In the Matter of the Complaint Against

 GAMES OF SKILL, INCORPORATED
 3321 W. Dempster
 at Skokie, IL 60076-2411

 P.S. Docket No. 17/139;  
 
 04/25/84
 
 Mason, Randolph D.  

 APPEARANCES FOR COMPLAINANT:
 Thomas A. Ziebarth, Esq.
 Steven B. Caver, Esq.
 Consumer Protection Division
 Law Department
 United States Postal Service
 Washington, DC 20260-1100

 APPEARANCE FOR RESPONDENT:
 Robert F. Klimek, Esq.
 Remington, Kirkland & Klimek
 24 South Wolf Road
 Northlake, IL 60164-2346

This proceeding was initiated on October 12, 1983, when the General Counsel filed a Complaint against Games of Skill, Inc., ("Respondent") which alleges that Respondent is engaged in conducting a lottery or scheme for the distribution of money by chance in violation of 39 U.S.C. § 3005.

Respondent filed a Motion to Dismiss in which it denied the above allegations; Complainant opposed this motion and filed a Cross-Motion for Summary Judgment. Both of these motions were denied by the undersigned on the ground that material issues of fact must be resolved. Cf., Morrow v. State, 511 P.2d 127 (Alaska 1973).

A hearing was held by the undersigned on January 24, 1984, in Chicago, Illinois. Both parties were represented by counsel and afforded full opportunity to be heard, adduce relevant evidence and examine and cross-examine witnesses. On March 20, 1984, the parties filed a Stipulation to Open the Record to admit certain letters and make certain stipulations of fact. This procedure had been afforded the parties by my Order of March 6. The March 20 stipulations and attached exhibits are admitted into evidence.

On or before March 22, 1984, the parties submitted proposed findings of fact and conclusions of law, which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise they have been rejected as irrelevant or contrary to the evidence. Respondent also renewed a Motion for Directed Verdict which I denied at the hearing. In view of my Conclusions of Law, infra, I reaffirm my ruling on that motion. Based on the entire record herein, including my observation of the witnesses and their demeanor, the exhibits and other relevant evidence adduced at the hearing, and the March 20 stipulations and exhibits, I make the following findings of fact and conclusions of law:

1. Respondent is Games of Skill, Inc., 3321 W. Empster, Skokie, IL 60076-2411. Respondent obtains money through the mails at that address in connection with its "Football Challenge" game (RX-L).

2. "Football Challenge" (hereinafter "the game") is a variation of a football pool betting game. Three separate versions of the game were offered to the public; these will be referred to as Game I, II, and III.

3. In Game I the public is told that it can win up to $1,000,000, which is the grand prize. The first place wins $25,000; second place, $10,000; third place, $5,000; fourth place, $1,000; and fifth through one hundredth places each win $100. The contestant enters by remitting $5 plus $1.50 postage and handling. In return he receives a set of game cards for each week of the 16-week National Football League ("NFL") season. Each card enumerates and names the 28 NFL teams that will be playing in the 14 games for that particular week. The participants are asked to (1) pick the 14 winners for the week and (2) to rank those winners in the order that the contestant thinks they are "most likely" to win. Thus the contestant's first choice would be the team that he felt was most likely to win; his second choice would have the second best chance of winning; and so on down to his 14th choice, which he would think would have the least chance of winning. At the end of each week, Respondent gives each contestant points for each winning team chosen. The highest number of points is given for a correct first choice (99 points), and the lowest number given for a correct 14th choice (8 points). The schedule of points is as follows:

Choice Points Choice Points

1 99 8 14

2 75 9 13

3 50 10 12

4 40 11 11

5 30 12 10

6 20 13 9

7 15 14 8

If all teams were correctly picked, the contestant would be awarded 100 bonus points (RX-L).

4. The contestant must submit his game card by mail prior to the games of the week in question, and the envelope must be postmarked no later than a specified date for that week. The postmark date is set forth on each game card and is usually two to five days prior to the first game played in that week (RX-A).

5. After receiving each contestant's game card, Respondent totals the number of points made by that contestant. This procedure is repeated each week, and Respondent keeps a cumulative total of points for each contestant for all weeks played. At the end of the 16-week season, the prizes are awarded to the contestants with the highest cumulative point totals. In addition to the 100 winners mentioned: (first through 100th place), which are awarded solely on the basis of point totals, the $1,000,000 grand prize is awarded to the contestant who picks the winners of every game of the season (RX-L). Finally, the 101st to 1,500th place winners receive a "certificate of accomplishment." In the event of a tie, the cash prizes would be divided (RX-L).

