Wisconsin Deluxe Dolij & Dress Co., Etc

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IN THE MATTER OF WISCONSIN DELUXE DOLL & DRESS CQMPANY, DOING BUSINESS AS WISCONSIN DELUXE CORPORATION CO:\lPLADlT, FINDINGS, AND ORDER I~ REGARD TO TOE ALLEGED VIOLATI.JN OI<' SEC. 5 OF AN ACT 01<' CONGRI~SS APPROVED SEPT. 20, 1914 Docket 4830. OomtJlaint, Sept. 2, 1942-Dccision, Mar. 5, 19.j3 Where a corporation, engaged in competitive Interstate sale and distribution of blankets, clocks, tableware, and numerous other artlcles- Supplif>d its customers with assortments of its said merchandise, together with Bingo sets, through use of which the fortunate participant who was able to mark oft on his caru a vertical, horizontal or diagonal line mode up of five numbers drawn by oprrator received one of salu articles being thus distributed, value of which was in excess of money paid, others rccciv!ng nothing; and Thrr<•by supplied to and placed In the hands of its customers or operators means of conducting lotteries In the sale of Its merchandise In accordance with such plan involving sale of a chance to procure an article at much less than Its normal retail 11rice, contrary to an established public policy of the United States Government, anu In competition with many who uo not w•e any miles method contrary to public policy; With the result that many persons were attracted by Its sales plan anu the element of chance Involved therein, and were thereby induced to buy and sl'll Its merchandise in preference to that of Its aforesaid competitors; and with tendt>ncy and capacity, bt>Cause of said game of chance, to divert trade unfairly to it from them:

Ilcld, 'tbnt such ncb.! and practices, under the circumstances set forth, were all to the prejudice and Injury ot the public nnd comprtltors, anu constitutf'd unfair methods ot competition in commerce and untalr acts and practices therein.

11/r. J. lV. Brookfield, Jr., for the Commission. Mr. l/arvey 0. Ilartwig, of Milwaukee, Wis., for ref':pon<lent. COI\lplaint Pursun.nt to the provisions of the Feucrnl Trade Commission Act, and by virtue of the authority wsted in it by sniu net, the Fcdrrnl Trade Commission, having reason to believe that 'Visconsin Deluxe Doll & Drrss Co., n. corporation, trnuing as Wisconsin Deluxe Corporation, herl'innftH referrl'd to as respondent, has violated the provisions of the saiu net, nn<l it appearing to the Commission that a proceeding by it in respect thereof would be in the interest of the WISCONSIN DELUXE DOLL & DRESS CO., ETC. 251 2i:l0 Complaint public, hereby issues its complaint, stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, 1Visconsin Deluxe Doll & Dress Co., is a corporation, trading as Wisconsin Deluxe Corporation, with its principal office and place of business located at 1902 North Third Street, Milwaukee, 1Vis. Respondent is now, and has been for some time last past, engaged in the sale and distribution of blankets, clocks, tableware, kitchenware, luggage, fishing tackle, lamps, electric fixtures, and numerous household articles and other articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. Respondent causes and has caused said merchandise, when sold, to be transported from its aforesaid place of business in Milwaukee, 1Vis., to purchasers thereof at their respective points of location in the various States of the United States other than the State of 1Visconsin, and in the District of Columbia." There is now and has been for some time last past a course of trade by respondent in said merchandise in commerce Let\Yera a1Hl among the various States of the United States and in the District of Columbia.

In the course and conduct of said business respondent is and has he<:>n in competition with other corporations and with individuals and firms engaged in the sale and distr~bution of like or similar articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. l)AR. 2. In the course and conduct of said business as described in paragraph 1 hereof, respondent, in selling and distributing its said merchandise, has supplied its customers with assortments of said mt'rchandise, together with certain paraphernalia known as Bingo sets, by means of which said merchandise is sold and distributed to the purchasing or consuming public in a manner which im·olves the operation of a game of chance, gift enterprise or lottery scheme. One of said Bingo sets consists of n. large master card or tally sheet containing 75 numbers, a number of smaller Bingo cards on each of which appears 24 numbers arranged in a square, which numbers correspond to the numbers on the tally sheet, and a number of small wooden square<:>s on each of which appears one of the numbers from 1 to 75. Each of Raid Bingo cards has a different group of numbers thereon, and one of said cards appears substantially as follows: Complaint 36F. T. C.

