited.”); TEX. CONST. OF 1845 art. VII, § 17 (“No Lottery shall be authorized by this State; and the buying or selling of Lottery Tickets within this State, is prohibited.”).
2 See TEX. PENAL CODE § 47.01(7) (“‘Lottery’ means any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win anything of value, whether such scheme or procedure is called a pool, lottery, raffle, gift, gift enterprise, sale, policy game, or some other name.”); Randle v. State, 42 Tex. 580, 585 (1875) (defining lottery as a “scheme for the distribution of prizes by chance”); see also Fed. Commc’ns Comm’n v. Am. Broad. Co., 347 U.S. 284, 290 n.8 (1954) (“[W]hatever may be the factual differences between a ‘lottery,’ a ‘gift enterprise,’ and a ‘similar scheme,’ the traditional tests of chance, prize, and consideration are applicable to each.”); Queen v. State, 246 S.W. 384, 386 (Tex. Crim. App. 1922) (“A slot machine is a lottery.”).
3 Beginning in 1980, Texans ratified a series of constitutional amendments to allow certain types of lotteries, including the state lottery and charitable bingo and raffles. See TEX. CONST. art. III, § 47(b), (c), (d), (e). The legislature must prohibit all lotteries the constitution does not expressly authorize. Id. § 47(a); see generally Hardy v. State, 102 S.W.3d 123, 130 (Tex. 2003) (discussing constitutional amendments regarding lotteries).
2 A. Gambling and gambling devices
To fulfill its constitutional obligation, the legislature has enacted statutes making it a
criminal offense to engage in or promote most forms of “gambling” 4 or to own, manufacture,
transfer, or possess a “gambling device.” TEX. PENAL CODE §§ 47.02–.06. The term “gambling
device” includes “any electronic, electromechanical, or mechanical contrivance . . . that for a
consideration affords the player an opportunity to obtain anything of value, the award of which is
determined solely or partially by chance, even though accompanied by some skill, whether or not
the prize is automatically paid by the contrivance.” Id. § 47.01(4). This includes, as examples,
electronic or mechanical versions of “bingo, keno, blackjack, lottery, roulette, [and] video poker.”
Id. § 47.01(4)(A).
B. The fuzzy-animal exclusion
As technology developed in recent decades, the statutory prohibition against gambling
devices presented a peculiar problem for increasingly popular “family entertainment centers.” 5
These establishments offer electronic and mechanical games that at least arguably constitute
lotteries or gambling devices: patrons pay consideration for the chance to win as many tickets as
possible, with an eye toward the prize counter. Behind the prize counter lies a bounty of gadgets,
toys, and stuffed animals (most of which are worth far less than the amount expended to win the
4 “Gambling” generally refers to participation in lottery-type activities involving, at a minimum, consideration, chance, and a prize. See generally TEX. PENAL CODE §§ 47.01(1) (defining “bet”), .01(4) (defining “gambling device”), .02 (prohibiting “gambling”), .03 (prohibiting “gambling promotion”). 5 Texas is home to a number of these centers: Dave & Busters, founded and headquartered in Dallas; Main Event, headquartered in Plano; and Chuck E. Cheese, headquartered in Irving.
3 tickets) and a few big-ticket items (usually available only to those who win a rare jackpot or spend
a few hundred hours playing Skee-Ball).
In 1993, the legislature made the policy decision to resolve this perceived problem by
adopting what has become known as the “fuzzy-animal exclusion.” 6 See Act of May 31, 1993, 73d
Leg., R.S., ch. 774, § 1, 1993 Tex. Gen. Laws 3027, 3027–28 (amended 1995) (codified at TEX.
PENAL CODE § 47.01(4)(B)). Under the fuzzy-animal exclusion, a machine that would otherwise
constitute a “gambling device” is excluded from the definition if (1) it is used “solely for bona fide
amusement purposes,” (2) it rewards only “noncash merchandise prizes, toys, or novelties, or a
representation of value redeemable for those items,” and (3) the reward for “a single play of the
game or device” is worth no more than the lesser of $5 or ten times the cost of the single play.
TEX. PENAL CODE § 47.01(4)(B).
