New members are also given the option of joining the organization without participating in the recruitment of new members. A also receives four more identical brochures. When the latter people become members and receive their membership materials from Respondent, a will be No. 6 on the list, and B. C. D, and E will occupy the No. 7 position on their respective cards. According to the plan, B, C, D, and E would then each sell four memberships. As the market becomes saturated, the chance of receiving money diminishes.
All members receive certain benefits from the Respondent as a result of joining the organization.
Respondent is engaged in conducting a lottery or scheme for the distribution of money by chance. Conclusions of Law 1. A simple chain letter has been held to constitute a lottery. United States v. 21 Items of Mail , Nos. However, Respondent argues that its plan does not contain all the requisite elements of a lottery due to certain distinguishing characteristics.