Do Obama’s Recent Fundraising Letters Violate Federal Anti-Gambling Laws?

Do any attorneys want to weigh in on this question?
The Obama campaign has already been warned by Minnesota law enforcement officials against running “Backstage with Barack” and “Dinner with Barack” lotteries in Minnesota and possibly Colorado. Minnesota’s Department of Public Safety counseled Obama for America to provide a means of entering to win a chance to meet Barack Obama without making a donation, which would remove the “payment of consideration” element that makes the scheme an illegal lottery. The Obama campaign agreed to do so, but it apparently broke this promise to Minnesota’s law enforcement agencies as of October 31 2008.

We are not attorneys and cannot give legal advice, but Missouri’s definition of illegal gambling is typical of that in most states. Bracketed material relates these definitions to Friday’s E-mail from the Obama campaign, “Will You Join Me on Election Night?” We have meanwhile received three similar E-mails since then. Note also that Barack Obama, an attorney, signed his name to the solicitation that appears below.

    Three elements make up an illegal promotion:

    1. Prize is any benefit, cash or property awarded to a winner. [“If you’re selected, you can bring a guest, and we’ll fly you in and put you up in a hotel for the night. You’ll go backstage at the big event and — no matter what happens — you’ll have a front row seat to history as we celebrate the supporters who got us over the finish line.”]
    2. Chance means the winner is chosen by “luck” with little or no skill or ability involved. [“We’re saving some of the best seats in the house for 5 people who make their first donation to the campaign before Sunday at midnight. If you’re selected…”]
    3. Consideration is the exchange of something of value for the opportunity to participate in the game. [“Any donation counts — whatever you can afford. Show your support at this crucial time with a donation of $5 or more, and you could join me on Election Night”]

In addition, Federal law prohibits illegal gambling.

    U.S. Code Title 18, Chapter 95 (“Racketeering”), § 1955, ” Prohibition of illegal gambling businesses”
    (a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined under this title or imprisoned not more than five years, or both.
    (b) As used in this section—
    (1) “illegal gambling business” means a gambling business which—
    (i) is a violation of the law of a State or political subdivision in which it is conducted;
    (ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
    (iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.

    (2) “gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
    (3) “State” means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.
    (c) If five or more persons conduct, finance, manage, supervise, direct, or own all or part of a gambling business and such business operates for two or more successive days, then, for the purpose of obtaining warrants for arrests, interceptions, and other searches and seizures, probable cause that the business receives gross revenue in excess of $2,000 in any single day shall be deemed to have been established.
    (d) Any property, including money, used in violation of the provisions of this section may be seized and forfeited to the United States. All provisions of law relating to the seizures, summary, and judicial forfeiture procedures, and condemnation of vessels, vehicles, merchandise, and baggage for violation of the customs laws; the disposition of such vessels, vehicles, merchandise, and baggage or the proceeds from such sale; the remission or mitigation of such forfeitures; and the compromise of claims and the award of compensation to informers in respect of such forfeitures shall apply to seizures and forfeitures incurred or alleged to have been incurred under the provisions of this section, insofar as applicable and not inconsistent with such provisions. Such duties as are imposed upon the collector of customs or any other person in respect to the seizure and forfeiture of vessels, vehicles, merchandise, and baggage under the customs laws shall be performed with respect to seizures and forfeitures of property used or intended for use in violation of this section by such officers, agents, or other persons as may be designated for that purpose by the Attorney General.
    (e) This section shall not apply to any bingo game, lottery, or similar game of chance conducted by an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended, if no part of the gross receipts derived from such activity inures to the benefits of any private shareholder, member, or employee of such organization except as compensation for actual expenses incurred by him in the conduct of such activity.

As far as we know, Obama for America is not “an organization exempt from tax under paragraph (3) of subsection (c) of section 501 of the Internal Revenue Code of 1986, as amended.” We are not attorneys and cannot give legal advice on how this law may apply to the Obama campaign’s four recent E-mail solicitations, all of which include the following elements:

    (1) Payment of consideration (a donation of $5 or more) as a condition of entry, noting that none of the letters nor the Web pages they reference say you can enter without making a donation
    (2) An element of chance (“you may be selected”)
    (3) A prize (“we’ll fly you in and put you up in a hotel for the night. You’ll go backstage at the big event”)

Here are sample E-mails for the record, with full headers.