C. Eight-liners
Soon after the legislature adopted the fuzzy-animal exclusion, owners of machines known
as “eight-liners” began taking the position that their machines fall within the exclusion’s
protection. 7 Eight-liners generally operate like a video slot machine: a patron pays to play the
machine, which displays nine electronic symbols arranged in three columns and three rows; the
machine records the payment as credits; and the player bets some or all of those credits by pushing
a button to cause the three columns to start spinning. If the columns stop (either automatically or
when the player pushes the button a second time) with three of the same symbols in one of eight
6 See, e.g., Twenty-Nine (29) Gambling Devices v. State, 110 S.W.3d 146, 148 (Tex. App.—Amarillo 2003, no pet.) (noting that section 47.01(4)(B) is “commonly called the ‘fuzzy animal’ exclusion”).
7 See Hardy, 102 S.W.3d at 125–26 (describing eight-liners and addressing whether they fall within the exclusion).
4 possible lines—three vertical, three horizontal, and two diagonal—the player wins a predetermined
amount of additional credits. At that point, the player can either push the button to play again or
end the game and withdraw a ticket or coupon representing the value of the player’s remaining
credits. The player can then exchange the coupon for a “prize”—much like the children at Chuck
E. Cheese—or for a “right of replay,” meaning credits to use on a different machine.
Community opposition to eight-liners and the “game rooms” that offer them led not only
to arguments that the machines do not qualify under the fuzzy-animal exclusion, but also to
arguments that the exclusion itself is unconstitutional because it authorizes lotteries—games
involving consideration, chance, and a prize. 8 Because the constitution affirmatively requires the
legislature to prohibit lotteries, the opponents argued, it necessarily prohibits the legislature from
enacting an exclusion that allows them. A few years after the legislature adopted the fuzzy-animal
exclusion, Texas Attorney General Dan Morales issued an opinion agreeing that the exclusion is
unconstitutional “because it contravenes the Texas Constitution’s proscription of ‘lotteries.’” Tex.
Att’y Gen. Op. No. DM-466, 1998 WL 78772, at *3 (Jan. 23, 1998). About ten years later, then-
Attorney General Greg Abbott reaffirmed that conclusion. Tex. Att’y Gen. Op. No. GA-0527,
2007 WL 709285, at *3 n.6 (Mar. 6, 2007). We have never addressed that issue, 9 and the exclusion
8 The Operators argue that although their eight-liners constitute “gambling devices” under the penal code (albeit protected by the fuzzy-animal exclusion), they are not lotteries under the constitution because a lottery must involve elements in addition to consideration, chance, and a prize, and their eight-liners do not involve those elements. According to the Operators, “while all lotteries are a form of gambling, not all forms of gambling are lotteries.” For the reasons discussed, we do not address that issue here.
9 A few Texas courts of appeals have addressed the issue to varying degrees, and have declined to find the exclusion unconstitutional. See Owens v. State, 19 S.W.3d 480, 481–84 (Tex. App.—Amarillo 2000, no pet.); Tex. Alc. Bev. Comm’n v. Amusement & Music Operators of Tex., Inc., 997 S.W.2d 651, 656 (Tex. App.—Austin 1999, pet. dism’d w.o.j.); Weaver v. Head, 984 S.W.2d 744, 746–747 (Tex. App.—Texarkana 1999, no writ).
5 remains intact, giving rise to legal disputes over whether the exclusion covers particular variations
of eight-liners. 10
D. Chapter 2153
Meanwhile, chapter 2153 of the Texas Occupations Code 11 “provide[s] comprehensive and
uniform statewide regulation” of “skill or pleasure coin-operated machines.” TEX. OCC. CODE
§ 2153.001. 12 Subject to certain exceptions, see id. §§ 2153.004–.008, chapter 2153 requires any
person who manufactures, owns, buys, sells, rents, trades, maintains, transports, stores, or imports
a skill or pleasure coin-operated machine to first obtain a license or registration from the
comptroller, id. §§ 2153.151–.153, to pay an annual fee for the license or registration, id.