6. Game II was offered for the last eight weeks of the NFL football season. An entry fee of $13.50 plus $1.50 for postage and handling was required. This game was a continuation of Game I, i.e., it was an opportunity for individuals to compete with the original Game I contestants for the same prizes. The Game II contestants were given doubled point values (e.g., 198 points for first choice) since they were only playing eight of the 16 weeks. The million dollar grand prize was eliminated for Game II contestants (RX-M).

7. Game III was open to Game I contestants only. For an additional $15, they could have their points for the fifth, sixth, and seventh weeks totalled separately and could win $500 each week, or a total of $1,500. A contestant could win by scoring 397 points for week #5, 748 points by week #6, or 1127 points by week #7 (RX-N).

8. At the end of the season, the Respondent tabulated the results by computer. The first winner of the contest (Games I and II) was George Ward, who had 5,060 points. The second place winner was Travis Scott with 5,054 points. Thus, only six points separated the winner of the $25,000 prize from the $10,000 prize. Pal Willy won third place ($5,000) with 4,954 points; and Howard Cutright won fourth place ($1,000) with 4,850 points. The fifth place through 100th place each won $100; the 100th place score was 4,642 points (RX-C). At the other end of the scale, the contestant with the lowest number of points had a total score of only 2,010 points (id.). Each of the top four prize winners was a Game II contestant. No one won the $1,000,000 grand prize.

9. When all 3,200 contestants are examined, the average number of winning teams chosen was 7.9576 each week out of the total of 14 games, representing 57% correct (Tr. 68, 75). In contrast to this figure, the sixth place winner, Charlotte Gaimari (4,895 points), picked 75% of the winning teams (Tr. 29).

10. As previously mentioned, the players were required to rank the teams in descending order total most likely winner ranked in first place. Seventy-seven percent of the players got their first choice correct; this percentage of correctness decreased to 50.98% for the 14th choice (RX-D).

11. It is undisputed that expert oddsmakers and bookmakers can pick the winners of NFL football games 75-80 percent of the time (Tr. 30, 61-62). A professional bookmaker sets a "line" or "point spread" between two competing teams in order to equalize the teams and thereby attract bettors from both sides; he makes his profit "in the middle." (Tr. 60-61)

12. In prognosticating the winners and setting the "Line," these professionals analyze a variety of factors. These include home team advantage, weather conditions (including temperature), field conditions, names of injured players, and names of last minute starters (Tr. 50-52, 54). They would also consult publications such as "Football News" which pick winners and give their reasons (Tr. 51).

13. A professional oddsmaker would consider his "most likely" winner to be the team with the largest "line" or point spread. If such a professional had entered the contest in issue, and had arranged his choices according to the "line," he would have had a 65% win ratio with an accumulated point total of 4,582. He would not have been a winner of the contest because the 100th place point total was $4,642 (Tr. 33).

14. Chance plays a large part in the contestant's final score since he is unable to influence the outcome of the individual games; only the teams themselves determine the winner of the football game (Tr. 37). The element of knowledge, research, and skill is also substantially diminished in Respondent's contest because the entries must be postmarked well in advance of the games. Although all players are put on an equal footing in this regard, the greater degree of chance due to such changes as weather and late injuries after the postmark date affects all contestants equally (Tr. 113-114). In addition, the element of chance is multiplied whenever the contest requires a minimum number of correct choices. For example, the 100-200 bonus points for picking all teams correctly in any one week affected the ultimate winners (RX-F, G). Also, the $1,000,000 prize could only be won if all teams for the entire season were picked correctly. Since the experts can only pick 75 to 80 percent of the winners, this accomplishment would necessarily have been based on chance. this

15. The dominant element in determining the distribution of prizes in Football Challenge is chance rather than skill (Tr. 31; entire record). Although skill may have played a part in helping the ultimate winners to achieve their goal, there is no credible evidence from which it could be concluded that chance was not the principal factor in determining their final score. The top four winners, for example, would win prizes ranging from $25,000 to $1,000, but their scores were relatively close together. In some cases, the choice of a single extra winning team during the entire season would have made the difference; this is clearly the case with respect to the first and second place winners. ^1/

1. The only issue for consideration is whether Respondent violated 39 U.S.C. § 3005, which provides for a mail stop order when it is found that

. . . any person is engaged in conducting . . . a lottery, gift enterprise, or scheme for the distribution of money or of real or personal property, by lottery, chance, or drawing of any kind. . . .

