NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $// Declaratory Ruling, Greater New Orleans Broadcasting Association, DA 95-709 //$ $/ 073.1211 Broadcast of Lottery information $///DA 95-709 4/3/95///$ ///newjob/// FEDERAL COMMUNICATIONS COMMISSION DA 95-709 Washington, D.C. 20554 March 31, 1995 IN REPLY REFER TO: 8210-RHW 94120133 Released: April 5, 1995 Greater New Orleans Broadcasting Association c/o Ashton R. Hardy, Esquire Hardy & Carey 111 Veterans Boulevard Suite 255 Metairie, Louisiana 70005 Dear Mr. Hardy: This letter is in response to your request, dated December 14, 1994, for a declaratory ruling concerning the propriety of broadcasting advertisements promoting a "Gift-A-Day Giveaway" contest conducted by the Isle of Capri Casino (the "Casino") located in Biloxi, Mississippi, under the federal anti-lottery provisions set forth in 18 U.S.C.  1304 et seq., and Section 73.1211 of the Commission's Rules. You state that this declaratory ruling is requested on behalf of the Greater New Orleans Broadcasting Association ("GNOBA"), a trade association which represents 26 radio and television stations licensed to serve the greater New Orleans market. You describe the promotion as follows. In order to participate in the contest, entrants must obtain either a free coupon from their local daily newspaper or a free card from a booth located at the entrance to the Casino. The Casino is located approximately 90 miles east of downtown New Orleans via Interstate Highway 10, and the member stations of the GNOBA seeking to broadcast advertisements for this contest are located at distances ranging from 40 to 90 miles from the Casino. The contest entrants must also obtain an "Island Gold Card," which is also available free of charge. In order to obtain the Island Gold Card, the entrant must present himself at the "Island Gold Card" booth at the entrance to the Casino and give his name and address to the booth attendant. Entrants must then present their Island Gold Card and the free coupon or card at the Gift-A-Day Giveaway booth, also located at the entrance to the Casino. The entrant then receives a Gift-A-Day game card. Once each day during the contest, an entrant may present his Gift-A-Day game card at the Gift-A-Day booth at the entrance to the Casino. The booth is open 10:00 am to 10:00 pm every day. A Casino employee will then scan the game card (thereby performing a drawing) and immediately inform the entrant whether he has won one of the prizes offered in connection with the contest. According to your request, entrants are not required to purchase anything or participate in any activities at the Casino to enter, and all entrants are allowed only one chance a day to win a prize, whether they are Casino customers or do not even enter the Casino. As you are aware, the U.S. Code, 18 U.S.C.  1304, and Section 73.1211(a) of the Commission's Rules prohibit the broadcasting of any advertisement or information concerning any lottery, with certain enumerated exceptions. A lottery contains the elements of chance, prize, and consideration. As your request recognizes, the elements of chance and prize appear to be present in the Gift-A-Day Giveaway. The central question here is whether the requirement that entrants must generally travel 40 to 90 miles in order to enter the contest constitutes consideration. Section 73.1211(b) of the Commission's Rules states in relevant part that the element of consideration exists where winners "are required to furnish any money or other thing of value . . . ." In Public Notice Concerning Applicability of Lottery Statute to Contests and Sales Promotions, 18 FCC 2d 52 (1969), the Commission recognized that certain prerequisites for entry in a contest, such as visiting the place of business of the promoter of a contest, would not ordinarily constitute consideration: Clearly, consideration is present when the contestant is required to pay money or give something of value for the chance to win a prize. Therefore, the promotional scheme must not require a purchase or the risking of money or other things of value. The mere acts of appearing, registering and securing free paraphernalia, standing alone, do not constitute sufficient consideration to support a finding of a lottery. See Federal Communications Commission v. American Broadcasting Company, Inc., 347 U.S. 284 (1954); Caples Co. v. United States, 243 F.2d 232 (1957), and Garden City Chamber of Commerce v. Wagner, [100 F. Supp. 769 (E.D.N.Y. 1951)]. 18 FCC 2d at 52. In the present case, we do not believe that the entrant who must travel a certain distance to appear at the promoter's place of business in order to enter the contest has provided any "money or thing of value," even if that travel takes up to an hour or two of the entrant's time. The decisions cited above found consideration to be lacking where a prospective participant, in order to enter the drawing, had to travel to the promoter's place of business within the station's service area. In the case of a Class C FM station or a full power television station, that local service area may extend 80 to 100 miles from one end to the other. No logical distinction can be drawn where the travel to the promoter's place of business is of a comparable time or distance but extends beyond the service area. It