§§ 2153.154, .157, to maintain detailed records regarding the machine, id. §§ 2153.201–.204, and
to pay an annual occupations tax on each machine, id. § 2153.401. The chapter allows a county or
municipality to impose an additional local tax on each machine, but only in an amount not greater
than one-fourth of the state tax. Id. § 2153.451. It also allows them to impose zoning restrictions
on places that “exhibit” the machines based on the property’s “principal use,” and specifically
10 See, e.g., State v. $1,760.00 in U.S. Currency, 406 S.W.3d 177, 178 (Tex. 2013) (per curiam) (holding that eight-liners that “awarded tickets that could be redeemed for non-immediate rights of replay” did not fall within the exclusion); Hardy, 102 S.W.3d at 125 (holding “that an eight-liner that rewards the player with cash, even if that cash is used only to play another machine, fails to satisfy the section 47.01(4)(B) exclusion”).
Enacted in 1999, chapter 2153 codified statutes initially adopted in 1969 to regulate and tax coin-operated 11
machines. See generally Thompson v. Calvert, 489 S.W.2d 95, 96–98 (Tex. 1972) (discussing chapter 2153’s predecessor statutes). 12 A “coin-operated machine” includes “any kind of machine or device operated by or with a coin or other United States currency, metal slug, token, electronic card, or check, including a music or skill or pleasure coin- operated machine.” TEX. OCC. CODE § 2153.002(1). A “skill or pleasure coin-operated machine” includes “any kind of coin-operated machine that dispenses, or is used or is capable of being used to dispense or afford, amusement, skill, or pleasure or is operated for any purpose, other than for dispensing only merchandise, music, or service.” Id. § 2153.002(9). This includes a machine “that dispenses merchandise or commodities or plays music in connection with or in addition to dispensing skill or pleasure,” but does not include “an amusement machine designed exclusively for a child.” Id. § 2153.002(9)(A) & (B).
6 permits them to restrict the exhibition of a machine “within 300 feet of a church, school, or
hospital.” Id. § 2153.452. However, the chapter expressly does not “authorize or permit the
keeping, exhibition, operation, display, or maintenance of a machine [that is] prohibited by the
constitution of this state or the Penal Code.” Id. § 2153.003.
E. The Fort Worth Ordinances
In 2014, the Fort Worth City Council grew weary of what it concluded were the
“deleterious” effects of eight-liners in their communities. According to the City, eight-liner game
rooms cause “increased crime, such as gambling, theft, criminal trespass, criminal mischief, and
burglary,” contribute “to urban blight,” and “downgrad[e] the quality of life” in their surrounding
areas. So the City Council passed two ordinances to regulate “amusement redemption machines”
and associated “game rooms” within the City. The “zoning ordinance” imposes, among other
things, zoning restrictions confining game rooms to industrial-zoned areas and prohibiting them
from operating within 1000 feet of a residential district, church, school, hospital, or another game
room. The “licensing ordinance” generally requires game-room operators to obtain a license from
the City and to pay a licensing and inspection fee.
F. The lawsuit
Stephannie Rylie, Texas C&D Amusements, Inc., and Brian and Lisa Scott (doing business
as TSCA and River Bottom Pub) (collectively “the Operators”) own and operate eight-liners in
Fort Worth. At least for purposes of this case, the Operators admit that their eight-liners qualify as
“gambling devices,” but they contend that they operate their machines in a way that brings them
within the fuzzy-animal exclusion. The Operators filed this suit against the City seeking a
7 declaration that chapter 2153 completely preempts the ordinances, or alternatively, that it partially
preempts the ordinances to the extent of any conflict between the two. 13
In response, the City argued that chapter 2153 does not preempt the ordinances at all
because the Operators’ eight-liners are unconstitutional lotteries and illegal gambling devices and,
by its own terms, chapter 2153 does not apply to unconstitutional or illegal machines. TEX. OCC.
CODE § 2153.003 (“This chapter does not authorize or permit the keeping, exhibition, operation,
display, or maintenance of a machine, device, or table prohibited by the constitution of this state
or the Penal Code.”). 14 In addition, the City filed a counterclaim for declaratory relief, requesting
a declaration that the fuzzy-animal exclusion is unconstitutional because it purports to authorize
lotteries, which the constitution requires the legislature to prohibit.