Nos. 1 to 15 Nos. 16 to 30 Nos. 31 to 45 Nos. 46 to 60 Nos. 61 to 75 D I N G 0 1 16 33 46 66 6 27 35 55 61 Free 5 23 0 58 68 Free 13 21 37 53 67 2 20 43 56 63 ------ START WITH LETTER 0 IN CENTER, FREE 6 NUMBERS ACI\OSS ANY LINE WINS 2 12 DH'FERENT WAYS TO B!NCO Dy means of said Dingo set, said merchandise is distributed to tho purchasing public in substantially the following manner: Respond· ent's customer, or someone desih.,.nated by such customer, acts as an operator in the sale or distribution of said merchandise. The oper· ntor of the Dingo set places in the hands of each participant one of the said Dingo cards, and reach participant pays the operator a designated sum of money for the privilege of participating in the uistribution of each of said articles of merchandise. The operator then places the said woo(lf'n squares in a containrr and so mixes them that the numbl'rs thereon are concealed until one of said woo(lcn squares is withdr·nwn from the containrr by the operator. In the C<'ntf'r of the participant's Bingo card is a square marked "FREE" and each participant places a marker thereon before the aforesaid drawing of saill numbrrs is brgun. The operator then proceeds with the dmwing of numbers from the aforesaid mixing container nnd calls out the number appearing on each wootlC'n square u:, said square is witiHlrawn from F~id container and the person on whose card such number appears places one of said markf'rs over such number. This s~me procedure is followed until one of the participants hns succeelled in marking fh•e numbers on said card, which numb<'rs form a straight line across the card, either horizontally, vertically, or diagonally· The sequcmco or distribution of the numbers which control tho plac· WISCO~&IN PELUXE' POLL & DRESS CO., ETC. 253 250 Complaint ing of the markers is determined wholly by chanM. Upon marking the last of said five numbers the participant calls out the word "Bingo." The marked numbers are called out by the operator who checks the same with the numbers on said tally sheet, and if such numbers have been correctly marked the participant is entitled to and receives one of said articles of merchandise as a prize. The other participants receive nothi1.g for their money. This same procedure is repeated until all of said articles of merchandise or prizes have been distributed. The articles of merchandise therein vary but each of said articles of merchandise is of greater value than the amount paid by each participant for participation in the distribution of said merchandise as above described. The said articles of merchandise are thus distributed to the purchasing public wholly by lot or chance. Respondent has sold and distributed varous Bingo sets and other devices for use in the sale and distribution of its merchandise to the consuming pubiic by lot or chanr;e, but the principle of operation in connection with each of said Bingo sets or devices is similar to the one hereinabove described, varying only in detail. PAn. 3. The persons who have purchased respondent's said assort~ ments of merchandise, together with said Bingo sets, either directly or indirectly, have used said llingo sets in selling and distributing respondent's merchandise ;n accoruance with the aforesaid sales plan or method. Respondent thus supplies to anu places in the hands of others, the means of condu~ting lotteries in the sale of its merchan. disc in accoruanco with the sales plan or methou hereinabove described. The use by respondent of said sales plan or methou in the sale and uistribution of its merchandise and the sale of said merchan· disc by anu through the use thereof, and by the aid of said sales plan or method is a practice of a sort which is contrary to an established public policy of the Government of the United States. PAn. 4. The sale of merchanuise to the purchasing public in tho manner above alleged, involves n game of chance or the sale of n. chance to procure nn article of merchandise at a price much less than tho normal retail price tller£>of. l\Iany persons, firms, and corpora. tions who sell or uistribute merchanuise in competition with tho respomlent, ns above alleged, do not use said sales plan or method or any sales plan or method involving a game of chance or the sale of a chanc•e to win something by chance or any other sales plan or metho<l that is co11trary to public policy. Many persons are nttractcu by said sales plan or method employed by respondent in tho sale and distribution of its merchandise, and by the element of chance involved therein, and have been and are induced to buy and sell respondent's 254 FE·DE'RAIL TRADE' COl\IMISSION DECISIONS Findings 36 F. T. C. merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use the same or equivalent sales plans or methods. The use of said sales plan or method by respondent because of said game of chance has the tendency and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from its said competitors who do not use the same or equivalent sales :Plans or methods.