The necessary elements of a lottery are the furnishing of a consideration, the offering of a prize, and the distribution of the prize by chance. Brooklyn Daily Eagle v. Voorhies, 181 F. 579, 581 (1910); Tenpen Sales Corporation, P.O.D. Docket No. 2/35 (May 10, 1961); Middle-Class American, Inc., P.S. Docket No. 16/65 (P.S.D. March 26, 1984). The only issue in this case is whether the prizes were distributed by chance.

2. A lottery will be found even in cases where some skill is exercised by the participants if chance is the dominant factor determining the distribution of the prizes. Public Clearing House v. Coyne, 194 U.S. 497 (1904); Cf. Nat. Football League v. Governor of State of Del., 435 F. Supp. 1372 (1977); Collegedale Diversified Enterprises, Inc., P.S. Docket No. 14/29 (P.S.D. Oct. 25, 1983); State v. Globe-Democrat Pub. Co., 110 S.W.2d 705 (1937); Commonwealth v. Laniewski, 173 Pa. Super. 245, 98 A.2d 215 (1953). However, the rule that chance must be the dominant factor is to be taken in a qualitative or causative sense rather than in a quantitative sense. State v. Globe-Democrat Pub. Co., supra, at 717; Nat. Football League v. Governor of State of Del., supra; Seattle Times Company v. Tielsch, 80 Wash.2d 502, 495 P.2d 1366 (1972).

3. The evidence of record establishes that chance is the dominant factor in the instant case. Complainant produced the credible testimony of an expert with extensive experience in sports betting from the FBIP tr. 23). In concluding that chance was the dominant factor in Respondent's game, he noted that professional oddsmakers would not have been prize winners in this game if they had ranked their choice of winners according to the point spread or "line" which reflects extensive research, knowledge, and skill. He also noted the obvious: that it is impossible for any prognosticator to influence the outcome of any football game; only the teams can control that result. In this regard, in Commonwealth v. Laniewski, supra at 217, responding to a claim that football pools are not games of chance, the court said:

Past records, statistics and other data might be consulted and, by reasoning from them, a forecast might be made as to the outcome of any particular game or games. However, there are many unpredictable elements which can and do enter into the eventual outcome. These elements--including the fact that at least twenty-two men are concerned in playing the game--constitute the chance which makes this particular pool a lottery. No one knows what may happen once the game has begun.

This is particularly significant in the instant case because the top-scoring contestants had remarkably close final scores. Thus, the outcome of a single game could have determined, for example, who would get the $25,000 prize rather than the $10,000 prize. Finally, Complainant's expert noted that the element of skill was substantially diminished because the entries had to be postmarked well in advance of the games, with the result that subsequent changes in weather or players would increase the element of chance.

4. Respondent produced two experts who testified that the dominant element was skill. One was a former law enforcement officer who had extensive experience investigating lotteries in New Jersey. Although he obviously knew how sports betting schemes operate, I was not impressed with his ability to differentiate between the elements of chance and skill with regard to the ultimate distribution of prizes. This did not seem to be within his area of expertise. The other expert was a mathematician and statistician with impressive credentials in those fields. He essentially helped Complainant's case with respect to the first stage of the game --picking winners --by testifying that this was essentially a matter of chance. This testimony was based on his own expertise with probabilities and statistics. However, when he testified that the "ranking" of winners was primarily a matter of skill, he was reaching for a conclusion that was not squarely within his expertise. He looked at the fact that some contestants had higher scores than others and concluded that skill provided the difference. There is no reasonable basis for this conclusion, particularly when the scores are close together.

5. I do not disagree with Respondent's experts that skill can play an important role in helping the contestants to attain their goal. But that does not answer the question before me. I must decide whether chance was the dominant factor, in a qualitative or causative sense, in determining the distribution of the prizes. Complainant has proved by a preponderance of the evidence that chance was the dominant factor in this regard.

6. I conclude and hold that Respondent's Football Challenge game constitutes a lottery or scheme for the distribution of money by chance within the meaning of 39 U.S.C. § 3005. The attached Order should be issued.

1/ The record does not disclose the difference between the 100th and the 101st place winners; the former won $100, but the latter won only a "certificate."