    From – Fri Oct 31 17:52:56 2008
    X-UIDL: 6246-1200724588
    X-Mozilla-Status: 1001
    X-Mozilla-Status2: 00000000
    Received: from mta-inap8.bluestatedigital.com ([69.25.74.166])
    by vms172051.mailsrvcs.net
    (Sun Java System Messaging Server 6.2-6.01 (built Apr 3 2006))
    with ESMTP id <0K9M00GIPFLHSF42@vms172051.mailsrvcs.net> for
    [our E-mail address]; Fri, 31 Oct 2008 15:58:29 -0500 (CDT)
    Received: by mta-inap8.bluestatedigital.com (Postfix, from userid 501)
    id 0C448BE3E660B; Fri, 31 Oct 2008 16:21:22 -0400 (EDT)
    Date: Fri, 31 Oct 2008 16:21:22 -0400
    From: Barack Obama
    Subject: Will you join me on Election Night?
    X-Originating-IP: [69.25.74.166]
    To: [our E-mail address]
    Reply-to: info@barackobama.com
    Message-id: <23f32d9e4a53b926864e42db8f4d426f@localhost.localdomain>
    MIME-version: 1.0
    X-Mailer: PHPMailer [version 1.72-blue_mailer]
    Content-type: multipart/alternative;
    boundary=b1_23f32d9e4a53b926864e42db8f4d426f
    X-Priority: 3
    X-maillist-id: 70b185d7ca9f3200
    X-maillist-guid: CgdXWAJtUQQHAggAVVJQAFpfAwAEBw

    –b1_23f32d9e4a53b926864e42db8f4d426f
    Content-Type: text/plain; charset = “iso-8859-1”
    Content-Transfer-Encoding: quoted-printable

    William —

    I want you to be there with me on Election Night when the results come =
    in.=20

    We’re planning a big event that will include tens of thousands of =
    supporters in Grant Park in downtown Chicago.

    We’re saving some of the best seats in the house for 5 people who make =
    their first donation to the campaign before Sunday at midnight.

    If you’re selected, you can bring a guest, and we’ll fly you in and put =
    you up in a hotel for the night. You’ll go backstage at the big event and =
    — no matter what happens — you’ll have a front row seat to history as we =
    celebrate the supporters who got us over the finish line.

    Any donation counts — whatever you can afford. Show your support at this =
    crucial time with a donation of $5 or more, and you could join me on =
    Election Night:

    https://donate.barackobama.com/backstage2

    This movement for change has been a testament to the power of ordinary =
    Americans coming together to achieve extraordinary things.

    I look forward to having you there on Election Night.

    Thank you,

    Barack

    Please donate: https://donate.barackobama.com/backstage2

    ———————————————————————
    Paid for by Obama for America
    This email was sent to: [our E-mail address]
    To unsubscribe, go to: http://my.barackobama.com/unsubscribe

Note that Barack Obama approved the above solicitation

    From – Sat Nov 01 12:21:36 2008
    X-UIDL: 6259-1200724588
    X-Mozilla-Status: 1001
    X-Mozilla-Status2: 00000000
    Received: from mta-inap7.bluestatedigital.com ([69.25.74.173])
    by vms172071.mailsrvcs.net
    (Sun Java System Messaging Server 6.2-6.01 (built Apr 3 2006))
    with ESMTP id <0K9N00C8H7MD6J30@vms172071.mailsrvcs.net> for
    [our E-mail adddress]; Sat, 01 Nov 2008 02:03:49 -0500 (CDT)
    Received: by mta-inap7.bluestatedigital.com (Postfix, from userid 502)
    id 0DF3D17C67E9F; Sat, 01 Nov 2008 02:22:38 -0400 (EDT)
    Date: Sat, 01 Nov 2008 02:22:38 -0400
    From: “David Plouffe, BarackObama.com”
    Subject: Unexpected opportunity
    X-Originating-IP: [69.25.74.173]
    To: [our E-mail adddress]
    Reply-to: info@barackobama.com
    Message-id: <86b29dcfdb0d6efc2bcc971c3cfbfea4@localhost.localdomain>
    MIME-version: 1.0
    X-Mailer: PHPMailer [version 1.72-blue_mailer]
    Content-type: multipart/alternative;
    boundary=b1_86b29dcfdb0d6efc2bcc971c3cfbfea4
    X-Priority: 3
    X-maillist-id: 70e88929b2f39bee
    X-maillist-guid: CgdXWAJtUQQACwgMA1xRUwUKCVBRUg

    William —

    I’m writing to report that we’re seeing a surge of support in states we =
    didn’t expect to be close contests, including Georgia and North Dakota.