PAR. 5. The aforesaid acts and practices of respondent, as hereinabove alleged, are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of competition in commerce and unfair acts and practices in commerce within the intent and meaning of the Fe<leral Trade Commission Act. HEronT, FINDINGS AS TO THE FACTs, AND Onder Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on September 2, 19-!2, issued and thereafter !'ierved its complaint in this preceding upon respondent, 1Visconsin Deluxe Doll & Dress Co., a corporation, also trading as 1Visconsin Deluxe Corporation, charging it with the use of unfair methods of competition nnd unfair nets or practices in commerce in violation of the provisions of said net. ·After the issuance of said complaint and the filing of respondent's answer, the Commission by order entered herein granted respondent's motion for permission to withdraw said answer ancl to substitute therefor an answer aclmitting all tho material all<.'gations of fact set forth in said complaint nnd waiving all intervening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Commission. Thereafter, this proc<>cding r ularly came on for final }waring bf.'forc the Commission on the said complaint and substitute answer, and the Commission, having duly considerccl the matter ancl being now fully aclvised in the pr<>mises, finds that this procecdin~ is in the intf.'rest of the public and makes this its findings as to the facts and its conclusion clrawn therefrom. FI~DINGS AS TO Tile FACTS Paint-\GRAPJI 1. nc~pondent, 1Visconsin Deluxe Doll & Dri'SS Co., is n corporation, trading~ as Wisconsin Deluxe Corporation, with its principal office ancl place of busine~s located at 1!>02 North Third Street, Milwaukee, 1Vis. Respondent is now, ancl has be<'n for some time last past, engaged in the sale ancl distribution of blankets, clocks, WISCOXSIN DELUXE Doll & DRESS CO., ET.C. 255 250 Findings tableware, kitchenware, luggage, fishing tackle, lamps, electric fixtures, and numerous household articles ami other articles of merchandise in commerce between and among the various States of the United States and in the District of Columbia. Respondent causes and has caused said merchandise, when sold, to be transported from its aforesaid place of business in Milwaukee, 'Vis., to purchasers thereof at their respective points of location in the various States of the United States other than the State of 'Visconsin, and in the District of Columbia. There is now and has be<>n for some time last past a course of trade by respondent in said merchandise in commerce between and among the various States of the United States and in the District of Columbia.

In the course nnd conduct of said business, respondent is, and has been, in competition with other corporations and with individuals and firms engaged in the sale and distribution of like or similar articles of merchandise in comme.rce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of said business as described in paragraph 1 hereof, respondent, in selling and distributing its said merchandise, has supplied its customers with assortments of said merchandise, togdher with certain paraphernalia known as Dingo sets, by means of which said merchandise is sold and distributed to the purchasing or consuming public in a manner which involves the operation of a game of chance, gift enterprise, or lottery scheme. One of said Dingo sets consists of a large master card or tally sheet containing 75 numbers, a number of smaller Dingo cards on each of which appears 24 numbers arranged in a square, which numbers corrcf-:pond to the numbers on the tally sheet, and a number of small wooden squares on each of which appears one of the numbers from 1 to 75. Each of said ningo cards has a different group of numbers thereon, and one of said cards appears substantially as follows: • Findings 361!'. T. C. Nos. 1 to 15 Nos. 16 to 30 Nos. 31 to 45 Nos. 46 to 60 Nos. 61 to 75 B I N G 0 1 16 33 46 66 6 27 35 55 61 Free 5 23 0 58 68 Free 13 21 37 53 67 . 2 20 43 56 63 START WITH LETTER 0 IN C]i:NTER, FREE ~ NUMBERS ACROSS ANY LINE WINS 2 12 DIFFERENT WAYS TO BINGO Dy means of said Dingo set, said merchandise is distributed to the purchasing public in substantially the following manner: Respond~ ent's customer, or someone designated by such customer, acts as an operator in the sale or distribution of said merchandise. The opera~ tor of the Dingo set places in the hands of each participant one of said Dingo cards, and each participant pays the operator a desig~ nated sum of money for the privilege of participating in the distri~ bution of each of said articles of merchandise. The operator then places the said wooden squares in a container, and so mixes them that the numbers thereon are concealed until one of said wooden squares is withdrawn from the container by the operator. In the center of the participant's Dingo card is a square marked "FREE" and each participant places a marker thereon before the aforesaid drawing of said numbers is begun. The operator then proceeds with the drawing of number from the aforesaid mixing container and calls out the number appearing on each wooden square as said square is withdrawn from !'laid container, and the person on whose card such number appears places one of said markers over such number. This same procedure is followed until one of. the partici~ pants has succeeded in marking five numbers on said card, which numbers form a b'traight line across the card, either horizontally, vertically, or diagonally. The sequence or distribution of the num~ • WISCONSffN DELUXE) DOLL & DHE'SS 00., Eric. 257 250 Findings hers which control the placing of the markers is determined wholly by chance. Upon marking the last of said five numbers, the participant calls out the word "Bingo." The marked numbers are called out by the operator, who checks the same with the numbers on said tally sheet, and if such numbers have been correctly marked, the participant is entitled to and receives one of said articles of merchandise as a prize. The other participants receive nothing for their money. This same procedure is repeated until all of said articles of merchandise or prizes have been distributed. The articles of merchandise therein :vary, but each of said articles of merchandise is of greater value than the amount paid by each participant for participation in the distribution of said merchandise as· above described. The said articles of merchandise are thus distributed to the purchasing public wholly by lot or chance.