All parties moved for summary judgment. 15 The trial court granted the Operators’ motion
in part, holding that chapter 2153 does not completely preempt the ordinances but does preempt
ten specific ordinance provisions that conflict with chapter 2153’s provisions. 16 The court denied
13 The Operators also alleged that the Texas Alcoholic Beverage Code preempts ordinance provisions that prohibit or restrict the sale, purchase, possession, or consumption of alcoholic beverages within a game room. The court of appeals agreed. 563 S.W.3d 346, 365–66 (Tex. App.—Fort Worth 2018). Because neither party challenges that holding in this Court, we do not address it.
14 The City also argued that the Operators’ machines are not skill or pleasure coin-operated machines under chapter 2153. The trial court and court of appeals rejected that argument, see 563 S.W.3d at 356, and the City accepts that ruling for purposes of this appeal. 15 The City conceded, “for the sole purposes of” its motion seeking summary judgment on its counterclaim, “that the [fuzzy-animal exclusion] authorizes the Operators’ machines.” In response to the Operators’ summary- judgment motion, however, the City argued that the fuzzy-animal exclusion does not apply to the Operators’ eight- liners.
16 For example, the court held that: (1) section 2153.452, which allows municipalities to impose zoning rules restricting the exhibition of a machine “within 300 feet of a church, school, or hospital,” preempts the zoning ordinance’s prohibition of game rooms within 1000 feet of a residential district, church, school, hospital, or other game room; and (2) section 2153.453, which allows municipalities to seal a machine if the owner fails to pay the city’s tax and charge “not more than” $5 to unseal it preempts the licensing ordinance’s imposition of a $100 unsealing fee.
8 the City’s summary-judgment motion and instead declared that the fuzzy-animal exclusion is
constitutional. The parties voluntarily dismissed all other claims and defenses, and the trial court
entered a final judgment incorporating its summary-judgment orders.
Both sides appealed. The Operators argued the trial court erred by holding that chapter
2153 does not completely preempt the ordinances and by addressing the merits of the City’s
constitutional attack on the fuzzy-animal exclusion. The City argued the trial court erred by
holding that chapter 2153 applies to the machines and partially preempts the ordinances.
Importantly, the City did not appeal from the trial court’s denial of its motion for summary
judgment on its counterclaim seeking a declaration that the fuzzy-animal exclusion is
unconstitutional. 563 S.W.3d at 358 n.13. Although it argued that the exclusion is unconstitutional,
it did so in defense against the Operators’ complete-preemption argument (i.e., in support of its
argument that chapter 2153 does not apply to the Operators’ eight-liners), not to show that the
court erred by dismissing its counterclaim.
The court of appeals affirmed in part and reversed in part. 563 S.W.3d at 365–66. First, it
agreed with the Operators that the trial court should not have addressed the fuzzy-animal
exclusion’s constitutionality when deciding whether chapter 2153 preempts the ordinances,
reasoning that chapter 2153 applies to the Operators’ eight-liners regardless of whether the eight-
liners are constitutional or legal. Id. at 356–57. Specifically, the court noted that section 2153.003
provides that chapter 2153 does not “authorize or permit” unconstitutional or illegal machines, not
that it “exempt[s]” them from chapter 2153’s regulations or that it does not “apply to” or “regulate”
them. Id. at 57. In the court’s view, nothing prevents the legislature from regulating and taxing
unconstitutional or illegal conduct, and section 2153.003 merely clarifies that the chapter does not
9 make an unconstitutional or illegal machine legitimate or legal just because the chapter applies to,
regulates, and taxes it.
Based on this conclusion, the court held that the machines’ constitutionality or legality (and
thus the fuzzy-animal exclusion’s constitutionality) is irrelevant to the preemption issue, 17 so any
decision on the machines’ constitutionality or legality would be advisory and that issue is therefore
non-justiciable in this case. Id. (citing TEX. R. APP. P. 47.1; Tex. Ass’n of Bus. v. Tex. Air Control
Bd., 852 S.W.2d 440, 444 (Tex. 1993)). The court thus reversed the portion of the trial court’s
judgment declaring the exclusion constitutional and dismissed the City’s counterclaim for want of
jurisdiction. Id. at 365–66. 18
The court then agreed with the trial court’s holding that chapter 2153 does not completely
preempt the ordinances but does preempt conflicting provisions. Id. at 359. In the court’s view,
section 2153.001’s statement that the chapter’s purpose is to “provide comprehensive and uniform
statewide regulation” of such machines does not express “with unmistakable clarity” an intent to
preempt the “field” of regulation of coin-operated machines. Id. (citing S. Crushed Concrete, LLC
v. City of Houston, 398 S.W.3d 676, 678 (Tex. 2013)).
