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UNITED STATES v. RICH

April 3, 1950

UNITED STATES
v.
RICH ET AL. UNITED STATES V. CAMARRATA ET AL.



The opinion of the court was delivered by: Wham, Chief Judge.

The above cases present the same fundamental issue for decision. The indictment in each case charges the defendants with unlawful use of the mails in violation of section 1302 of Title 18 of the United States Code Annotated. Each indictment also contains a count charging a conspiracy to violate the same statute.

Defendants, in each case, have filed their motion to dismiss the indictment as being insufficient both in form and substance. Though open to criticism, both indictments seem to state the offenses therein charged in terms which inform the defendants of the offenses with which they are charged so as to enable them to prepare their defenses; also to protect them against any possible double jeopardy. Without setting forth any factual details of the scheme the indictment in each substantive count charges the offense in the words of the statute and exhibits the objectionable mail matter alleged to have been mailed in violation of the statute. From the matter alleged to have been mailed the character of defendants' business sufficiently appears to enable the court to determine whether the conclusion in the indictment that the mail matter concerns a lottery, gift enterprise, or similar scheme within the meaning of the statute has foundation. The alternative pleading of the offense in the words of the statute is not bad as used here for the reason that the terms "lottery, gift enterprise, or similar scheme", as used in the statute and in the indictment, in the final analysis, is but a single broad term applicable only to a scheme having the essential characteristics of a lottery though it may differ ever so radically in form from the usual lottery. The conspiracy count in each indictment, though awkwardly drafted, when taken as a whole states the real conspiracy the pleader had in mind.

From the face of the indictments it appears that, in each case, the defendants are engaged in "bookmaking" activities in connection with which bets or wagers are solicited and taken on the outcome of sporting events such as horse racing and baseball, as well as upon elections and other events of uncertain outcome. They use the mails in advertising and in conducting those businesses. It is such uses of the mails that are charged in these indictments as violations of said section 1302, which, as far as pertinent, reads:

"Whoever knowingly deposits in the mail, or sends or delivers by mail;

"Any letter, package, postal card, or circular concerning any lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance;

"Any lottery ticket or part thereof, or paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest in or dependent upon the event of a lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance;

"Shall be fined", etc.

Unless the activities of the defendants, as shown on the face of the indictments, come within the meaning of the words "lottery, gift enterprise, or similar scheme", as used in the statute, the indictments cannot be upheld. Their schemes must have the general characteristics of a lottery. The statute being highly penal its terms must receive strict construction and its reach limited within its meaning as so construed.

Definitions of a "lottery" generally agree that it is a scheme for the distribution of prizes by lot or chance and that the essential elements of a lottery are (1) consideration, (2) prize, and (3) chance. As reiterated in different parts of the statute here under consideration it is aimed at schemes offering prizes dependent in whole or in part upon lot or chance. Do the schemes of bookmaking as shown to have been operated by defendants in the indictments constitute schemes for the distribution of prizes by lot or chance and in them do we find the essential elements of consideration, prize and chance?

"Bookmaking", as applied to horse racing, has been defined as follows: "It is a business in which the bookmaker offers bets at certain odds on particular horses in the races and takes all such bets as persons may choose to make with him at the odds offered and upon the receipt of money from the persons willing to bet with him, the bookmaker issues tickets to them showing the terms of the bet, and, if the horses backed by the bookmaker lose, he pays the winners, and if the horses win, he keeps the money received from the customers and pays out nothing." 27 C.J. Sec. 60, p. 979, Footnote 26, 38 C.J.S., Gaming, § 1.

Except as to bets offered on horses that may not run, the bookmaking schemes of defendants, as shown by the indictments, appear to have been operated substantially within the terms of the above definition whether applied to horse racing or to other events.

When an individual places a bet with the bookmaker each stands to win or lose dependent on the outcome of the event. In such transaction a consideration is paid by the individual in the form of a stake which he risks on the uncertain outcome of the event in hope of winning more.

It has been said, and perhaps it is as nearly an accurate definition as can be framed, that as applied to a lottery scheme a prize may be anything of value offered as an inducement to participate in the scheme. Wherefore, for the purposes of this decision, under the broadened conception of a lottery scheme, the winnings the bettor hopes to receive constitutes a prize within the meaning of the lottery statute. Since there appears to be a consideration and a prize, within the meaning of the statute, it would seem that whether bookmaking as conducted here is a lottery or similar scheme offering prizes dependent in whole or in part upon lot or chance depends upon whether it can be said that under defendants' schemes the winnings, if any, are awarded, or distributed by "lot or chance", as those words are used in the statute.

It has been said concerning "chance" that "as one of the essential elements of a lottery, the word has reference to the attempt to attain certain ends, not by skill or any known or fixed rules, but by the happening of a subsequent event, incapable of ascertainment or accomplishment by means of human foresight or ingenuity." 17 R.C.L. 1223. The most common illustration of lot, or chance, in the sense those terms are used in the definition of a lottery, is the drawing of a number from a container holding many numbers, by a blindfolded person. Other illustrations drawn from court decisions may be used. In this circuit District Judge Grosscup, in oral instructions to a jury, United States v. McDonald, D.C., 59 F. 563, 565, affirmed, MacDonald v. U.S., 7 Cir., 63 F. 426, discussed in philosophical fashion the issues involved in a prosecution under the federal lottery statute as it was in 1893, 26 Stat. 465, as applied to a scheme wherein the value and the ultimate payment, of ...


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