Respondent has sold and distributed various Dingo sets and other devices for use in the sale and distribution of its merchandise to the consuming public by lot or chance, but the principle of operation in ' connecti'<:m with each of said Bingo sets or devices is similar to the one hereinabove described, varying only in detail. PAR. 3. The persons who have purchased respondent's said assortments of merchandise, together with said Dingo sets, either directly or indirectly, have used said Dingo sets in selling and distributing respondent's merchandise in accordance with the aforesaid sales plan br method. Uespondent thus supplies to and places in the hands of others the means of conducting lotteries in the sale of its merchandise, in accordance with the sales plan or method hereinabove described. The use by respondent of said sales plan or method in the sale and distribution of its merchandise, and the sale of said merchandise by and through the use thereof, and by the aid of said sales plan or method is a practice which is contrary to an established public policy of the Government of the United States. PAR. 4. The sale of merchandise to the purchasing public, in the manner above found, involves a game of chance or the sale of a chance to procure an article of merchllndise at a price much less than the normal retail price thereof. Many persons, firms, and corporations who sell or distribute merchandise in competition with the respo.ndcnt, as above found, do not use said sales plan or method or any 'sales plan or method involving a game of chance or the sale of a chance to win something by chance or any other sales plan or method that is contrary to public policy. l\Iany persons are attracted by said sales plan or method employed by respondent in the sale and distribution of its merchandise, and by the element of Order 36F. T. C.

chance involved therein, and have been and are induced to buy and sell respondent's merchandise in preference to merchandise offered for sale and sold by said competitors of respondent who do not use the same or equivalent sales plans or methods. The use of said sales plan or method by respondent because of said game of chance has the tendency and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from its said competitors who do not use the same or equivalent sales plans or methods. CONCLUSION The aforesaid acts and practices of respondent as hereinabove found are all to the prejudice and injury of the public and of respondent's competitors, and constitute unfair methods of cempetition in commerce and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE .AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answe·r of respondent, in which answer respondent admits all the material allegations of fact set forth in said complaint and states that it waives all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondent has violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondent, 'Visconsin Deluxe Doll & Dress Co., its officers, representatives, agents, and employees, directly, or through any corporate or other device, in connection with the offering for sale, sale, and distribution of novelty or other merchandise in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Selling or distributing blankets, clocks, lamps, kitchenware, fishing tackle, household goods, or any other merchandise, accompanied by a Dingo set or any similar device to be used, or which may be used, by the purchaser of said merchandise, or others, as a means of disposing of said merchandise by means of a game of chance,· gift enterprise or lottery scheme.

2. Supplying to or placing in the hands of others, Dingo sets or similar devices, either with assortments of blankets, clocks, lamps, kitchenware, fishing tackle, household goods, or any other merchan- WISCONSIN DELUXE DOLL & DRESS CO., E.'fic, 259 250 Order dise, or separately, which said Bingo sets or similar devices are to be used or may be used in selling or distributing said merchandise to the public.

3. Selling or otherwise disposing of any merchandise by means of a game of chance, gift enterprise or lottery scheme. It is further 01"dered, That respondent shall within 60 days after service upon it of this order file with the Commission a report in writing, setting forth in detaif the manner and form in which it has ~complied with this order.

260 FEDERAL TRADE C01llv.USSION DECISIONS Syllabus 3GF.T.C.