17 563 S.W.3d at 358–59 (“[B]ecause chapter 2153 (and the City’s ordinances) apply to the Operators’ machines regardless of whether they are illegal or unconstitutional, section 47.01(4)(B)’s constitutionality is irrelevant here.”).
18 We note that in the trial court, the exclusion’s constitutionality may actually have been justiciable even if it were irrelevant to the preemption issue because it was indisputably relevant to the City’s independent counterclaim seeking declaratory judgment on that very issue. The City does not complain about the court of appeals’ failure to recognize this distinction, however (presumably because it did not appeal from the portion of the trial court’s judgment dismissing its counterclaim), and instead appealed only to challenge the portion of the judgment addressing the Operators’ preemption claim. Because the City did not appeal the dismissal of its counterclaim, the only issue before us is whether the constitutionality/legality issue is relevant to the preemption issue and therefore justiciable.
10 Both sides petitioned this Court for review. The Operators argue that the court of appeals,
like the trial court before it, erred in holding that chapter 2153 does not completely preempt the
City’s ordinances. The City argues: (1) the court of appeals erred in holding that the fuzzy-animal
exclusion’s constitutionality is irrelevant to the preemption issue and thus non-justiciable;
(2) chapter 2153 does not preempt the ordinances at all because it does not “authorize or permit,”
and thus does not apply at all to, unconstitutional or illegal machines; and (3) the Operators’
machines are unconstitutional lotteries or, alternatively, they are illegal gambling devices that the
fuzzy-animal exclusion does not legalize because (a) they do not fall within the exclusion or, if
they do, (b) the exclusion itself is unconstitutional.
II. Justiciability
The parties’ arguments in this Court present a cobweb of issues that, as an initial matter,
challenge us to determine which we should address first. As we have explained, the ultimate issue
in this Court is whether chapter 2153 preempts the City’s ordinances, either completely (as the
Operators contend), in part because of conflicts (as the court of appeals held), or not at all (as the
City contends). But to resolve that issue, we must first decide whether chapter 2153 even applies
to and regulates the Operators’ eight-liners. If it does not, it cannot preempt the ordinances—
completely, partially, or at all. So we must begin by considering whether chapter 2153 applies to
and regulates the Operators’ eight-liners.
But that issue presents sub-issues as well. The City argues that chapter 2153 does not apply
to or regulate the Operators’ eight-liners if (as the City contends) the machines or the fuzzy-animal
exclusion are unconstitutional or illegal. The court of appeals concluded that chapter 2153 does
apply to and regulate the eight-liners, regardless of whether the machines or the fuzzy-animal 11 exclusion are unconstitutional or illegal. So to decide whether chapter 2153 applies to and regulates
the eight-liners, we must first decide (1) whether their constitutionality and legality affect chapter
2153’s applicability, and if so, then decide (2) whether they are constitutional and legal. On the
first point, we conclude that constitutionality and legality matter because chapter 2153 does not
apply to or regulate unconstitutional or illegal machines. We do not address the second issue,
however, because it represents an important issue of first impression in this Court and the court of
appeals did not reach it. We thus remand the case to that court so that it can address and decide
that issue in the first instance.
A. Chapter 2153’s applicability
As described, chapter 2153 regulates “skill or pleasure coin-operated machines.” TEX.
OCC. CODE § 2153.001. In this Court, the City does not contest that the Operators’ eight-liners
qualify as coin-operated machines, but instead contends that chapter 2153 does not apply to them
at all if they are unconstitutional or illegal. We agree.
