A LOTTERY.

Auckland Star, Volume LXIV, Issue 246, 18 October 1933, Page 5

A LOTTERY.

COURT'S DECISION.

-MULTIPLICATION BUREAU." 1 MANAGER FINED £5 1/. Reserved deci.ion was given by Sir. flTyvern Wilson, S.SI., to-day in the case {George Kennedy Elliot SlcLcan, who had appeared on summons at the Police Court on a charge of managing a lottery known as "The Multiplication Bureau."' jij living judgment. Sir. Wilson said tie defendant was the manager of a company called Multiple Systems, Ltd. "The company is comH.rtJng what I may call a scheme °- fi" iUloe which it calls the Multiplication Bureau. The nature of that scheme; is set out fully 111 a -amphlet published under the title of 'The Slagic of Slultiplication,' which was put in as evidence in the case. Statements in Pamphlet. "The scheme may be summarised: A person may become a member of the bureau by" payment of 20/. He may then enrol new members, each of whom must pay - 1 - 1 /. Tl 'e pamphlet says: — 'Your first step upon becoming a member of the Multiplication Bureau is to invite four of your friends to also become members, and thus enjoy the same money-making privileges as you are receiving. When you have persuaded your fourth friend to become a member, you are paid a cash commission of 10/. When this, fourth member of yours in turn persuades three of his friends to become members you receive three additional lots of commission of 10/ each (30/). And then, when those latest three members each obtain new members you receive a further nine commission payments of 10/ each ( £4 10/). And so on. On each of the tirst three members enrolled by every member resulting from the original activities of your fourth member, you receive 10/ commission, until your total commissions for the year amount to £1.500.

"Can you follow the workings of this unique system? Just In case you may not have grasped the operation thoroushlv, let us go through the procedure -Cow, follow this closely: When each of the first three new members (upon which you received 30/ commission) obtained by your fourth member, in turn get three more new members (that is, nine new members between them),, you receive a further nine commissions* amounting to £4 10/. This procedure repeats itself until your total commissions for any one year amount to £1500. Comment on Scheme. "The bureau also offers to members cash prizes (said to be colossal) to be donated each month as rewards to members who obtain the largest number of 'direct' or 'indirect' enrolments. I have the instructive evidence of Professor Segar, who tells nie that assuming that the bureau commenced with only one member, 011 completion of the 10th cycle of succession the membership would have reached many millions. "The business term 'commission,' as applied to the moneys to be received by a member, is clearly a misnomer. The member, after 110 has enrolled four others, does no more to earn the later payments. It was submitted that his position is the same as that of an agent with an overriding commission, but I cannot accept the analogy. That is a commercial transaction, whereby goods are disposed of for value on terms of reward for services rendered. Hie moneys promised as commission may be more rightly designated prizes to be paid on the happening of future events. The present scheme is quite unsound economically, and if extended to the whole population it must cease for want of new members and result in a debit balance.

"It seems to me that only the first or early members are likely to receive any substantial reward, and that the possibility of even the first member receiving payments amounting to £1500 per annum is too remote to be worth consideration. The receipt of the 'indirect commissions' and winning of cash prizes is entirely a fortuitous happening beyond the control of the member and dependent upon quite unpredictable facts. It depends upon the ever-changing circumstances of the lives anil upon the impulses of many thousands of unknown persons. I think it k a matter of chance." The magistrate said he was of opinion that the scheme was a lottery within the principle laid down in Minty _v. Sylvester (1915), in which Mr. Justice Lush Eaid: "The question in every case must be whether, looking at the substance of the matter, the money was awarded according to chance." The defendant was convicted and fined 1/, with costs 10/, witness 21/, and solicitor 21/.

Application has been made to fix security of costs of appeal.