would be an anomalous result, for example, for the Commission to find consideration to exist where an entrant travels some distance beyond the service area, but no consideration to exist where another entrant travels a comparable or even greater distance within the service area. In addition, while there may be some cost to the entrant to travel the described distance of 40 to 90 miles (in gasoline costs, or tolls, or bus fare, for example), we find it significant that such expenditures do not flow, directly or indirectly, to the promoter of the contest, the Casino in the present case. In Greater Indianapolis Broadcasting Co., Inc., 44 FCC 2d 37 (1973), the Commission addressed the issue of consideration in an analogous context. In that case, in order to enter a contest drawing, participants had to play a round of 18 holes of golf at any local golf course, and then mail in the scorecard (signed by the course professional) to the station, which then conducted a drawing from submitted scorecards for prizes. The golf courses where entrants played were not involved in the promotion, and the station received no part of the greens fees paid by entrants to the golf courses where they played. The Commission found that the element of consideration was not present: We base this conclusion upon the absence of any indication that consideration substantial enough to support a finding that there was a lottery flowed, directly or indirectly, from the participants to the promoter. While it is clear that where the purchase of a product or service entitles the buyer to a chance at a prize there is adequate consideration, Horner v. United States, 147 U.S. 449, we know of no case interpreting the federal lottery statutes where a lottery was found to exist without the receipt of the consideration by the promoter. . . . If the participants' activity relied on in [FCC v. ABC and Caples Co. v. U.S.] was insufficiently substantial, it is, we believe, difficult to sustain the proposition that there is a lottery without any additional benefit to the promoter (here WXLW), even though the participants in the contest may make some payment to someone else in order to participate, as long as there is no indirect flow through of the payment to the promoter. 44 FCC 2d at 39-40 (footnote omitted). In the present case, because any travel-related expenditures incurred by entrants appearing at the Casino do not flow to the Casino itself, the lottery element of consideration does not appear to exist. Additionally, the expenditure of time and effort by would-be entrants is not so substantial or excessive when compared to that required of entrants in other contests which the Commission has found not to be lotteries. For example, in the Greater Indianapolis case discussed above, entrants were required to spend four to six hours playing a round of golf, an expenditure of time and effort that does not differ quantitatively from that involved in driving to and from the Casino in the present case. It could be suggested that the effort expended by entrants in traveling the distance to the Casino may indirectly inure to the benefit of the Casino because, after traveling that distance and entering the free contest at the Casino's door, the entrant may be inclined to spend a few hours at this particular Casino's gambling tables. However, we find such potential benefit to be too speculative and remote to constitute consideration under the criminal federal lottery statute. The entrant in the Gift-A-Day Giveaway is not required to spend any money or additional time at the sponsoring Casino, and there are many other activities available in the destination community of Biloxi. In this respect, the Gift-A-Day Giveaway discussed herein differs as well from other cases in which consideration was found to exist because, in addition to appearing at the promoter's place of business, an entrant was required to remain on the premises for an indeterminate period of time until "free" entries were distributed. See, e.g., Letter to Rolla Cleaver, Esquire, Mass Media Bureau, July 31, 1990 (free entries distributed randomly "throughout the day" to persons present in the casino whether gambling or not, held to constitute consideration: ". . . the Commission believes that the effort expended by a participant to be present throughout the day in the Palace Station hotel, casino and restaurant areas is a benefit to the promoter and constitutes consideration."). Additionally, from the description of the contest you provided, there does not appear to be any advantage or additional chances afforded to entrants who become customers of the Casino; all entrants are limited to one entry per day, with no "bonus" chances afforded for customers. Compare, WTMJ, Inc., 7 FCC Rcd 4957 (MMB 1992); KLAS, Inc., 7 FCC Rcd 2923 (MMB 1992). For these reasons, we do not believe that consideration is present in the Gift-A-Day Giveaway. The conclusions stated herein are based on our understanding of the contest as described by you. Should our understanding be incorrect, or the operation of the game differ from your description, our conclusions could be different. We trust that the foregoing is responsive to your request. Sincerely, Norman Goldstein, Chief Complaints and Investigations Branch Enforcement Division Mass Media Bureau