Would this be legal? I dont think it would be a pyramid scheme?
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Would this be legal? I dont think it would be a pyramid scheme?
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Say me and 9 other people were gonna put one thousand dollars each into a pool. So that would make 10 thousand dollars into the pool. We put numbers into a hat and each person draws one number from the hat. Whoever has number 1 gets the first 10 thousand dollars. Number 2 gets the next 10 thousand dollars. All the way to the last guy at number 10. Of course each time all the people would have to put a thousand dollars into the pool until the tenth person collects. I was just wondering if its legal.
Additional Details
The idea isnt to "win" money. Everybody would get what they put in. The only thing that you could consider a win is when you receive the money. Obviously, number 1 is in the best situation since he receives the money first. However, he still has to continue paying one thousand dollars 9 more times until the 10th person collects his 10 thousand.
The only gamble would be when you collect your lump sum. Of course the greatest difficulty would be making sure the people who already received their money continue putting into the pool.
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Charis P
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The common term for this is a rotating credit association and it is legal in most jurisdictions of the United States. It has been used openly for generations by many immigrant groups to provide each participant startup capital for his or her business ventures (although each participant is free to use it as he or she sees fit when received). In Korean American communities it is know as "kye" and is a major source of startup capital for Korean Americans to open up the many "mom and pop" shops that one finds accross the United States. |
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Judy
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No, it isn't a pyramid scheme. And not likely illegal - but I'd hate to be person #10, hoping everyone else would be nice enough to stay in until I could collect. Why would they? |
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Stephanie C
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Where would the $10,000 for persons #2-#10 come from? There would only be enough money in the hat for person #1. But it sounds like a lottery which is, indeed, illegal, unless you have a gambling license.
Ok, now I get it a little better... except I don't see why anyone would do this. You put in $10,000 ($1,000 for each time someone draws, so $1,000 x 10), and get $10,000 out of it - no gain. I suppose it's legal... I just am not sure why anyone would do it. |
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Stuart H
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UUH each person has put in Ten thousand dollars to win Ten thousand dollars. Why don't they just hold on to the money that they will eventually win? |
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Shane
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What are you talking about? This is a pyramid. |
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No Spam
Adult 
Gambling
Unfinished
Deception
Plagiarism
Not English