    But the latest battleground is a major opportunity:

    John McCain’s home state of Arizona — where we go on the air today.

    Democrats haven’t been able to compete in these states in years — and =
    each could open a new path to victory on Election Day. Make a donation of =
    $5 or more today to expand our efforts in these new battleground states:

    https://donate.barackobama.com/frontrow2

    As a bonus, any donation you make today means you could be selected for a =
    trip to join Barack in Chicago on Election Night. We’ll fly you and a =
    guest in, put you up in a hotel, and make sure you have some of the best =
    seats for our huge public event with tens of thousands of supporters.

    Volunteers and staff are on the move in these new battleground states, and =
    if we can provide them with the right support, they could put us over the =
    top four days from now.

    We can’t take anything for granted, and this election is too important to =
    ignore any potential path to victory. We need your help right now.

    Please make a donation to help us change the electoral map, and bring a =
    real change to our country:

    https://donate.barackobama.com/frontrow2

    It’s a volatile political landscape, and in the final four days we have to =
    take the fight to our opponents everywhere we can.

    Thank you,

    David

    David Plouffe
    Campaign Manager
    Obama for America

    P.S. — If you cannot make a donation, you can still help get us across =
    the finish line by volunteering to help get out the vote:

    http://my.barackobama.com/november

    Last chance to donate: https://donate.barackobama.com/frontrow2

    ———————————————————————
    Paid for by Obama for America
    This email was sent to: [our E-mail address]
    To unsubscribe, go to: http://my.barackobama.com/unsubscribe

https://donate.barackobama.com/frontrow2 does not say you can enter the drawing without making a donation, although previous such pages did so because of the Obama campaign’s interaction with Minnesota’s Department of Public Safety.

    Make a Donation to Get a Front Row Seat to History

    You could be there with Barack on Election Night when the results come in.

    We’re planning a big event that will include tens of thousands of supporters in Grant Park in downtown Chicago.

    Some of the best seats are reserved for 5 people who give for the first time before midnight on Sunday, November 2nd.

    You and a guest will be flown to Chicago, put up in a hotel, and brought backstage for the biggest night of the campaign.

    Make a donation and you could join Barack on Election Night.

    To comply with Federal law, we must use best efforts to obtain, maintain, and submit the name, mailing address, occupation and name of employer of individuals whose contributions exceed $200 per calendar year.
    employer
    occupation
    Amount
    $25 $100 $500 $2,300
    $50 $250 $1,000 Other: $
    Credit Card
    Visa MasterCard American Express Discover
    card number
    expiration

    You will be prompted to provide your PayPal account information upon clicking the ‘Process Contribution’ button
    Legal Compliance
    Check this box to confirm that the following statements are true and accurate:

    1. I am a United States citizen or a lawfully-admitted permanent resident.
    2. I am at least 16 years old.
    3. This contribution is not made from the general treasury funds of a corporation, labor organization or national bank.
    4. This contribution is not made from the funds of a political action committee.
    5. This contribution is not made from the treasury of an entity or person who is a federal contractor.
    6. This contribution is not made from the funds of an individual registered as a federal lobbyist or a foreign agent, or an entity that is a federally registered lobbying firm or foreign agent.
    7. The funds I am donating are not being provided to me by another person or entity for the purpose of making this contribution.

    Donating Offline: If you would prefer to contribute by mail, send a check to: Obama for America, P.O. Box 802798, Chicago, IL 60680
    Donating Monthly: Click here to make a recurring donation.
    Americans Abroad: Click here to make a donation.
    Your contribution is not tax-deductible for federal income tax purposes. An individual may contribute a maximum of $2,300 per election (the primary and general are separate elections). By submitting your contribution, you agree that $2,300 is designated for the general election. Offer void where prohibited by law.

Note that there is no statement to the effect that you can enter without making a donation (“payment of consideration”).

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One Response to “Do Obama’s Recent Fundraising Letters Violate Federal Anti-Gambling Laws?”

  1. US Election On Best Political Blogs » Blog Archive » Do Obama’s Recent Fundraising Letters Violate Federal Anti … Says:

    […] Do Obama’s Recent Fundraising Letters Violate Federal Anti … Received: by mta-inap8.bluestatedigital.com (Postfix, from userid 501) id 0C448BE3E660B; Fri, 31 Oct 2008 16:21:22 -0400 (EDT) Date: Fri, 31 Oct 2008 16:21:22 -0400 From: Barack Obama Subject: Will you join me on Election Night? … […]

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