Clapp, Jayne and Francis. The opinion of the court was delivered by Clapp, S.j.a.d.
These two proceedings for declaratory judgments have been joined for argument. Each was instituted in this court on petition under R.R. 4:88-10 for the purpose of challenging the validity of the following four rules promulgated by the Legalized Games of Chance Commission:
20. No organization shall hire premises for the holding, conducting or operating of a bingo game except from a qualified organization registered with the Control Commission.
21. No person, firm or corporation, except a qualified organization registered with the Control Commission, shall let or offer to let premises for the holding, conducting or operating of a bingo game.
22. All moneys received for the rental of premises for the holding, conducting or operating of a bingo game must be used exclusively for authorized purposes.
23. No fee for the rental of premises may be paid by any licensee to itself, to its trustees, to a committee of the licensee, or to any organization whose members are the same or substantially the same as the licensee."
One petition is filed by a charity and two religious organizations, all licensed by the City of Passaic under N.J.S.A. 5:8-25 to conduct bingo games. None of them owns premises adequate for the purpose. However, they and other licensees each run a bingo game once a week, either in the afternoon or evening, at "Bingo Hall" located on the second floor of a building in Passaic, New Jersey. They lease it for that purpose from Passaic Auditorium Corp., Inc., a corporation organized in April 1954 (the Bingo and Raffles amendment to the New Jersey Constitution was adopted by the people November 3, 1953), which in turn leases the second floor from the owner of the building. An analysis of the proceeds received from bingo games conducted at Bingo Hall for a period of six months discloses that the rents plus janitorial fees paid Passaic Auditorium Corp., Inc., totalled $1,000 more than what the licensees themselves received from the game. Moreover, it appeared that on every occasion during the period, except three, the maximum prize of $1,000 was awarded. It may be noted, too, that the secretary of the corporation, though he holds 25% of the stock, does not know who the principal stockholder is.
The other petitioner, State Garden, a corporation, subleases a hall in Union City which can accommodate 1,000 players. Like Passaic Auditorium Corp., Inc., it rents to various licensees, each regularly once a week. However, it also uses its hall for certain other purposes.
We conclude (as will appear herein) that we need deal in this opinion only with Rule 20. Consideration is
given, first, to petitioners' contention that the rule is unreasonable and therefore invalid. The burden of proof on the issue falls on petitioners.
The Constitution of New Jersey, Art. IV, Sec. VII, par. 2, as amended November 3, 1953, permits bingo and raffles, but only
"when the entire net proceeds of such games of chance are to be devoted to educational, charitable, patriotic, religious or public-spirited uses * * *." (Italics added)
Furthermore, in dealing with bingo, the Constitution makes it mandatory upon the Legislature to prescribe "restrictions and controls"; and in dealing with raffles, it invests the Legislature with an authority to like effect. In pursuance of this mandate and authority, the Legislature created the respondent Commission and, in imperative terms, laid upon it the following duty (N.J.S.A. 5:8-6):
"It shall be the duty of the commission to supervise the administration of the Bingo Licensing Law and the Raffles Licensing Law and to adopt * * * rules * * * governing * * * the holding, operating and conducting of games of chance * * * which shall have the force of law * * *, to the end * * * that said games of chance shall be fairly and properly conducted for the purposes and in the manner in said laws prescribed and to prevent the games of chance authorized to be conducted by said laws from being conducted for commercial purposes instead of for the purposes authorized in said laws * * *." (Italics added)
It is important to the decision here to bear in mind the Commission's views (expressed in its findings in this case) with respect to the commercialization of bingo:
"* * * the game [of bingo] is tolerable only when conducted on a moderate scale * * * it is harmful when conducted as a commercial enterprise or as an end in itself, or when it grows to such a size that it is a significant factor in the economic or social life of the community, or when, by its size or by the manner of ...