Section 2153.003 provides that chapter 2153 “does not authorize or permit the keeping,
exhibition, operation, display, or maintenance of a machine, device, or table prohibited by the
constitution of this state or the Penal Code.” TEX. OCC. CODE § 2153.003 (emphasis added). To
“authorize” means to “give legal authority,” and to “permit” means to “consent to formally,” or
“to allow or admit of” an activity. Authorize, Permit, BLACK’S LAW DICTIONARY 129, 1160 (7th
ed. 1999). 19 So under section 2153.003, chapter 2153 does not give legal authority to
19 When, as here, a statute does not define a term, we typically apply the term’s common, ordinary meaning, derived first from applicable dictionary definitions, unless a contrary meaning is apparent from the statute’s language. Tex. State Bd. of Exam’rs of Marriage & Family Therapists v. Tex. Med. Ass’n, 511 S.W.3d 28, 34–35 (Tex. 2017).
12 unconstitutional or illegal machines, and it does not consent to or allow people to keep, exhibit, or
operate such machines.
Adopting the court of appeals’ reasoning, the Operators argue that section 2153.003 (which
is entitled “Construction of Chapter Consistent With Other Laws”) merely clarifies that, although
the chapter applies to and regulates unconstitutional and illegal machines, it does not thereby make
them constitutional or legal. See TEX. OCC. CODE § 2153.003. As they construe it, although the
state may license and tax machines, the chapter does not provide a shield of legality to someone
charged with operating an illegal machine. The Operators support this construction by noting that
section 2153.003 states that the chapter “does not authorize or permit” unconstitutional or illegal
machines, while the next section, 2153.004, provides a list of machines to which the chapter “does
not apply,” and that list does not include unconstitutional or illegal machines. See TEX. OCC. CODE
§ 2153.004.
The Operators concede that their construction renders section 2153.003 surplusage,
because it is a “well-established truism” that the legislature cannot “license” unconstitutional
activities. But, they contend, the City’s construction leads to an “absurd” result. Under the City’s
construction, they argue, “an amusement machine operator acting within the law is taxed and
regulated, while someone who operates outside the law is not.”
We are not convinced. To begin with, we do not agree that the result the Operators
complain of is absurd. We will not construe a statute’s language to produce “patently nonsensical
results,” but this absurdity bar “is high, and should be,” because “mere oddity does not equal
absurdity.” Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 630 (Tex. 2013). It may seem
“odd” that the legislature would choose to license, tax, and regulate legal machines but not illegal
13 ones, yet that’s exactly what it does with a multitude of other products and activities. It regulates
and taxes authorized pharmaceuticals but not illicit drugs, permissible firearms but not illegal
weapons, and legitimate personal services but not forbidden ones. Indeed, the legislature does not
usually regulate and tax illegal activities—it usually punishes and prohibits them. And that’s what
the constitution demands in this context: “The Legislature shall pass laws prohibiting lotteries.”
TEX. CONST. art. III, § 47. If the legislature exercises power the constitution says it doesn’t have—
that is, if it permits lotteries when it only has the power to prohibit them—we take the constitution’s
word over that of the legislature. In light of the constitution’s requirement that the legislature
prohibit lotteries, construing chapter 2153 to apply to, license, and tax unconstitutional or illegal
gambling devices seems far more absurd than construing it not to apply.
But more importantly, we do not find the Operators’ textual arguments convincing either.
While we acknowledge that section 2153.004 expressly addresses machines to which the chapter
“does not apply” and does not include unconstitutional or illegal machines in the list, see TEX.
OCC. CODE § 2153.004, the legislature need not state what it does not have the power to do. Section
2153.004’s list does not include slot machines, video-poker machines, or any of the other machines
the penal code labels as illegal gambling devices, yet no one argues that chapter 2153 applies to,
licenses, regulates, and taxes those machines.
This illuminates the problem at hand. The Operators argue that chapter 2153 applies to
their eight-liners because the state has literally licensed their machines. The Operators hold general
business licenses issued by the state to operate their eight-liners. And the state generates revenue
from the machines through the taxes and fees it imposes. See TEX. OCC. CODE § 2153.401
14 (imposing an occupation tax on coin-operated machines). But those facts do not establish that
chapter 2153 applies to unconstitutional or illegal machines.
The Operators themselves contend that their machines are constitutional and legal, in which
case chapter 2153 would apply to them even under the City’s construction of section 2153.003.
And if (as the City contends) they are unconstitutional or illegal, the fact that the state has licensed
and taxed them would not change the meaning of section 2153.003 any more than it could change
the meaning of the constitution’s requirement that the legislature prohibit lotteries. The legislature
cannot change or ignore the meaning of the constitution’s text. See Ferguson v. Wilcox, 28 S.W.2d
526, 533 (Tex. 1930) (“[W]hen the Constitution provides and commands that a thing shall be done,
the matter must be done as directed, and neither the Legislature, Executive, nor the courts have the
authority to set aside the mandates.”). If the legislature were permitting activities the constitution
requires it to prohibit, that action would be ultra vires and cannot be allowed to stand, no matter
the Operators’ good-faith reliance on those actions.
But most importantly, we think section 2153.003’s plain language makes it clear that
chapter 2153 does not apply to unconstitutional or illegal machines. As explained, chapter 2153
requires that coin-operated machines to which the chapter applies and their owners be licensed or
registered and pay an annual licensing fee and occupations tax. Id. §§ 2153.151–.154, .157, .401.
Assuming compliance with the chapter’s requirements, the license or registration provided under
chapter 2153 literally authorizes or permits the owner to keep, exhibit, operate, or maintain the
machine. See id. § 2153.356 (making it a criminal offense to operate a machine to which chapter
2153 applies without a valid license or registration certificate). In this context, section 2153.003’s
statement that the chapter does not authorize or permit an unconstitutional or illegal machine can
15 only mean that such a machine cannot be licensed or registered under chapter 2153. And if the
machine cannot be licensed under chapter 2153, the taxes, zoning restrictions, and other provisions
that regulate licensed and registered machines do not apply to those machines.
Because of this, we cannot accept the court of appeals’ construction of section 2153.003.
Courts must construe statutes to avoid constitutional infirmities. Barshop v. Medina Cty.
Underground Water Conservation Dist., 925 S.W.2d 618, 629 (Tex. 1996). The legislature is
commanded to pass laws to prohibit lotteries, and construing section 2153.003 to apply to lotteries
has the effect of legitimizing them. The text permits another reasonable construction that abides
by the statute’s plain language while avoiding those constitutional infirmities. Chapter 2153 does
not “authorize” (give legal authority to) or “permit” (consent to or allow to operate by law)
unconstitutional or illegal machines. If it “applied to” unconstitutional or illegal machines, it would
necessarily give legal authority to them and allow them to legally operate, in violation of the
constitution. We conclude that, in light of section 2153.003, chapter 2153 does not apply to
unconstitutional or illegal machines.
B. Constitutionality and legality
Because we conclude that chapter 2153 does not apply to unconstitutional or illegal
machines, the next question is whether the Operators’ machines are unconstitutional or illegal.
Contrary to the court of appeals’ conclusion, that question is relevant and justiciable because if the
machines are unconstitutional or illegal, then chapter 2153 does not apply to them and thus cannot
16 preempt the City’s ordinances. 20 But as described, the court of appeals did not address that
question. Because the question presents an important issue of first impression in this Court, we
decline to address the question in the first instance and defer instead for the court of appeals to
address it after full briefing and argument by the parties. See Pidgeon v. Turner, 538 S.W.3d 73,
87 (Tex. 2017) (declining to “render a final ruling on the merits before the parties have had a full
opportunity to make their case”); Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427,
439 (Tex. 2016) (remanding case for “court of appeals to address [unaddressed] questions in
the first instance”).
III. Conclusion
We hold the court of appeals erred by concluding that the issue whether the Operators’
machines are constitutional and legal is irrelevant to the question whether chapter 2153 preempts
the City’s ordinances and is therefore non-justiciable. We reverse the court of appeals’ judgment
and remand the case to that court so that it can address and resolve that issue in the first instance.
_____________________ Jeffrey S. Boyd Justice
Opinion delivered: May 8, 2020
20 Of course, a finding that the machines are unconstitutional or illegal would also lead to the question whether the City could license, regulate, and tax them through the City’s ordinances. That question, however, has not been raised in this case.